AUSTIN, TX – On Tuesday, Texas Attorney General Ken Paxton issued an opinion in response to a legislative inquiry regarding the legality of online gaming.
Daily fantasy sports sites Fanduel and Draft Kings have come under fire from both New York and Illinois which have made it illegal to participate in the daily online gaming.
“It’s my duty as Attorney General to look to the law, as passed by the people’s representatives, to answer the questions put to this office,” Attorney General Ken Paxton said. “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 in Texas if you bet on the performance of a participant in a sporting event and the house takes a cut.”
Paxton believes these sites are also wrong in claiming an actual-contestant exception, which applies only to contestants in an actual skill or sporting event. And unlike some other states, Texas law only requires “partial chance” for something to be gambling; it does not require that chance predominate.
The opinion makes clear that traditional fantasy sports leagues are, as a general rule, legal under Texas law. In those leagues, participants generally split any pot amongst themselves, so there is no house that takes a cut.