Texas Attorney General Ken Paxton issued an opinion today that daily fantasy sports constitutes illegal gambling under Texas law. “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,” he 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.”
The situation isn’t quite as bad for daily fantasy operators in Texas as it is in other states that have banned the games. According to the foremost expert on daily fantasy law, unlike the attorneys general of New York and Illinois, Paxton did not threaten to prosecute daily fantasy operators. Rather, he laid out how a Texas court would likely rule if confronted, and opened the door to a flood of class action lawsuits in Texas, in addition to the 60 (at least) that have already been filed against daily fantasy operators.
By this point, however, that distinction doesn’t really matter. Daily fantasy is now outright illegal or has been declared illegal in states where about a quarter of the country lives, including three of the five most populous states (Texas, New York, Illinois). The writing is on the wall.