The Attorney General in Texas is the Latest to Declare DFS Illegal

Texas Attorney General, Ken Paxton, (Rep) agrees with the opinions issued in Illinois, New York, and Nevada that the Daily Fantasy Sports (DFS) operators are violating state law and that they are operating illegal gambling enterprises.

The answer to a query from Myra Crownover Texas State Rep. (R-District 64), A.G. Paxton linked the elements of chance that are associated with the contests to gambling.

A.G. Paxton continued that the “Paid Daily ‘Fantasy Sports’ operators are claiming that they can legally operate, however, none of their arguments are square with the existing Texas laws, he said that because the outcome of the games in Daily Fantasy Sports leagues are dependent partially on chance, and that the individual’s payment of a participation fee in such activities is constituted as a bet.

A.G. Paxton, unlike his fellow colleagues in Nevada and New York, A. G’s. Eric Schneiderman and Adam Laxalt, did not announce any legal repercussions or to order the DFS market leaders, DraftKings and FanDuel, to cease their operations in his state. Yet.

So Are You Telling Me There’s a Chance?

A.G Paxton is not interested in venturing into complicated debates of whether Daily Fantasy contests is constituted as gambling or skill-based competition. Because in his state, just the slightest component of chance will override all other factors.

He said that unlike some other states, The law in Texas only requires a ‘partial chance’ for something to be considered gambling and it does not require that the chance will predominate.

The second issue that A. G. Paxton has with DFS, is that a house is involved, very much the way casinos operate for poker. In other words, he said the house was facilitating the game for a set fee, but they are not taking a cut of the losses.

In traditional Fantasy Sports, there is no house, according to A.G. Paxton’s belief, that traditional Fantasy Sports Leagues were not gambling, but DFS is.

He also said that if the DFS operators did not take a cut off individual entry fees and instead they paid-out the entire pot, as in most of the regular Fantasy leagues do, among friends, that could help the DFS operators cause and it would also make them broke.

Put simply, AG Paxton said that it prohibited gambling in Texas if players bet on the performance of participants in a sporting events and that the house took a cut.

The DFS operators responded to A.|G Paxton’s declaration, saying that A.G had a “fundamental misunderstanding of the DFS.”

FanDuel stated that today’s advisory opinion by the A. G. of Texas was founded on fact that he misinterpreted the law and had a misunderstanding about the facts related to Fantasy Sports.

Both operators said that they intended to continue to operate lawfully in the state.