Texas continues to look less and less like a Democratic long shot on prediction markets, and a lot more money is trading on the outcome.
James Talarico is now at 66% to win the Senate race on Kalshi, with $35 million in trading volume. That gives the Democratic state representative roughly a two-in-three chance of defeating Republican Attorney General Ken Paxton.
The price is higher than the roughly 62%-63% probabilities reported across Kalshi and Polymarket last week. The available snapshots show a strengthening position for Talarico, although they do not establish how much of the $35 million in cumulative volume traded during that move.
Recent polls support Democratic optimism, but not a comfortable lead. Several put Talarico ahead by two to four points, while an InsiderAdvantage survey gives Paxton a one-point advantage. Cook Political Report and Sabato’s Crystal Ball both rate the contest a toss-up.
A market favorite in a close polling race
Talarico’s 66% market probability is not a forecast that he will receive 66% of the vote. It reflects the price traders are assigning to his chances of winning a closely divided contest.
The pattern favors Talarico more often than Paxton, but the margins remain narrow. Traders can reasonably make one candidate the favorite without expecting a large victory, and a 66% price still leaves substantial room for a Republican win.
That distinction also surfaced in CBS Austin’s Oct. 19 market coverage. Kalshi’s margin-of-victory market priced a Talarico win of about 1.6 percentage points, according to an analyst quoted in the report. That was a snapshot of a separate contract, not a current forecast or a polling result.
Talarico has weathered a campaign interruption
The Democrat’s market advantage has persisted through Republican attacks over a nine-day absence from the campaign trail earlier this month.
Talarico returned to public campaigning as a Trafalgar Group survey showed him ahead 47.1% to 43.6%. That poll surveyed 1,086 likely voters Oct. 6-8. On Oct. 11, Newsweek reported him at 63% on Kalshi and 64% on Polymarket despite the controversy.
The current 66% Kalshi snapshot therefore represents a further improvement from an already favorable position, not a sudden transformation from underdog to favorite.
Paxton, meanwhile, is trying to hold the seat after defeating incumbent Sen. John Cornyn in the Republican primary runoff. The general election now pits a Republican attorney general with a statewide political base against a Democratic state legislator in a contest both major nonpartisan ratings organizations consider competitive.
The $35 million matters, but needs a baseline
At $35 million, the Texas market has attracted considerably more trading than the Ohio Senate contest discussed in DeFi Rate’s latest update.
The Oct. 21 report put former Sen. Sherrod Brown at 67% on Kalshi with $8.2 million in volume. Texas has drawn more than four times that activity, while the two Democratic candidates have almost identical implied win probabilities.
That is a notable concentration of trading in a Republican-held seat. But cumulative volume measures contracts changing hands, not distinct traders, fresh money entering the market or money currently at risk.
Texas adds another route for Democrats
The significance extends beyond whether Talarico can win one unusually competitive race.
Texas and Ohio give Democrats potential pickups in Republican-held seats rather than requiring every gain to come from the most familiar battlegrounds. A Talarico victory would also deny Republicans the seat Paxton won the nomination to defend following Cornyn’s primary defeat.
But the market advantage should not obscure the electoral task. The latest surveys show a close contest, not evidence that Texas has become safely Democratic. Talarico leads several polls, Paxton leads at least one, and the race remains a toss-up in the major ratings.
For now, traders are willing to go further than that label. With $35 million traded and Talarico at 66%, Kalshi is treating a Democratic win in Texas as the more likely outcome, not merely an upset worth watching.
