Fertitta Entertainment Counsel Doubts Texas Will Legalize Gaming, Expects Supreme Court to Favor States on Prediction Markets
Fertitta Entertainment's general counsel told Nevada regulators he doubts Texas will legalize gaming soon and expects the Supreme Court to side with states over prediction market platforms like Kalshi.
Steven Scheinthal, general counsel and executive vice president of Houston-based Fertitta Entertainment, told Nevada gaming regulators this week that he does not expect Texas to legalize gambling in the near future — and that he believes the Supreme Court will ultimately side with states in the escalating legal fight over sports-related prediction markets.
Scheinthal made the comments Thursday while appearing before the Nevada Gaming Commission for licensing as a member of Fertitta Entertainment’s board, offering a rare public window into how one of the industry’s most connected insiders views two of the biggest open questions facing gaming right now: Texas expansion and the prediction markets showdown.
Texas Gaming Still Stuck in Neutral
Las Vegas Sands has spent years pushing an unsuccessful campaign to get gaming approved through the Texas Legislature, but Scheinthal was blunt about the odds of that changing soon. “Based on the current state politics, I don’t envision that gaming would come to Texas,” he said. “Things could change, but if the politics stay the same in 2028, nothing will change in Texas until 2032.”
That timeline lines up with the state’s biennial legislative calendar, meaning any realistic shot at legalized gaming would need to clear the Texas Legislature in a 2027 or 2029 session before taking effect — a heavy lift given how consistently expansion bills have stalled in Austin.
Prediction Markets Headed for a Supreme Court Reckoning
Scheinthal was equally direct about where he expects the prediction markets fight to land. Platforms like Kalshi and Polymarket have argued their sports-related event contracts are federally regulated derivatives under the Commodity Futures Trading Commission’s jurisdiction, exempting them from state sports betting laws entirely. States including New Jersey, New York, Arizona, Connecticut, Illinois, Massachusetts, Tennessee, Nevada, Maryland, and Ohio have pushed back with cease-and-desist orders and lawsuits, arguing the products are unlicensed sports betting hiding behind a “swap” label.
“Ultimately, the Supreme Court will say it’s up to the states to decide and it will be up to each state to determine the rules,” Scheinthal said. “If the states make it unlawful, I don’t think a prediction market company will be able to point to the CFTC as a protection point once the Supreme Court speaks to it. I’m hypothesizing, but if you look at who’s on the Supreme Court and their previous decisions about state’s rights, that would be the direction they’d head.”
That view cuts against recent momentum in the lower courts, where the CFTC has notched wins — including a Third Circuit panel ruling that found the Commodity Exchange Act likely preempts state gambling law for Kalshi’s sports contracts. But with rulings split across jurisdictions and the CFTC actively suing multiple states to defend its jurisdiction, most legal observers tracking the litigation agree the dispute is on a direct path to the Supreme Court.
A Notable Investor Bets Against the Platforms
Scheinthal also revealed that a well-known investor who famously shorted the housing market during the 2008 financial crisis has taken stakes in both FanDuel and DraftKings, betting that prediction markets will ultimately be shut down by state regulators and the courts — essentially a wager that legacy operators emerge as the long-term winners once the legal dust settles.
Clearing Up the Fertitta-DraftKings Ownership Question
Scheinthal also used the hearing to clarify Tilman Fertitta’s relationship with DraftKings. Fertitta and his company hold roughly a 2% stake in DraftKings stock but have no board seat or operational control. Reports had previously suggested Fertitta could join the DraftKings board, but the NBA indicated that arrangement would require DraftKings to remove the Fertitta-owned Houston Rockets from its DraftKings app.
“That’s not something DraftKings was willing to do,” Scheinthal said. “So Tilman agreed to never become a board member. He has zero operational control. He’s an investor just like you or I might own some shares in DraftKings stock.” Scheinthal added that he personally owns DraftKings shares as well.
With the CFTC continuing to file suits against states defending its jurisdiction and a bipartisan Senate bill aiming to reclassify sports event contracts as gambling outright, the prediction markets fight shows no signs of slowing — and insiders like Scheinthal expect the answer to ultimately come from the nation’s highest court rather than Congress or state legislatures. For bettors tracking where legal sports wagering stands in states still weighing expansion, the Texas sports betting legal guide breaks down the current landscape and what would need to change.
As the CFTC and state regulators continue trading lawsuits over event contracts, bettors who want to stick with fully state-licensed sportsbooks can compare current offers through the DraftKings Promo Code page while the legal questions play out in court.