Texas Attorney General Ken Paxton released an opinion Tuesday afternoon which declared daily fantasy sports illegal under Texas law.
“Paid daily ‘fantasy sports’ operators claim they can legally operate as an unregulated house, but none of their arguments square with existing Texas law,” Paxton said in a statement. “Simply put, it is prohibited gambling in Texas if you bet on the performance of a participant in a sporting event and the house takes a cut.”
Paxton released the opinion in response to a request issued in November 2015 by State Representative Myra Crownover (R-Denton), who questioned the legality of daily fantasy sports leagues.
“These sites are also wrong in claiming an actual-contestant exception, which applies only to contestants in an actual skill or sporting event,” Paxton said. “And unlike some other states, Texas law only requires “partial chance” for something to be gambling; it does not require that chance predominate.”
Paxton made clear that traditional fantasy sports leagues are legal under Texas law, however daily fantasy sports leagues like FanDuel.com and DraftKings.com, are in his opinion illegal.
“There is a lot of controversy all over the United States about fantasy football and it’s for one reason only. It’s because the states aren’t getting a cut of the money,” attorney Charles Dunn said. “The state of Texas doesn’t get a cut from the millions and millions of dollars played every Sunday and every Saturday by Fantasy Football players.”
Dunn said Texans need to keep in mind that Paxton’s opinion is just that—an opinion, and Paxton has not outright banned daily fantasy sports in Texas.
“I don’t think it is a big deal,” Dunn said in regards to Paxton’s opinion. “Unless the district attorneys of each county go around and put together sting operations and start arresting people for playing fantasy football, his opinion means nothing as a practical aspect.”
“If Attorney General Paxton is truly concerned about the small businesses that operate in Texas and the millions of people in Texas who enjoy fantasy sports, he would stop grandstanding and start working with the FSTA and the Texas Legislature on common sense consumer protection issues like those being proposed in Massachusetts, Florida, Indiana, Illinois, California and other forward-looking states,” Peter Schoenke, chairman of the Fantasy Sports Trade Association, said in a statement Tuesday. “Paxton’s deliberate misinterpretation of existing Texas law represents the type of governmental overreach that he himself professes to reject. The FSTA vehemently opposes today’s opinion.”
Texas joins nearly a half-dozen other states who are currently challenging DraftKings and FanDuel over the legality of daily fantasy sports.
