Sports betting stocks are trading broadly higher today with Texas’s midterm election results figuring prominently in that scenario.

On Tuesday, Democrats Gina Hinojosa and Vikki Goodwin defeated Republican incumbents Gov. Greg Abbott and Lt. Gov. Dan Patrick, sparking hopes that the Lone Star State could revisit the issue of online sports betting.

With commercial operators’ relationships with California tribal casino groups fractured and that state unlikely to consider a sports wagering ballot initiative prior to 2028 and due to the Seminole Tribe holding a monopoly on internet sports wagering in Florida, Texas is the gaming industry’s proverbial golden goose.

Goodwin Victory a Big Deal, But There’s Work to Do

Texas bettors and industry observers may be focusing on Goodwin’s victory because in the Lone Star State, the lieutenant governor holds an unusual amount of power and sets the agenda for the State Senate.

In 2024, the Texas House of Representatives passed a mobile sports wagering bill, but that legislation didn’t advance in the Senate due to Patrick’s anti-gaming stance. For her part, Goodwin is supportive of putting the issues of both iGaming and mobile sports wagering to Texas voters, positioning her stance in freedom of choice fashion.

Under the Texas constitution, two-thirds majorities in both legislative chambers — still controlled by Republicans — are required to advance gaming expansion legislation before voters have the final say on the issue. Previous polling suggests there is bipartisan support among Texas voters to approve online sports betting.

Atop the new Texas political hierarchy, Hinojosa hasn’t been vocal about gaming issues, but she did oppose the 2023 sports wagering amendment.

The Prediction Market Wildcard

In addition to hopes that Texas could revisit sports wagering now that Democrats control the state’s top offices, there’s also talk that the shift in power could compel the state to pursue litigation against prediction markets, which are operating largely unfettered there. Some analysts are speculating that a similar groundswell could emerge in Georgia.

With neither Georgia nor Texas allowing sports betting, prediction market operators lean into that, frequently mentioning both states in their advertising campaigns. In industry circles, there’s talk indicating that some states where sports betting isn’t legal are tired of prediction markets flouting gaming regulations and not paying taxes. That could motivate some of those jurisdictions to consider sports wagering for revenue-generating purposes while taking hard lines against yes/no exchanges.

Another possibility, though still fluid at this point, is Oklahoma, Texas’s northern neighbor, could again examine sports wagering if Texas does the same. Republican Governor-elect Mike Mazzei said on the campaign trail that he wants to repair the relationships with tribal casino operators that were damaged under Gov. Kevin Stitt (R-OK). Mazzei’s collegial tone could pave the way for Oklahoma tribes to eventually offer internet sports wagering.