Will Texas Punt Again On Legalizing Daily Fantasy Sports?
ARLINGTON, Texas (CBSDFW.COM) - When the Super Bowl kicked-off, millions of Texans also had their eyes on another game – hoping to win big money.
"It's like stocks. You are always chasing the big dream," said David Sharp of Arlington, one of an estimated four million Texans who play daily fantasy sports.
"I play every single day," Sharp said. "It makes sports more interesting to watch but the drawl is the money."
Daily fantasy sports has grown into multi-billion dollar industry despite being on shaky legal ground in Texas.
To play the online sports fantasy game: contestants pay a fee; pick athletes they think will do the best that day; and, if they do, contestants can win big money.
DraftKings and FanDuel are the two largest companies in the industry. Both have spent millions in recent years to flood the airwaves with commercials, enticing sports fans with chances to win large money prizes.
But while millions of fans try and figure out which players are the best to select, there's a far bigger question that looms over daily fantasy sports.
Are daily fantasy sports legal in Texas?
"There's no definitive answer to that and that's the issue," said attorney Bob Latham with the Texas-based law firm Jackson Walker.
In 2016, as the popularity of daily fantasy sports exploded across s the country, state lawmakers asked Texas Attorney General Ken Paxton if he thought daily fantasy sports was a legal activity.
In a non-binding opinion, the state's top legal official said because the contest results are "partially on chance," participation is considered "illegal gambling".
Immediately after Paxton issued his opinion, FanDuel pulled out of Texas and DraftKings sued - saying the attorney general distorted Texas law.
That court case is still pending.
In 2018, FanDuel began accepting players from Texas again for real money contests while DraftKings never stopped taking players from the state.
Five years after Paxton's opinion rattled the industry, the answer to whether daily fantasy sports is legal in Texas is still not clear.
"The issue is murky," said Latham, who was named DFW Sports Lawyer of the Year. "It comes down to what you think a daily fantasy sports league is. Where do you draw the line between skill and chance? Most lawyers could probably make the argument on both sides."
Latham said when anti-gambling laws were established in Texas, daily fantasy sports did not exist which is why there's no definitive answer on whether the online fantasy games are legal in the state.
However, Latham said the legislature could change this by clearing defining daily fantasy sports as legal or not.
In the past several years, dozens of states have passed laws defining daily fantasy sports but every time Texas lawmakers had a chance to do the same, they punted.
Bills were filed in Austin in 2017 and 2019 that would have defined daily fantasy sports as a game of skill.
In 2017, the bill never even made to the House floor for a vote.
In 2019, the bill passed the House but was never brought up for a final vote in the Senate.
Representative Joe Moody of El Paso has filed the bill again this year.
"Let's fix this. Let's make it clear," he said.
Moody is not aware of any Texan who's been prosecuted for fantasy sports gambling but said the legal risk is real.
"It only takes one prosecutor somewhere that thinks this is illegal betting," he explained. "It's better to be safe than sorry."
In a statement from DraftKings, Chief Legal Officer R. Stanton Dodge said, "The opening of the legislative session marks the beginning of a renewed effort to pass legislation on behalf of the millions of Texans who love fantasy sports. We remain committed to working with our partners in the legislature—and engaging fantasy sports fans in Texas—to pass common sense legislation this session. We remain fully confident in the legality of fantasy sports in Texas."
The Southern Baptists of TX Convention has been one of the more vocal groups opposed to efforts in Texas to legalize daily fantasy sports.
In a statement, the SBTC said, "We believe daily fantasy sports is online gambling made easily available to engage on every smart phone, college campus, place of employment, or family living room. We believe a whole new generation of young people are being targeted and lured into gambling and getting them hooked."
FanDuel did not return the CBS 11 I-Team's request for comments.
