The Texas Senate Committee on State Affairs held a hearing on September 15, 2026, that could signal a willingness to ban Texas sweepstakes casinos. The committee called four expert witnesses to testify on gambling loopholes in the Lone Star State’s constitution and whether new laws should be enacted.
The interim hearing is part of a study that Texas Lt. Governor Dan Patrick ordered to evaluate loopholes in several gambling-related niches. The Committee on State Affairs’ hearing outlined specific points about alternative digital gaming models, including sports betting and prediction markets.
Robert DeNault, an executive and legal counsel representing the prediction market industry, argues that his industry provides a federally regulated financial product. He cited oversight by the Commodity Futures Trading Commission (CFTC) as evidence he does not represent a gambling platform.
DeNault added that his niche does not involve “betting against the house,” but instead involves peer-to-peer risk management involving contracts. He described outright bans on the gambling industry are proven to be ineffective. The “combative route,” as he called it, drives unregulated gambling to offshore platforms.
Tres York, the VP of Government Relations for the American Gaming Association (AGA), also testified before the committee. He claimed that DeNault’s industry represented sports betting by another name.
He also pointed out that young adults between 18 and 21 traded over $5.4 billion on the leading platform last year. York said that poses a severe risk to those involved.
Brianna Doura-Schawohl, a gambling policy lobbyist, also testified. She raised alarms about what she described as skyrocketing youth gambling addiction.
The lobbyist stated that, to the end-user, the activity feels like gambling. She added, “The brain doesn’t care whether you call it a DCM or a sportsbook.”
It is gambling by another name, in the policy expert’s opinion.
The committee also called Dr. Lindy McGee, a Houston-based pediatrician who spoke to the need to protect “youth minds” from online gaming platforms.
Dr. McGee expressed disappointment that the sites involved had refused to raise their minimum age for participation from 18 to 21.
The hearing might not seem to involve the sweepstakes casino industry, but one part of Lt. Governor Patrick’s working orders is important. Patrick’s directive to the committee called for it to close “gambling loopholes,” which is a much broader mandate than Robert DeNault’s industry.
State Senator Bob Hall took a broad stance on the issue, saying, “Our job is to protect the consumer…It’s an evil business that hurts people, and that’s what we’re here for.”
Likening regulation to giving someone drugs to ease the pain of having their throat cut, Hall added, “Our job is to protect individual rights, to protect the people from predators, and the gambling industry across the board is a predator.”
Robert DeNault countered Hall’s arguments with a call for practical solutions. Pointing out that bans have failed to stop activity in the past, he said:
“You can try to ban, you know whether it’s cryptocurrency, whether it’s perpetual futures, you can try to ban all these things, but users are going offshore and using them in a much less safe way.”
Texas will not address the issue until the new legislative session begins in January 2027. Because Texas’s legislature meets only in odd-numbered years, this will be the last time it addresses the issue until 2029.
