Texas Attorney General declares daily fantasy sports leagues illegal

Texas Attorney General Ken Paxton declared participating in daily fantasy sports is illegal in the state of Texas.

“Because the outcome of games in daily fantasy sports leagues depends partially on chance, an individual’s payment of a fee to participate in such activities is a bet,” Paxton said in an opinion statement on Jan. 19.

Fantasy sports leagues allow everyday people to simulate being a sports team owner or manager. Under a salary budget, they assemble a team or lineup comprised of actual professional athletes. Selected athletes’ statistical performances in real sports games are then converted into points for the individuals in the fantasy sports leagues.

Traditional fantasy sports leagues play privately, usually only among friends and families, keeping track of athletes’ performances throughout the overall sports season.

Daily fantasy sports leagues play with more people, following athletes’ statistics in each and every game. Multi-billion dollar companies like DraftKings and FanDuel charge an initial fee to play and keep a percentage of the earnings.

Money is the difference.

“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 said.

One of the biggest ‘houses’ – DraftKings – countered Paxton, saying they “strongly” disagree and that he is misunderstanding the fundamentals of daily fantasy sports.

“The Texas Legislature has expressly authorized games of skill, and daily fantasy sports are a game of skill,” Randy Mastro, lawyer of DraftKings said. “ … We intend to continue to operate openly and transparently in Texas, so that the millions of Texans who are fantasy sports fans can continue to enjoy the contests they love.”

“DraftKings and FanDuel have argued that their games are based on skill, not chance, and insisted that their operations are not illegal because they do not accept wagers, and because their success does not rely on any particular result,” a CBS Dallas Fort Worth article said.

However, Paxton isn’t the only one concerned with the financial aggressiveness of daily fantasy sports. Attorney generals of New York and Illinois also “determine that daily fantasy sports are illegal according to their state’s gambling laws,” ESPN San Antonio said.

On the contrary, Dallas Cowboys’ owner Jerry Jones has a DraftKings lounge at the AT&T Stadium, while Dallas Mavericks owner Mark Cuban was a keynote speaker at the Fantasy Sports Trade Association’s recent winter meeting, per CBS Dallas Fort Worth.

Paxton also said, the “odds are favorable that a court would conclude that participation in paid daily fantasy sports leagues constitutes illegal gambling.”

Now, the legal decision about daily fantasy sports is in the hands of the State Legislature.