Texas AG Says Daily Fantasy Sports Violate Texas Law, Knows Very Little About Sports

Texas Attorney General Ken Paxton's decision was inevitable. Once state Representative Myra Crownover asked for the AG's opinion on daily fantasy sports, the opinion could only really come down one obvious way. Paxton, in an opinion issued Monday, says that the games are considered gambling under Texas law. That means they're, according to Paxton, currently illegal and can only become legal if the Texas Legislature votes to allow them.

Crownover asked Paxton for guidance on two issues — the legality of daily fantasy sports, which are a relatively new phenomena, and the continued legality of more traditional fantasy sports in the state. Daily fantasy sports games are hosted by online companies — Fanduel and DraftKings are the two most ubiquitous — and require participants to select a lineup of players participating in a given league's games over as little as a few hours, or as much as a few days. Players are assigned a dollar value and teams are required to adhere to a salary cap. Unlike full-season fantasy sports, players can be selected by more than one team, making finding sleepers essential and the game much tougher to crack for the average player.

The sites that host daily fantasy sports collect a portion (between 4 and 13 percent) of the entry fees charged to participate in their contests. According to Paxton, that's where they run afoul of Texas law. Texas classifies gambling as any activity in which a participant risks money on the outcome of any event that is at least partially determined by chance. An exception is made for games where the house doesn't take a cut — like a home poker game without a rake.

"It is beyond reasonable dispute that daily fantasy leagues involve an element of chance regarding how a selected player will perform on game day. The participant's skill in selecting particular player for his team has no impact on the performance of the player or the outcome of the game," Paxton says.

Which, fine, that makes since. But then Paxton starts citing examples of things that are outside of fantasy players' control, like Baylor losing three starting quarterbacks this season, or the weather during the infamous 1993 Cowboys/Dolphins Thanksgiving game.

"[A] selected player may perform well or perform poorly against the opponent that week, perhaps due to weather conditions such as a defensive tackle diving on a football after a blocked field goal attempt, only to allow the other team to recover the ball and score the game-winning touchdown," Paxton says, before pointing to an NPR story recounting Leon Lett's experience in the aforementioned game at Texas Stadium.

Only that's not what happened in that game. Lett did indeed slide into an otherwise dead ball after what appeared to be a game-ending blocked field goal attempt by the Cowboys. That was a stupid decision that had nothing to do with the weather. Add in the fact that the Dolphins didn't score a game-winning touchdown — Pete Stoyanovich lined up for and knocked through a much shorter field goal — and Paxton has called any authority he might have had on the issue into question.

Kidding aside, Paxton does allow that the fantasy sports we all know and love, the shit-talking leagues we've been in since college, are legal, as long as the commish isn't making any money off entry fees.

Paxton's opinion is non-binding, but can be leaned on by a court should the Legislature and daily fantasy providers clash as to whether daily fantasy can continue in Texas. Fanduel gave us the following statement when we asked for comment:

"Today’s advisory opinion by the Attorney General of Texas is founded on a misinterpretation of the law and misunderstanding of the facts about fantasy sports. Fantasy sports has always been a legal contest of skill in Texas. The Texas legislature has expressly recognized that payment of an entry fee to compete for prizes in a contest of skill is not illegal gambling. Texans have long enjoyed participating legally in a wide variety of contests on that basis. The Attorney General’s advisory prediction that a Texas court might think fantasy sports fall outside that protection because fantasy sports contestants are not actually participating in the sports events disregards that the selection of a fantasy roster to compete against other contestants’ selections is a separate valid contest of skill all its own," Fanduel Counsel John S. Kiernan said.
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Stephen Young has written about Dallas news for the Observer since 2014. He's a Dallas native and a graduate of the University of North Texas.
Contact: Stephen Young