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Are fantasy sports legal? Texas, Washington, and other states are trying to figure that out

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If fantasy is all that’s keeping you interested in the National Football League, we’ve got some news you might not want to read about. Fantasy sports sites are being targeted once again by legislatures in both Texas and Washington, and now, the industry’s future may be at stake as lawmakers prepare to debate new rules and regulations surrounding the practice. Texas Attorney General Ken Paxton said Tuesday that daily fantasy sports are a form of  “illegal gambling” in his state, saying, “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.” But don’t worry just yet — this non-binding opinion doesn’t have a legal effect … for now.

Texas represents one of the largest states considering the legality of fantasy sports sites, and its ultimate decision could have major impacts on the multi-billion-dollar national enterprise.

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“Paid daily ‘fantasy sports’ operators claim they can legally operate as an unregulated house, but none of their arguments square with existing Texas law,” Paxton said in a statement regarding his decision. “These sites are also wrong in claiming an actual-contestant exception, which applies only to contestants in an actual skill or sporting event.” And because “Texas law only requires ‘partial chance’ for something to be gambling; it does not require that chance predominate,” fantasy sites are in even more of a legal conundrum in the Lone Star state.

Paxton joins the attorney generals of New York and Illinois in issuing an anti-fantasy opinion, and both Vermont and Maryland have also raised questions.

In Washington, however, things are a bit murkier. Three new bills will soon be debated in state legislature, and they appear to sit on opposite teams. One bill upholds the current law that makes playing fantasy football for money illegal, but then there’s another that seeks to legalize fantasy sports as games of skill. And finally, there’s a middle of the road suggestion that would allow for “season-long fantasy leagues with no more than 50 people and in which $50 is the highest allowable fee to play.”

Needless to say, the fate of fantasy football and other sports leagues is still very much under discussion, but major fantasy sites like DraftKings and FanDuel have made their positions clear in light of recent developments in Texas. “We strongly disagree with the attorney general’s prediction about what the courts may or may not do if ever presented with the issue of whether daily fantasy sports are legal under Texas law,” said Randy Mastro, a lawyer representing DraftKings. And, John S. Kiernan, a lawyer for FanDuel, noted, “Today’s advisory opinion by the attorney general of Texas is founded on a misinterpretation of the law and misunderstanding of the facts about fantasy sports. Fantasy sports has always been a legal contest of skill in Texas.”

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