Texas Attorney General opinion on daily fantasy sports

- In a legal opinion released on Tuesday, Texas Attorney General Ken Paxton says that daily fantasy sports operations like Draft Kings and Fanduel contradict Texas law.

“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,” said Attorney General Ken Paxton in a statement. “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.”

The statement also included the following interpretation:

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.

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