Texas Attorney General Ken Paxton yesterday issued an opinion that daily fantasy sports contests "violate Texas laws against gambling," according to a front-page piece by Chuck Lindell of the AUSTIN AMERICAN-STATESMAN. Paxton added that DFS operators also "violate gambling laws by keeping a portion of the fees." DraftKings "vowed to continue operating in Texas while criticizing Paxton’s opinion as uninformed and mistaken." FanDuel "raised similar objections but declined to say whether daily fantasy games would continue to be offered to Texans." Paxton said, "Texas law does not require that skill predominate." Paxton’s office "declined to discuss whether the opinion could be followed by a lawsuit or other action to block daily fantasy games in Texas" (AUSTIN AMERICAN-STATESMAN, 1/20). Paxton in an editorial wrote Texans "have a deep culture of skepticism toward gambling and its impact on our communities." State law is "clear that gambling laws are triggered by partial -- that is to say, any -- chance." Paxton: "To be clear, your traditional fantasy league, where the participants either do not gamble money or they split the entire pot, is -- as a general rule -- legal. It’s when third parties get a cut of the pot that they get into dangerous legal ground." This is "about the companies acting, in essence, as the house, making millions of dollars off of Texans who lose money every week" (AUSTIN AMERICAN-STATESMAN, 1/20). In Houston, Fikac & Moyle note Paxton's opinion "came despite a flood of emails to his office supporting the games." The Fantasy Sports Trade Association said that there "are more than 2 million fantasy sports players in Texas" (HOUSTON CHRONICLE, 1/20).
TEXAS TWO-STEP: Mavericks Owner Mark Cuban, following Paxton's opinion, tweeted, "What a disappointment." Cuban also tweeted at Paxton, "You certainly don’t represent the views of Texans" (DALLAS MORNING NEWS, 1/20). FSTA Chair Peter Schoenke in a statement said, "Paxton's deliberate misinterpretation of existing Texas law represents the type of governmental overreach that he himself professes to reject. The FSTA vehemently opposes today's opinion" (DALLASNEWS.com, 1/19). A FT. WORTH STAR-TELEGRAM editorial states that open gambling in Texas is "meant to be under strict state control, and the Legislature decides what those controls should be" (FT. WORTH STAR-TELEGRAM, 1/20).
REGULATORS, MOUNT UP: In Houston, Bobby Cervantes writes the DFS industry was "aggressively lobbying Paxton to issue an opinion that didn't undercut their attempts at seizing the Texas market, touting the attorney general's own political belief in a little-to-no-regulation state." Now the lobbying "turns now to the lawmakers who almost certainly will face the issue when they come back to Austin" for the next legislative session (HOUSTON CHRONICLE, 1/20). In N.Y., Joe Drape adds with DFS barred in Texas, New York and Illinois, FanDuel and DraftKings are "at risk of losing" more than 25% of their customers (N.Y. TIMES, 1/20). In Boston, Curt Woodward notes regulators in Nevada, Vermont and Maryland "have also recently cast doubt on the legality" of DFS (BOSTON GLOBE, 1/20).
