Editor's note: This story has been updated throughout.
While placing bets on fantasy sports sites might involve skill, there is still an element of chance that equates such leagues with illegal gambling in Texas, Attorney General Ken Paxton said in a nonbinding opinion released Tuesday.
The "odds are favorable that a court would conclude that participation in paid daily fantasy sports leagues constitutes illegal gambling," Paxton said in the nine-page opinion. But "participation in traditional fantasy sport leagues that occurs in a private place where no person receives any economic benefit other than personal winnings and the risks of winning or losing are the same for all participants does not involve illegal gambling."
In November, state Rep. Myra Crownover, R-Denton, asked the attorney general to weigh in on whether fantasy sports sites such as DraftKings.com and FanDuel.com were legal in Texas. The request came days after New York's attorney general declared such sites to be illegal gambling.
Those who use the sites pay entry fees to put together fantasy teams using real athletes.
Randy Mastro, a lawyer for DraftKings, took issue with how the attorney general said the courts would determine whether fantasy sports sites are legal under Texas law.
"The Texas Legislature has expressly authorized games of skill, and daily fantasy sports are a game of skill," Mastro said. "The Attorney General's prediction is predicated on a fundamental misunderstanding" of fantasy sports sites.
Peter Schoenke, chairman of the Fantasy Sports Trade Association, which represents the fantasy sports industry, said that Paxton should "stop grandstanding and start working with the FSTA and the Texas Legislature on common-sense consumer protection issues like those being proposed in Massachusetts, Florida, Indiana, Illinois, California and other forward-looking states."
"Paxton's deliberate misinterpretation of existing Texas law represents the type of governmental overreach that he himself professes to reject," Schoenke added.
In a statement Tuesday, Crownover said she requested the opinion to clarify the law on fantasy sports sites. "It is our responsibility to try to make sure no business is profiting from illegal activity in Texas."
- AG Ken Paxton's Opinion on Fantasy Sports Leagues (418.6 KB) DOWNLOAD