Emma Ruby, Adobe Stock, Nathan Hunsinger
Audio By Carbonatix
Want to have a little extra fun during this year’s Super Bowl? If the fun of watching the commercials has been spoiled for you by how all of them get released before the big game, you might be one of the millions who want to put a few bucks down on how long the singing of the National Anthem might last, or the result of the pre-game coin toss.
That type of sports gambling is old news, though. Funky prop bets have been around for some time now. People want more! People want something different! What are the odds of that?
The odds are pretty good, we say. A quick Google search reveals that anyone, including Texans, can legally place a bet (of sorts) on the hottest matchup that Texans will be talking about for the next few months. We aren’t talking about the Super Bowl, but about the current race between U.S. Congresswoman Jasmine Crockett and state Rep. James Talarico. The two social media darlings are battling for the Democratic nomination to run for the U.S. Senate later this year.
You don’t have to go incognito or utilize a VPN or something shady to put your money down on this contest in Texas. You just need to visit a prediction market platform.
During the annual Golden Globe Awards on Sunday night, the disembodied announcer voices kept yammering on about how Polymarket users were betting on certain awards. The production gimmick, along with a few others, wasn’t popular with viewers, who took to social media to voice their displeasure. However, Polymarket’s presence on such a mainstream television production, with an audience of millions, says a lot about where society stands when it comes to gambling.
Polymarket is a prediction market platform, just like other leaders in the space, such as Kalshi and Fanatics Markets. Like daily fantasy sports, prediction markets have been able to circumvent the legal issues that traditional online sports betting remains entangled in, particularly in the 22 states where sports gambling is still illegal.
The key difference between putting money down on a prediction market app and illegal sports betting is that the user isn’t betting “against the house,” but taking advantage of the prediction market’s “peer-to-peer” trading element, where the platform acts as a broker who takes a transaction fee as opposed to generating revenue from user losses.
It’s not surprising that prediction market platforms have decided to focus their marketing efforts on states like Texas.
“Consumers by nature don’t want to break the law,” Fanatics Markets Vice President of Industry Communications, Kevin Hennessy, said in an email to the Observer. “Therefore, if there are other options made available in a regulated market, such as the ability to trade futures with prediction markets, we believe consumers will turn to this option as opposed to taking risks with illegal activity.”
On Tuesday morning, both the Kalshi and Polymarket platforms listed Talarico as the betting favorite over Crockett, despite recent polling suggesting the opposite. Both markets show the Round Rock Democrat at a 64% “yes” to win the nomination. On the other hand, Crockett is sporting a 35% “yes” on Kalshi and only 34% on Polymarket.
The Kalshi payout for a Talrico win was higher than what Polymarket was paying out at that time, at least. A user who trades $100 for a Talarico win now stands to receive a $157 payout, where spending the same amount on Polymarket will yield only a $149.44 windfall. Fanatics Markets doesn’t offer the chance to put money down on this specific primary race, but does offer users a chance to trade on whether the Republican or Democratic candidate will win the Senate election in November.
So far, Texas officials have been quiet on the topic of prediction markets, something they most definitely were not a decade ago when the state tried to outlaw daily fantasy sports platforms. We reached out to the Texas Attorney General’s office to ask a few questions about the state’s stance on prediction markets, but did not receive a response.
So far, more than a dozen states, including California and New York, have issued cease-and-desist orders, filed lawsuits, or taken some sort of action against prediction market sites. Polymarket made dubious news this month when a user turned a $32,000 trade into $400,000 following the surprise capture of Venezuelan leader Nicolas Maduro, something observers have said “reeked of insider trading,” according to CBS News.
Given how gambling-averse the Texas government has long been, even as powerful casino and resort owners like Dallas Mavericks owner Miriam Adelson have pumped millions of dollars into Republican campaign coffers, it is a bit surprising that Paxton and Gov. Greg Abbott have been relatively quiet on the matter thus far.
Hennessy of Fanatics Markets, understandably, thinks platforms like his can help push the conversation around gambling into a bolder direction than it has been headed in the past.
“The expansion of prediction markets in Texas will certainly help to advance the policy conversations surrounding sports wagering in the state,” he said. “State lawmakers understand that there is a tremendous amount of uncaptured state tax revenue from sports wagering. By simply allowing a voter referendum authorizing sports wagering to be placed before the state citizenry, lawmakers have the ability to potentially capture new revenue, while also providing citizens with a choice.”
