Coming into 2025, lawmakers were confronted with a growing scandal at the Texas Lottery.
Amid state and federal investigations into a series of illegal schemes, lawmakers dismantled the Texas Lottery Commission and transferred oversight of the games to the Texas Department of Licensing and Regulation.
While that very public scandal captured headlines, quietly, a tribe in East Texas received approval to build an off-reservation casino, and illegal online sports betting has proliferated.
Lottery
As previously reported, lawmakers came close to abolishing the Texas Lottery this year after controversy and investigations into two major jackpots came to light. Accusations of money laundering and illegal online ticket sales led to leadership resignations and heavy scrutiny from Lt. Gov. Dan Patrick and lawmakers.
In a compromise, the Texas Lottery Commission was closed, but the lottery itself was saved; supervision of the lottery was transferred to the Texas Department of Licensing and Regulation, which appointed staff and an auditor from the commission in September.
In a Texas Lottery press release in October, it was disclosed that “year-over-year declines across both scratch ticket and draw game categories” were seen, yet there was still a “steady demand for popular games.”
Casinos
In September, the Alabama-Coushatta Tribe announced that it is building a new Class II casino resort on land owned by the tribe but not located on its reservation near Leggett, Texas.
Changes enacted during the Biden administration paved the way for this expansion and opened the door to more widespread and unchecked proliferation.
Pro-gambling interests continue to pour money into Texas, but a special election for a state Senate seat in North Texas saw the casino-backed candidate fall short.
This follows a legislative session in which legislation to legalize casinos saw a regression from 2023. Gov. Greg Abbott also recently said he is “not there yet” on casino legalization, citing concerns over addiction and recent sports-betting scandals involving athletes during an interview with CBS 11 News.
Prediction Markets
However, online gambling, rebranded as “prediction markets,” has proliferated.
The internet platform Kalshi is providing an avenue for Texans to participate in online sports betting by allowing individuals to purchase event contracts, presented as binary options, to wager on their prediction of the outcome of an event. The winning prediction receives a payout upon the expiration date.
While other states have taken Kalshi to court, Texas still has not.
The proliferation of gambling in Texas and throughout the U.S. is an issue that is sure to endure, one that is causing economic hardship and leading to corruption, stories Texas Scorecard will be covering in 2026 and beyond.
If you have information about gambling in Texas, partner with us to ensure transparency. Email our tipline at scorecardtips@protonmail.com.
