Summary: Polymarket prices Ken Paxton at 61% to win the Texas GOP Senate primary, but polling shows a statistical tie with John Cornyn. We analyze why the November price rebound may overshoot fundamentals.
Executive Summary
Polymarket prices Ken Paxton at 61% to win the Texas GOP Senate primary, but polling shows a statistical tie with John Cornyn. The market did react to Cornyn's $40M ad blitz (Paxton crashed from 75% to 40% in September), but has since rebounded sharply. We believe the November reversal overshoots fundamentals. With 14-24% of voters undecided, Trump still neutral, and a runoff likely, Paxton's 61% price doesn't reflect the underlying uncertainty.
Position: SELL Paxton at $0.61 / BUY Cornyn at $0.26
Edge: 13-19 pts
Conviction: Medium (6/10)
Market: Polymarket • Texas Republican Senate Primary Winner
Resolution: March 3, 2026 Primary (Runoff May 26 if no majority)
--• 1. The Market
Market Question
"Who will win the Texas Republican Senate Primary?"
Race Overview
Four-term incumbent Senator John Cornyn (R) faces primary challenges from Texas Attorney General Ken Paxton and U.S. Rep. Wesley Hunt (R-Houston). The primary is scheduled for March 3, 2026. If no candidate exceeds 50%, the top two advance to a May 26 runoff.
Political Significance
This race is characterized as a battle between the Texas GOP establishment (Cornyn) and the hardline MAGA faction (Paxton). The Texas Tribune describes it as "expensive and brutal." Senate Republican leadership views this situation as critical to maintaining their majority. The Senate Leadership Fund projects spending between $200 million and $250 million if Paxton wins the nomination, due to general election vulnerability, compared to $25 million to $70 million to assist Cornyn in winning the primary.
--• 2. The Consensus
Current Market Odds
• Ken Paxton: $0.61 (61% implied probability) • John Cornyn: $0.26 (26% implied probability) • Wesley Hunt: $0.13 (13.3% implied probability)
Price Movement
The market has swung dramatically over the past four months:
• Early August: Paxton peaked at 75-80%, reflecting early polling that showed him up 15-17 points. • September Crash: Paxton collapsed to ~40% while Cornyn spiked to ~55-60%, briefly taking the lead. This coincided with Cornyn's summer ad offensive, as pro-Cornyn groups spent $40 million of the $52.5 million total primary ad spending, according to AdImpact. • November Rebound: Paxton recovered from September lows back to 61%, while Cornyn fell to 26%.
!Texas GOP Senate Primary Price Chart
The question: Is the November rebound justified, or is it an overcorrection? Polling still shows a tight race, suggesting the swing back to 61% may overshoot fundamentals.
Recent Polling
Polling tells a very different story from the market. The race is essentially tied:
• RCP Average: Paxton 37.3%, Cornyn 35.0% • Pro-Cornyn Poll (Dec 1): Paxton 33%, Cornyn 35%, Hunt 18%, Undecided 14% • Pro-Hunt Poll (Nov 22): Paxton 36%, Cornyn 25%, Hunt 26%, Undecided 14% • PPP/Dem Poll (Dec 2): Paxton 32%, Cornyn 22%, Hunt 22%, Undecided 24% • UH/TSU Poll (Oct 9): Paxton 34%, Cornyn 33%, Hunt 22%, Undecided 11%
Crowd Narrative
The market initially reacted to Cornyn's ad blitz, cratering Paxton's price in September. But Paxton rebounded 21 points from September lows despite polling remaining largely unchanged. RCP still shows a 2.3-point race. Without a clear catalyst, the swing back to 61% appears to overshoot the available data.
--• 3. The Alpha
Position: Paxton is Overvalued
• Market Price: 61% • Fair Value Estimate: 42-48% • Edge: 13-19 percentage points (SELL Paxton / BUY Cornyn)
Fair Value Methodology
RCP shows Paxton at 37.3% in a three-way race with high undecideds. Adjusting upward for primary electorate skew toward MAGA voters and downward for runoff reset risk, we estimate fair value at 42-48%. The market at 61% implies roughly 15 points of overvaluation.
