Yes, Kalshi is legal in Texas. The platform is a federally regulated exchange designated as a contract market by the Commodity Futures Trading Commission, which puts it in the same category as venues that trade oil futures or agricultural commodities and outside the reach of Texas gambling statutes. Any Texas resident who is at least 18 can open an account, deposit money through standard banking channels, and trade event contracts on economics, elections, sports, and more.
Why Texas Gambling Law Doesn’t Reach Kalshi
Texas does prohibit most betting. Section 47.02 of the Penal Code makes it a Class C misdemeanor to bet on the outcome of a game, contest, or political election, and defines a “bet” broadly as an agreement to win or lose something of value based partly or entirely on chance.1Texas State Law Library. Gambling2Texas Legislature. Texas Penal Code Chapter 47 – Gambling
Kalshi operates on different legal footing. The CFTC granted it Designated Contract Market status in November 2020 under Section 5 of the Commodity Exchange Act.3Commodity Futures Trading Commission. CFTC Designates KalshiEX LLC as a Contract Market Federal courts have increasingly held that when event contracts qualify as “swaps” under the Commodity Exchange Act, the federal regime supersedes state gambling enforcement. The Third Circuit said so directly in KalshiEX LLC v. Flaherty in April 2026.4U.S. Court of Appeals for the D.C. Circuit. KalshiEX LLC v. CFTC – Decision
Not every federal court agrees. Judges in Nevada, Ohio, Maryland, and Massachusetts have split on whether specific contracts qualify as swaps and whether preemption applies. None of that affects Texas, where no state authority has moved to restrict access. Kalshi reports availability in all 50 states.
Federal registration also brings a practical safeguard worth knowing about. Customer money on a designated contract market has to be held separately from the exchange’s own capital, and if the exchange or the intermediary holding your funds becomes insolvent, segregated customer money gets a bankruptcy preference ahead of general creditors.5Commodity Futures Trading Commission. Futures Commission Merchants – Segregation of Funds Offshore prediction sites don’t offer that.
What You Can Trade From Texas
Every contract on the platform is a yes-or-no proposition on a specific outcome. You buy a Yes or No position at a price between 0 and 100 cents that reflects the market’s current probability estimate, and if your side is right at resolution, the contract pays out. The categories available to Texas users include:6Kalshi. Kalshi – Prediction Market for Trading the Future
- Economics: inflation prints, Federal Reserve rate decisions, employment data.
- Finance: AI developments, IPOs, company performance metrics.
- Politics: congressional actions and international political developments.
- Elections: primaries, Senate, governor, and U.S. House races.
- Sports: professional basketball, hockey, soccer, and other events.
- Culture: entertainment, reality shows, awards.
Two categories deserve a specific note. Election contracts went live after a 2024 federal court ruling that elections are not “games” under the CFTC’s gaming prohibition, and they remain available through the 2026 cycle.4U.S. Court of Appeals for the D.C. Circuit. KalshiEX LLC v. CFTC – Decision Sports contracts, launched in early 2025, are more legally contested; several states with their own sports betting frameworks have challenged them, and the Ninth Circuit heard arguments in April 2026 that could eventually push the issue to the Supreme Court. Texas is not one of the challenging states, and sports contracts are available here.
Opening and Funding an Account
You need to be at least 18 and a U.S. resident.7Kalshi Help Center. Signing Up as an Individual Before you can deposit or trade, Kalshi runs a Know Your Customer check to verify your identity.8U.S. Commodity Futures Trading Commission. KalshiEX LLC – Immediate Account Funding
Once you’re verified, funding options include ACH bank transfer, debit card (including Apple Pay and Google Pay), PayPal, Venmo, Cash App (deposits only), cryptocurrency, and wire transfer. Wire transfers require a $1,000 minimum; most other methods start at $10. Kalshi doesn’t charge a deposit fee, though your bank may charge for a wire. Withdrawals cost $2.9Kalshi Help Center. Transfers FAQ10U.S. Commodity Futures Trading Commission. Kalshi Fee Schedule Deposited funds carry a temporary hold before they can be withdrawn, with the length depending on how you funded.
Trading fees apply only when your order is immediately matched with an existing order on the book. Resting orders that wait to be filled are free. The fee is calculated as a percentage of expected earnings rather than a flat per-contract charge, so you’ll pay less on contracts trading near 0 or 100 cents and more on contracts near 50. There are no membership, settlement, or processing fees.10U.S. Commodity Futures Trading Commission. Kalshi Fee Schedule
Taxes for Texas Traders
Texas has no state income tax, so your Kalshi profits create no state tax bill. Federal tax treatment is less settled. The IRS has not issued specific guidance on event contracts from prediction markets, and three different treatments are plausible:
- Section 1256 contracts. If event contracts qualify as regulated futures contracts, gains and losses are marked to market at year-end and taxed at a blended 60% long-term, 40% short-term capital gains rate regardless of holding period. This is the most favorable treatment for most traders.11Internal Revenue Service. Form 6781 – Gains and Losses From Section 1256 Contracts and Straddles
- Capital assets. Selling a contract on the exchange could produce capital gains, while holding to settlement could produce ordinary income.
- Gambling winnings. If the IRS treats them as gambling, winnings are ordinary income and losses can only offset gambling gains.
Kalshi does not issue a Form 1099-B for event contract activity. You may receive a 1099-INT for interest on your balance or a 1099-MISC for promotional credits, but reporting the trading itself is on you. The platform provides profit-and-loss information to help with the math; it does not decide the tax character.
Until the IRS speaks, keep detailed records of every trade: purchase price, sale price or settlement amount, and dates. Whether you end up filing on Form 6781, on Schedule D as capital gains, or as gambling income on Schedule 1, you’ll want documentation that backs the position you take.