All Bets Are Off? Where Texas Gambling Law Stands in 2026

Five years ago this blog took up sports betting, daily fantasy sports, casinos, eight-liners, and poker clubs, each time ending with some version of “until voters amend the Constitution, this operates on precarious footing.” Three legislative sessions later, voters still haven’t been asked. But the courts, the Lieutenant Governor, a few city councils, and a federal commodities regulator have all been busy. Here is the scorecard.

1. The baseline hasn’t moved

Article III, section 47 of the Texas Constitution still commands the Legislature to prohibit “lotteries and gift enterprises,” with carve-outs only for charitable bingo, charitable raffles, and the state lottery. Pari-mutuel wagering rides on a 1987 statewide referendum. Everything else runs through Chapter 47 of the Penal Code, which has not been amended in any meaningful way since our earlier posts.

The calendar matters as much as the text. The Legislature meets in odd-numbered years, and a constitutional amendment needs two-thirds of each chamber before it reaches the ballot. Nothing filed in 2027 could go before voters until November 2027 at the earliest. Every “will Texas legalize X” question therefore has the same first answer: not before then.

2. Sports betting and casinos: 2023 was the high-water mark

In May 2023, the House did something it had never done: it passed a sports-betting amendment. HJR 102 (Rep. Jeff Leach, R-Plano), authorizing online wagering, cleared the House with 101 votes. A companion casino amendment, HJR 155 (Rep. Charlie Geren, R-Fort Worth), drew 92 votes on second reading but never reached final passage. Neither got a Senate hearing. Lt. Gov. Dan Patrick said the Republican votes weren’t there in his chamber, and that was that.

The 2025 session went backward. Sports betting (HJR 134) and casino (HJR 137) amendments were filed, but on March 12, 2025, fifteen House Republicans, twelve of them freshmen, sent the State Affairs chair a letter saying the votes no longer existed. Neither resolution was heard. Las Vegas Sands, which has spent heavily in Texas since the Adelson family bought the Mavericks, watched Irving strip “gaming” out of the rezoning for the old Texas Stadium site. Patrick’s December 2025 summary: “I am simply not there yet.”

Where that leaves us: Sportsbooks and casinos remain illegal in Texas. The earliest path is a 2027 resolution, a two-thirds vote in both chambers, and a November 2027 election. The House has shown it can get there; the Senate has not.

3. The new wrinkle: prediction markets

While the Legislature stalled, sports betting arrived anyway, under a different name. Kalshi, Polymarket, and similar platforms let Texans buy “event contracts” on who wins Sunday’s game. They call it trading swaps under federal commodities law; the Commodity Futures Trading Commission agrees, and has sued several states that tried to treat the contracts as gambling. The federal circuits are split. The Third Circuit held in April 2026 that the Commodity Exchange Act preempts state gambling law for sports event contracts traded on a CFTC-registered exchange; the Ninth Circuit held the opposite on August 28, 2026; and the Fourth and Sixth Circuits have cases pending. None of them is the Fifth Circuit, so Texas has no controlling answer.

Texas is beginning to react. On March 27, 2026, Patrick charged the Senate State Affairs Committee with studying how federal “loopholes” are being used to circumvent Texas gambling law and recommending fixes for 2027. The committee heard from Kalshi and the casino industry on September 15, 2026. Attorney General Paxton’s office, notably, has not joined the multistate briefs challenging the CFTC’s claim of exclusive authority.

Where that leaves us: Expect 2027 bills aimed at event contracts. Whether Texas can enforce them is a federal-preemption question that will likely end at the U.S. Supreme Court.

4. Eight-liners: Rylie stands, and “skill” is the new fuzzy animal

Eight-liners are slot-style machines that pay out in prizes rather than cash. Their operators have long relied on the “fuzzy-animal exception,” a 1995 amendment to Penal Code § 47.01 written for carnival-style games that award a stuffed animal or other noncash prize worth no more than $5 (or ten times the cost of a play, whichever is less). The Legislature meant to protect claw machines; the eight-liner industry read it to cover them too.

When we last wrote, the Fort Worth Court of Appeals had held that eight-liners are lotteries (chance, consideration, prize) that no statute can authorize, and the operators had petitioned the Texas Supreme Court. In December 2023 the Court denied review, and in June 2024 it denied rehearing. City of Fort Worth v. Rylie is final. The fuzzy-animal exception is still on the books, but under Rylie it cannot rescue a machine that meets the constitutional definition of a lottery. Fort Worth followed up with an outright ban on game rooms, adopted in October 2024 and effective January 21, 2025, backed by fines of up to $2,000 per machine per day.

