Embattled Texas Attorney General Ken Paxton threw down the gauntlet on another front on Tuesday when he issued a non-binding opinion declaring daily fantasy football to be illegal gambling as defined under Texas law. Paxton’s office issued an opinion in response to a request from Rep. Myra Crownover asking whether daily fantasy leagues such as DraftKings and FanDuel were illegal, and whether fantasy sports leagues where the house does not take a rake and the participants wager only among themselves are legal.
The issue turns on the application of Chapter 47 of the Texas Penal Code which prohibits betting on the outcome of sports games or contests or the performance of a participant in a game or contest. The crux of Paxton’s opinions revolves around the question of whether participating in a commercial daily fantasy league constitutes a bet. Paxton concludes that because there is an element of chance in those games, then regardless of the skill level involved in picking particular players, participants are placing a bet when they participate in fantasy football. Therefore, Paxton concludes that commercial daily fantasy football is illegal gambling in Texas.
With respect to the more traditional season-long fantasy leagues where the participants are betting against each other and the house does not take a rake, Paxton concludes that such leagues fall under an exception to the illegal gambling laws.
“Under this statutory framework, odds are favorable that a court would conclude that participation in paid daily fantasy sports leagues constitutes illegal gambling, but that 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 other words, Paxton is going long on the courts finding that your friendly workplace fantasy football league is okay. Red predicts that this non-binding decision – more than his other well-documented legal problems – will hurt Paxton’s chances for re-election.