Proposed Texas Bill Would Legalize DFS

Published by Chris Lollis on August 9, 2021

In 2018, the federal government overturned the Professional and Amateur Sports Protection Act of 1992, which banned sports gambling across the US. Since then, states have had the opportunity to classify their own laws regarding sports betting -- including daily fantasy sports.

While many states have already legalized and regulated daily fantasy sports, there are still a few that have yet to pass anything through the House or Senate -- Texas being one of them. In 2021, there’s a chance that changes with the introduction of HB 393, proposed by Rep. Joe Moody.

The bill would classify daily fantasy sports as a game of ‘skill,’ opposed to a game of ‘chance.’ This would effectively make daily fantasy sports legal in the state of Texas, which has spurred a lot of controversy between the Attorney General, government officials, and DFS operators.

So, are daily fantasy sports legal in Texas?

The answer to that question largely depends on who you ask. In 2016, Texas Attorney General Ken Paxton stated that he believed daily fantasy sports are illegal under Tex. Pen. Code § 47.02. Here’s how explained his opinion and stance on daily fantasy sports in the state of Texas:

“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.”

This opinion sparked a lot of controversy, especially since DFS operators such as DraftKings and FanDuel were already accepting entries in the state. With the opinion out in the open, FanDuel decided to end their operations in Texas, while DraftKings decided to fight the opinion.

It didn’t take long for FanDuel to join DraftKings in their fight against Paxton, which is currently ongoing. Both operators continue to accept entries, especially since there’s still no defining law that states whether or not daily fantasy sports are legal or illegal in the state of Texas.

To recap, Texas residents can enter daily fantasy sports contests without being prosecuted, despite the attorney general having an opinion that states otherwise. Since the penal code doesn’t provide a clear answer to the million dollar question, they can’t really prosecute anyone.

Can HB 393 Save the Day?

The HB 393 bill that was proposed by Representative Joe Moody would put to rest the overwhelming debate regarding daily fantasy sports in Texas. The Attorney General’s opinion classifies daily fantasy sports as games of chance, which is where his opinion stems from.

Since HB 393 would officially classify daily fantasy sports as games of skill, it would deem the Attorney General’s opinion as invalid. As a result, daily fantasy sports would be 100% legal under Texas law. Participants and operators alike wouldn’t have to wonder about the legality.

One important thing to note about HB 393 is the lack of plans to regulate or tax daily fantasy sports. While the state wouldn’t be gaining any revenue from a decision on the matter, it would put to rest the long-running question as to whether daily fantasy sports is allowed in the state.

Of course, this isn’t the first time state representatives have tried to pass a bill like this. In fact, Moody and others sponsored a similar bill in 2019 -- HB 2303. Although that bill passed in the House of Representatives with a vote of 116-26, it never passed in the Senate and died out.

Still, Joe Moody is devoted to getting the bill passed sooner or later. He feels the bill is necessary, especially since DFS players can potentially get in a lot of trouble if things were to go sour regarding the legality of daily fantasy sports.

Moody stated, “As a former prosecutor and understanding that discretion lies with a couple hundred prosecutors across the state, it doesn’t take but one person who thinks this is wrong to ring up a whole bunch of people.”

Many Questions Remain in Texas

Before a bill can be passed, it’s clear that Texas representatives have a lot to figure out. It’s not as simple as classifying daily fantasy sports as legal. In addition to that, there are plenty of questions that must be answered before a decision can be made on the legality of the issue.

Here are some of those questions and concerns:

  • How does the state define daily fantasy sports?
  • Are daily fantasy sports a game of chance or skill?
  • Should the state charge DFS operators a license fee?
  • What type of public disclosures should be required by operators?
  • Can professional sports teams own shares of a fantasy sports operator?
  • How will the state address gambling addiction?
  • What would the minimum age be for entering a daily fantasy sports contest?
  • How will the state ensure DFS operators don’t default on prize payouts?

If state representatives can come to an agreement on the questions listed above, then there’s certainly a path for legalizing daily fantasy sports. Of course, this would be the first step in eventually legalizing sports betting all together -- which is currently deemed illegal in Texas.

What Can Texas Residents Do In the Meantime?

For now, Texas residents are open to enter contests offered by both FanDuel and DraftKings -- as well as several other daily fantasy sports operators. Until a decision is made, the government can’t really stop anyone from playing or winning in a DFS contest -- which is good news.

With that said, sports betting isn’t allowed and anything outside of daily fantasy sports is considered illegal. While legalizing daily fantasy sports is on the horizon, residents will likely have to wait another couple years before sports betting starts to gain momentum in the state.

If you’re new to daily fantasy sports and haven’t signed up with DraftKings or FanDuel, now’s the perfect time to do so. The two sites are known for having lucrative and generous welcome bonuses to new customers, giving you all the incentive in the world to join and start winning.

Chris Lollis

Chris has a background in DFS that spans nearly a decade. He launched his first DFS website in 2012 and has been sharing winners ever since. Find him on Twitter at @_Chris_Lollis.

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