Texas became the latest state to declare that daily fantasy sports sites violate state law, the state’s attorney general wrote in an opinion released on Tuesday.
Texas Attorney General Ken Paxton wrote “that a court would likely determine participation in daily fantasy sports leagues is illegal gambling” under state law. The opinion came in response to an inquiry from Texas’ House of Representatives.
“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 news release. “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 didn’t announce any immediate action — such as an injunction — to barFanDuel, DraftKings or any other daily fantasy sites from operating in Texas. Katherine Wise, a spokesperson for the Texas’s Office of the Attorney General told USA TODAY Sports in an email that “the opinion speaks for itself” and the office would have no further comment about the opinion.
“We strongly disagree with the attorney general’s prediction about what the courts may or may not do if ever presented with the issue of whether daily fantasy sports are legal under Texas law,” Randy Mastro, a lawyer for DraftKings, said in a statement. “The Texas Legislature has expressly authorized games of skill, and daily fantasy sports are a game of skill.
“The attorney general’s prediction is predicated on a fundamental misunderstanding of DFS. 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.”
The Fantasy Sports Trade Association issued a statement rejecting Paxton’s opinion:
“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. Paxton’s deliberate misinterpretation of existing Texas law represents the type of governmental overreach that he himself professes to reject.”
Paxton joins attorneys general in New York and Illinois who have issued similar opinions on the legality daily fantasy sports in their respective states.
New York Attorney General Eric Schneiderman was granted an injunction to prevent FanDuel and DraftKings from operating in the state, although the injunction was stayed pending ongoing appeals sought by the sites.
The attorneys general in California and Vermont are also weighing the legality of daily fantasy sports.
USA TODAY Sports’ Brent Schrotenboer contributed to this report.
Source: USA TODAY