Texas HB 598 would ban prediction-market contracts on lawsuits and disasters and fine operators $25,000 per underage trader

A Texas House bill filed for the 2027 legislative session would bar prediction-market operators from offering Texans contracts on pending civil lawsuits, criminal cases and a list of other violent or tragic events. Operators could face civil penalties of up to $25,000 for each person under 21 they allow to trade. House Bill 598, by state Rep. Salman Bhojani, was filed on November 9, 2026, according to the Texas Legislature Online bill history. The 90th Legislature convenes in January 2027.

Who the bill covers

HB 598 would add Chapter 623, "Prediction-Market Event Contracts," to Title 13 of the Business & Commerce Code. Under Section 623.002, it applies to an operator that offers or provides access to event contracts for an individual physically located in Texas, "regardless of the location of the operator."

The chapter would not apply to insurance contracts issued by authorized insurers, or to pari-mutuel wagering, the state lottery, bingo or raffles conducted under state law. It also states that it "does not authorize, legalize, or license gambling, sports wagering, or other conduct prohibited by Chapter 47, Penal Code," and does not make individuals liable solely for trading event contracts for their own account.

12 categories of banned contracts

Section 623.051 lists 12 categories of contracts that operators could not offer to people in Texas. They cover:

• criminal investigations, arrests, and criminal or juvenile justice proceedings, including their outcomes;
• death sentences, pardons, commutations, parole and other clemency decisions;
• pending civil actions or proceedings;
• an individual's death, injury, illness, mental health or health status;
• suicide, self-harm or drug overdoses;
• assassinations, kidnappings and hostage-taking;
• terrorism, mass shootings and other mass violence;
• homicides, sexual assaults, family violence, child abuse and other offenses against a person;
• war, armed conflict, military strikes or the use of nuclear, chemical or biological weapons;
• deaths, injuries, displacements, property damage, power outages or disaster declarations linked to a natural or man-made disaster;
• epidemics, pandemics or disease outbreaks;
• arrests, detentions or deportations by law enforcement or immigration agencies.

The list does not include sports, elections or other categories.

Geolocation, age checks and advertising

Operators would have to use "commercially reasonable measures" to find out whether a user is in Texas and to block prohibited contracts. They could not knowingly help users get around those checks, "including by means of a virtual private network or proxy server."

Users in Texas would have to be at least 21. Operators would have to verify age with a commercial system that checks government-issued ID or uses "public and private transactional data." They could not rely solely on a user's own statement of age or date of birth. An operator that learns an under-21 user has been given access would have to "promptly disable" that user's event-contract trading, but would not have to close an account used for other lawful transactions. Personal data collected only for age verification could not be sold or used for other purposes.

Advertising aimed mainly at people under 21 would be banned. So would ads placed at primary or secondary schools or run through paid school promotions, ads featuring anyone under 21, and ads promoting prohibited contracts. Every ad in Texas would have to state clearly that participants must be at least 21.

Penalties and timeline

Enforcement would sit with the Texas attorney general, who could sue an operator believed to be knowingly violating the chapter. The suit could seek an injunction, civil penalties and other relief, and the attorney general could recover attorney's fees, court costs and investigative costs.

Penalties would be capped at $10,000 per violation, or $25,000 for violations of the age rules. Under Section 623.151(d), each distinct prohibited contract, each underage individual allowed to trade and each distinct advertisement would be a separate violation. Multiple trades in the same contract, or repeated displays of the same ad, would not count as extra violations. In setting penalties, courts would consider how serious the violation was, the operator's prior violations, whether it knew or should have known, and its efforts to fix the problem.

The bill would apply only to conduct on or after its effective date, which is set for September 1, 2027. As of November 12, the bill history listed no action after filing.

State efforts to regulate event contracts are also being contested in court; AskSpinner tracks those cases in its Kalshi and prediction market litigation tracker, and summarizes state positions in Is Polymarket legal? Prediction market rules by jurisdiction.