Texas ruling adds to DFS woes

Texas ruling adds to DFS woes

Wednesday, January 20, 2016 Totally Gaming
FSTA chairman Peter Schoenke criticised the AG's decision

Daily fantasy sports (DFS) has been effectively ruled illegal for about one-fifth of the US population in the last three months after Texas became the latest state to find the sector breaches gambling laws.

Ken Paxton, Attorney General of the second most populous US state, said that DFS counts as illegal gambling under Texas law, although he did not confirm whether he would seek to prohibit sites from operating.

The ruling means that DFS has now been found illegal in three of the country’s five most populous states in recent weeks, with the Attorney Generals of New York and Illinois – as well as Vermont - making similar decisions towards the end of 2015. 

With Nevada having told operators to apply for gambling licences in October, a total of 63.5 million Americans have been affected by a series of legal decisions in just 12 weeks.

Texas is considered to be one of the leading markets for fantasy sports, with an estimated 300,000 regular players during 2015, according to research by Eilers & Krejcik Gaming. With about eight per cent of US citizens and DFS players living in the state, it is unsurprising that the Fantasy Sports Trade Association (FSTA) trade group quickly announced that it “vehemently opposes” Paxton’s ruling.

FSTA chairman Peter Schoenke said: “If Attorney General Paxton is truly concerned about the small businesses that operate in Texas and the millions of people in Texas who enjoy fantasy sports, he would 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. The FSTA vehemently opposes today’s opinion.”

Paxton’s official ruling came after state representative Myra Crownover requested clarification of the law relating to the sector.

"It's my duty as Attorney General to look to the law, as passed by the people's representatives, to answer the questions put to this office," Paxton said in a statement.

"Paid daily 'fantasy sports' operators claim they can legally operate as an unregulated house, but none of their arguments square with existing Texas law. Simply put, it is prohibited gambling in Texas if you bet on the performance of a participant in a sporting event and the house takes a cut.

"These sites are also wrong in claiming an actual-contestant exception, which applies only to contestants in an actual skill or sporting event.

“Unlike some other states, Texas law only requires 'partial chance' for something to be gambling; it does not require that chance predominate."

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