The industry’s response has been to swap chance for skill. In State v. 5 Gambling Machines (Tex. App.—Texarkana Apr. 30, 2025), the Sixth Court affirmed an order returning seized “Lonestar Skill” machines after the trial court found that a skilled player could win every time, so chance played no role in whether a prize was awarded. That is a fact finding, not a rule, but it gives operators a template and gives prosecutors a harder case.

The Legislature tried and failed to close the gap. SB 517 (Sen. Mayes Middleton) would have swept gift cards and vouchers into the definition of “thing of value” and raised penalties; it passed the Senate in May 2025 and died in the House. Counties still regulate game rooms under Local Government Code Chapter 234 (permits, hours, distance rules) and, as before, none of that makes a machine legal that the Penal Code says is not.

Where that leaves us: Chance-based eight-liners are unconstitutional lotteries anywhere Rylie is followed, and cities may ban them outright. Skill-based machines are litigable, county by county.

5. Poker clubs: Texas Card House wins, narrowly

The Dallas fight over Texas Card House has run its course. The city issued the club a certificate of occupancy in 2020, then revoked it in early 2022 after deciding that a membership-fee poker room violates Chapter 47. The club appealed to the city’s Board of Adjustment, which reinstated the certificate. The city’s building official then sued his own board. A Dallas County district judge sided with the city in November 2022. The Dallas Court of Appeals reversed on August 27, 2024, holding that the judge had to defer to the Board: if reasonable minds could reach the Board’s conclusion, the court could not substitute its own. On September 5, 2025, the Texas Supreme Court declined to review. The club is open.

Read the holding carefully. No court has said the membership-fee model is legal under Chapter 47. What the courts said is that a zoning board’s decision that the club complied with the law was not an abuse of discretion. The three-part defense in § 47.02 (private place, no economic benefit other than personal winnings, equal odds) is unchanged, and § 47.03 (participating in the earnings of a gambling place) still has no defense at all. Dallas, for its part, is now writing poker rooms into its code as a specific-use permit rather than fighting them in court.

Where that leaves us: A club with a permit and a friendly zoning board is on firmer ground than in 2022. A club in a county with a hostile district attorney is exactly where it was.

6. Daily fantasy sports: the gray area that never closed

Attorney General Paxton’s 2016 opinion that paid daily fantasy contests are illegal bets is still the only official word, and the lawsuit meant to test it is over without a test. DraftKings sued for a declaration that its contests are legal, first in Dallas County in 2016 and again in Travis County in 2018, with FanDuel intervening. For eight years the parties did nothing but agree to extend the scheduling order. On July 30, 2026, DraftKings and FanDuel nonsuited without prejudice, and the court signed the dismissal orders on August 5, 2026. No court has ever ruled. The State never enforced its opinion, and the operators never risked an adverse decision. DraftKings, FanDuel, PrizePicks, and Underdog all take Texas customers today. No bill has moved since HB 393 died in 2021.

Where that leaves us: A decade-old opinion nobody enforces, no case on file, and an industry operating in the open. The nonsuit is “without prejudice,” so either side could start again, but nothing suggests anyone wants to.

7. The lottery got a new landlord

The one gambling bill that did pass in 2025 was a crackdown. After a single syndicate bought roughly 99% of the possible combinations to claim a $95 million Lotto Texas jackpot, and after “courier” apps let people buy tickets by phone, the Legislature passed SB 3070. Effective September 1, 2025, the Texas Lottery Commission is gone; the Department of Licensing and Regulation runs the lottery, online and courier sales are a Class A misdemeanor, in-person purchases are capped at 100 tickets per transaction, and the whole program sunsets in 2029 unless renewed.

8. Tribal gaming: settled in the tribes’ favor

Our 2022 casino post noted that the State was litigating to shut down the Tigua and Alabama-Coushatta gaming halls. That ended on June 15, 2022, when the U.S. Supreme Court held 5–4 in Ysleta del Sur Pueblo v. Texas that the Restoration Act lets Texas bar only gaming it prohibits outright, not gaming, like bingo, that it merely regulates. Speaking Rock in El Paso and Naskila in Livingston are secure.

The bottom line

• Nothing legal today becomes illegal, and nothing illegal becomes legal, before the 2027 session.
• Chance-based eight-liners are unconstitutional lotteries. Skill machines are the next fight.
• Poker clubs won a zoning case, not a gambling case. Local enforcement still decides.
• Sports betting and casinos need the Senate, and the Senate needs Dan Patrick.
• Prediction markets are the story to watch: sports betting in all but name, and the State is only now deciding whether it can do anything about it.

If you operate in any of these spaces, or regulate them, plan on precarious footing, with the ground now shifting locally rather than in Austin.

Bill Cobb is a founding partner of Cobb & Gervasi PLLC and the former Deputy Attorney General for Civil Litigation at the Texas Office of the Attorney General.