Texas Daily Fantasy Sports Bills Seek to Challenge State AG’s Stance on Legality

Posted on: February 3, 2017, 03:00h. 

Last updated on: February 3, 2017, 12:19h.

Texas received three daily fantasy sports (DFS) bills in quick succession this week, each aimed at legalizing and developing a framework of regulation for the contests.

Texas DFS bills seek to challenge Paxton stance
Texas Attorney General Ken Paxton sparked a lawsuit when he opined that daily fantasy sports were illegal under state law. A triple-pronged legislative approach from Representative Richard Raymond hopes to challenge that opinion. (Image: Eric Gay/Associated Press)

The state missed out on the DFS legislation trend that appeared on the dockets of legislatures across the country in 2016 due to the fact that its legislative session is biennial, but it appears to be making up for lost time.

Each of the three bills is sponsored by State Representative Richard Raymond (D-Laredo). His co-sponsors vary, as does the language of each bill, although they also chime in on many matters.

As a body of legislation, the three bills address the key preoccupations of legislators across the US, from player protections and operator registration fees, to the segregation of player funds. Curiously, though, one bill ignores the latter somewhat crucial point altogether. Likewise, two bills would define DFS as games of skill, while one wouldn’t bother.

Representative Raymond is clearly hedging his bets.

The Letter of the Law

Raymond said he hoped his triple-pronged approach would “clarify a confusing and ambiguous law and affirm that fantasy sports are legal in Texas.”

He told the Texas Fantasy Sports Alliance that “the government should not be limiting the freedom of Texans to participate in fantasy sports contests, which are clearly a game of skill, not chance.”

Texas became a legal battleground for DFS when, in January 2016, Texas AG Ken Paxton deemed the contests to be illegal games of chance under Texas law.

He said it was “beyond reasonable dispute that daily fantasy leagues involve an element of chance regarding how a selected player will perform on game day.”

“Paid daily fantasy sports operators claim they can legally operate as an unregulated house, but none of their arguments square with existing Texas law,” he added.

“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 concluded.

DraftKings Sues Texas AG

FanDuel quickly pulled out of the Texas market, but DraftKings, which had a sponsorship deal with the Dallas Cowboys, dug its heels in and sued Paxton.

DraftKings claimed his opinion had jeopardized its relationship with the Cowboys and that many Texans had closed their accounts as a result of his statement. The company’s lawyers asked the judge to clarify that DFS was not illegal in Texas.

Paxton said the case should be dismissed because his sovereign immunity protected him from lawsuits.

“This lawsuit reflects a corporation’s attempt to protect its preferred business model: profiting from paid online daily fantasy sports in Texas,” he said.

The case is ongoing.