Supporting Evidence
1. Polling Does Not Support 61% Implied Probability
The RealClearPolitics average shows Paxton at 37.3% vs Cornyn at 35.0%, a 2.3-point margin in a three-way race. Even in his most favorable recent poll (pro-Hunt, Nov 22), Paxton leads with only 36%. No credible poll shows him with 50%+ support. The market is pricing Paxton as if he has a commanding lead, even though the race is a statistical tie with 14-24% undecided.
2. Cornyn Already Moved the Market Once
Cornyn's summer ad offensive worked. Paxton dropped from 75-80% to 40% in September, a 35+ point collapse. The market clearly responds to campaign dynamics. With $10.5M cash on hand versus Paxton's $3.2M, and the Senate Leadership Fund prepared to spend $25-70M more, Cornyn has the resources for another push. The question is whether Paxton's November rebound will hold against continued spending.
3. Trump Has Not Endorsed Paxton Despite Aggressive Courtship
Paxton has gone to extraordinary lengths to secure Trump's endorsement: flying to Scotland to meet Trump at his golf course, running TV ads in Palm Beach aimed at Mar-a-Lago, and filing a lawsuit against Tylenol to align with RFK Jr.'s health agenda. Yet Trump remains neutral, saying both candidates are "friends." Senate GOP leaders are actively pushing Trump to endorse Cornyn. Among undecided voters, Trump's approval is 73% (Emerson). His endorsement would be decisive, and Paxton hasn't gotten it.
4. Paxton's Favorables Are Declining
According to the December pro-Cornyn poll, Paxton's net favorables dropped 19 points between October and November. Contributing factors include his wife (state Sen. Angela Paxton) filing for divorce on "biblical grounds" over the summer, citing adultery. His 2023 impeachment by the GOP-controlled Texas House, though he was acquitted by the state Senate, remains fodder for attack ads. Cornyn's campaign launched "KenStoppers" to solicit tips about Paxton's alleged ethical failures.
5. Runoff Scenario Adds Volatility the Market Isn't Pricing
With three major candidates and 14-24% undecided, no one is likely to exceed 50% on March 3. A runoff resets the race entirely. In head-to-head matchups, one pro-Hunt poll showed Cornyn trailing Paxton by 17 points, but also showed Hunt beating Paxton 51-31 with a Trump endorsement. A runoff introduces new dynamics, such as a potential Trump endorsement and a consolidated anti-Paxton vote, that the current market price doesn't reflect.
Risk Factors
• Primary Electorate: Only ~7% of eligible Texans vote in primaries. These are hardcore MAGA voters, Paxton's base. UH polling shows Paxton has a "massive lead" among "Trump Movement" voters. • Gun Bill Liability: Cornyn's role in passing the 2022 bipartisan gun safety bill after the Uvalde massacre remains a major vulnerability. Trump called him a "hopeless RINO" for it. • Hunt Splitting Anti-Paxton Vote: Hunt and Cornyn are both competing for voters who want an alternative to Paxton. In a runoff, this resolves, but in the March primary, it helps Paxton. • Trump Endorses Paxton: If Trump does endorse Paxton, it could be decisive. The race would effectively end.
Catalysts to Watch
• Trump Endorsement: The single most important variable. Any signal from Trump tilts the race dramatically. • January Polling: New public polls will show whether Cornyn's momentum has continued or stalled. • February Ad Blitz: Final push before March 3. Watch for major spending from Senate Leadership Fund. • March 3 Result: If no candidate clears 50%, the market must reprice for runoff dynamics.
--• 4. Bottom Line
Position: SELL Paxton at $0.61 / BUY Cornyn at $0.26
Conviction: Medium (6/10)
Thesis: The market swung from 75% to 40% in September, then back to 61% in November, but polling never moved that dramatically. Paxton's rebound appears to be an overcorrection. With a statistical tie in polling, high undecideds, Trump still neutral, declining Paxton favorables, and a likely runoff that resets the race, 61% is too high.
Fair value: 42-48%.
---• This content is for informational and educational purposes only and does not constitute financial, investment, or trading advice. Prediction markets involve risk, and past performance does not guarantee future results. Always conduct your own research before making any trading decisions