Legal Sports Report

Texas Daily Fantasy Sports

Texas has been one of the biggest legal battlegrounds for the daily fantasy sports industry in the past year.

Is it legal to play DFS for real money in Texas? There appears to be no problem for DFS players who want to take part in DFS contests in the state.

Is it legal for DFS operators to take customers in Texas? That’s a complicated question, but several sites do still accept players in the state.

For a snapshot of which DFS sites allow players from which states, click here.

Daily fantasy sites for Texas players

DraftKings Texas

DraftKings is the largest daily fantasy site that still accepts players from Texas for real-money contests.

DraftKings is challenging the opinion issued by the Texas attorney general that DFS is illegal gambling under state law. It still accepts Texas residents for real-money contests, as of the start of NFL season.

While a court case is pending, DraftKings has continued to take customers in the state.

FanDuel Texas

FanDuel does not currently serve the Texas market with real-money DFS contests. Players in Texas can still play DFS contests with no entry fees.

FanDuel entered into a settlement with the Texas AG early in 2016 to avoid any possible legal issues down the road.

FanDuel appears unlikely to return to the Texas market unless the legislature passes a new law in 2017 expressly legalizing DFS.

Yahoo Texas and other DFS sites

Yahoo is the third largest DFS operator, and it also takes customers for real-money play in the state.

FantasyDraft is among the other operators that also accept Texas residents.

History of daily fantasy sports in Texas

Before 2016, almost all DFS operators allowed users to play for real money at their sites.

That all changed in January, when Attorney General Ken Paxton issued an opinion that said, in part:

Under section 47.02 of the Penal Code, a person commits an offense if he or she makes a bet on the partial or final result of a game or contest or on the performance of a participant in a game or contest. Because the outcome of games in daily fantasy sports leagues depends partially on chance, an individual’s payment of a fee to participate in such activities is a bet. Accordingly, a court would likely determine that participation in daily fantasy sports leagues is illegal gambling ‘under section 47.02 of the Penal Code.

While DraftKings and FanDuel initially released statements saying they disagreed with that opinion, things were quiet in the short term. Then came the revelation in March that FanDuel had been working on a settlement with Paxton; DraftKings, decided to go its own way and fight the opinion in court.

Nothing has changed in the interim.

An attempt to legalize DFS with a new law was not enacted in 2017. The next time the legislature could act would be in 2019.

Is daily fantasy sports legal in Texas?

That depends on whom you ask. According to the Texas AG and some experts specializing in gambling law, it is illegal to offer. Lawyers for the DFS sites would beg to differ.

So far, there has been no momentum from any state — Texas included — seeking to take any type of action against people who are playing DFS. The concern would be for the operators running DFS contests, generally not for players.

Only one state has actually sought to take action against DFS operators, to date — New York. And that state eventually legalized DFS contests in the summer of 2016.