Texas Attorney General Ken Paxton labels daily fantasy sports leagues operating in Texas “illegal gambling” sites.
In November, Denton Republican Rep. Myra Crownover requested Paxton’s opinion on whether daily contests put out by companies like DraftKing and FanDuel constitute gambling and therefore violate Texas law.
In his non-binding legal opinion, Paxton writes: “Paid daily ‘fantasy sports’ operators claim they can legally operate as an unregulated house, but none of their arguments square with existing Texas law. Simply put, it is prohibited gambling if you bet on the performance of a participant and the house takes a cut.”
“We have a regulatory scheme where if its authorized, like the lottery the state has a carve out for that and then Bingo and Horse-racing and there is carve-outs for that but those are highly regulated. And in this case what this is totally unregulated gambling, the reason we say that is because in Texas under the law if there is any chance in a game, under law it is considered gambling," Paxton explained.
The chairman of the Fantasy Sports Trade Association Peter Schoenke calls Paxton’s opinion a “deliberate misinterpretation of existing Texas law that represents the type of governmental overreach that he himself professes to reject.” Schoenke is asking that the Attorney General work with members of the Texas Legislature in designing a consumer protection plan similar to what is being proposed in Florida, Massachusetts, Indiana, Illinois and California.
Questions about the legality of these online contest came to a head following legal action taken in the States of New York and Nevada in 2015.
