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FanDuel Exits Texas, DraftKings Determined to Stay
By Brodey Sheppard - March 14, 2016
Daily fantasy sports (DFS) operator FanDuel has recently announced that it will cease operations in Texas, while rival DraftKings intends to challenge the state attorney general’s view that DFS is not legal under the state law.
Ken Paxton, attorney general of Texas, released a statement that his office worked out a deal that stops FanDuel from accepting real money players starting May 2 of this year. In exchange, the attorney general promised that it would not take legal action against FanDuel for any of its past DFS related activities.
Back in January, the attorney general’s office announced that it had determined DFS was in fact “prohibited gambling” within the state based on Texas law containing language that undercuts most pro-DFS arguments. State law bans betting on events that are determined either “solely or partially by chance”. According to the wording of the law, a skill-game exception only applies to the “actual contestants in a bona fide contest for the determination of skill.”
Losing the Texas following has become a big blow for FanDuel. Texas accounts for 8% of the total DFS player base in the U.S. DFS players can check out all the offers by visiting the FanDuel website.
Paxton is among a growing number of state attorney generals who have arrived at similar conclusions. Recently, the attorney general of the state of Georgia also announced the DFS was illegal under state law. However, neither of the two states have pursued criminal proceedings.
DraftKings, on the other hand, announced that it had filed a petition for a declamatory judgment in a Dallas County court. The DFS operator asked “to bring clarity to is legal situation”. Randy Mastro, attorney of DraftKings argued that DFS was “perfectly legal under Texas law.” Mastro also said that the company was looking forward to presenting evidence to support the case in court.
The fate of DFS has had both ups and downs recently. The question of whether or not fantasy sports is legal has been thrown around in states across the U.S. In Florida, an attempt to get a DFS bill approved before legislators went down to defeat. Last week, the legislators opted not to vote on the proposed gaming compact with the Seminole Tribe. Part of this legislative package included DFS. When Rep. Matt Gaetz attempted to attach DFS language to a different bill, he eventually withdrew his measure after receiving pushback from other legislators.
But there is good news for DFS in the state of Virginia. Virginia has become the first state in the entire U.S. to legalize DFS. This week, state governor Terry McAuliffe officially signed the Fantasy Contests Act which keeps DFS from being classified as gambling within the state.
In the state of Nevada, DFS operators continue to discuss the best of fantasy sports to the Nevada Gaming Committee in the hopes that the state can formulate a better plan for DFS.