Efforts to legalize sports betting in California and Texas have been largely stalled in 2025, but there are some signs that momentum could build up in 2026 as the industry rapidly matures.
Texas saw strong initial efforts to legalize sports betting in 2025, notably with the filing of House Joint Resolution 134. Governor Abbott, industry advocates, and Texas professional sports teams expressed support, but Senate opposition eventually blocked the effort. Still, over 60% of Texans say they support sports betting, and major sports leagues have formed the Texas Sports Betting Alliance to press the issue. State Representative Vikki Goodwin, who is running for lieutenant governor of Texas, said she would like to see a measure to legalize casinos and sports gambling put to the voters as soon as possible.
Another interesting twist is that Las Vegas Sands (LVS) majority shareholder Miriam Adelson, who owns the Dallas Mavericks, is a strong supporter of legalizing casinos and sports betting in Texas.
Texas law requires a constitutional amendment to legalize sports wagering, meaning bills must pass both legislative chambers and receive voter approval in a statewide referendum.
In California, attempts to legalize sports betting are centered on forging partnerships between online sportsbook operators and the state’s influential tribal gaming coalitions. Major operators like DraftKings (NASDAQ:DKNG) and FanDuel (NYSE:FLUT) proposed a unified plan in April that would see a single tribal entity oversee online sports betting, guaranteeing significant annual payments to all 109 California tribes, including non-gaming ones. The proposal has been discussed more in-depth over the last several weeks after being stalled for most of the year. Legalization would likely require a ballot initiative, which could come as early as November 2026, but more likely would be in front of voters in 2027 or 2028.
Polls reveal that about 60% of Californians now support sports betting legalization, although the path is somewhat complicated by the need for tribal consensus and constitutional amendments.
The big picture
Momentum for legalized sports betting and casinos could pick up in Texas and California, with online sweepstakes casinos, daily fantasy sports platforms, and prediction markets making bigger inroads in the states. Kalshi’s aggressive approach includes advertising indicating that prediction markets for sports events are live for residents in California and Texas. There is also the reality that both states continue to lose out on potential tax revenue.
Stocks with ties to sports betting include DraftKings (NASDAQ:DKNG), Flutter Entertainment (NYSE:FLUT), MGM Resorts International (NYSE:MGM), Caesars Interactive (CZR), Rush Street Interactive (RSI), Wynn Resorts (WYNN), Penn Entertainment (PENN), Bally’s Interactive (BALY), Sportradar (SRAD), Genius Sports (GENI), GAN Limited (GAN), Churchill Downs (CHDN), and Boyd Gaming (BYD). Privately owned Fanatics (FANA), Bet365, Circa Sports, and Hard Rock International are also active in sports betting in the U.S.