Supporters begin effort to legalize fantasy sports in Texas

  1. AUSTIN (KXAN) — Thousands of Texans are breaking the law but they soon might be off the hook.

Many sports fans say playing daily fantasy sports is an increasing aspect of the games they love to watch. By paying a fee they have the possibility of winning big money if the players they pick perform well on game day.

In January 2016, Ken Paxton, the Texas Attorney General, was asked to weigh in on the major daily fantasy sports companies like FanDuel and Draftkings. Overnight he told an estimated 700,000 Texans they were breaking the law.  In the eyes of the State of Texas, daily fantasy sports was illegal gambling. But that could soon change.

When a game is on, Jeremy Rachel isn’t far away with his phone in hand. He’s played daily fantasy sports since college and pays around $25 to play.

“You sit around and enjoy all the games even more. Especially if you’re not really a big football fan, you can kind of get into it”, Rachel said. But FanDuel now shuts him out, saying paid games are banned in Texas. A hit from the living room to downtown Austin.

Now, Paul Osterberg and his two friends are trying to make DraftCrunch the next big tech startup. The company sells data daily fantasy players can use while picking their players.

“With the right research you can perform well and that research is where the strategy comes it,” Osterberg said. But since the AG opinion, outside investment has dried up.

“You have to have a thick skin because more than 90 percent of the doors are going to be shut in your face from the get-go,” Osterberg said. Now, this small business thinks of moving to California where gambling doesn’t have such a stigma. “We already do it,” he says “just like the stock market, what’s the difference?”

The State is taking that difference seriously; finding a settlement with FanDuel but returning to court in late October against Draftkings.

“I want to be fair to the process. Since we haven’t finished the opinion and we’re still drafting it I don’t want to comment exactly how I interpret that,” Paxton told us in January.

His office declined an interview to defend his opinion on camera for this story. Instead, he wants the nine-page document to speak for itself. In it, he writes that even if there is some skill in it necessary to win, Texas law only requires a partial chance for it to be a bet. He then goes on to cite factors fantasy sports players have no control over. A player may become injured before the game. Snow, rain, or other weather could be a factor and nobody controls that. One whistle from a referee can change who wins or loses.

Anyone playing daily fantasy sports could be charged with a class C misdemeanor.

Many disagree. Urged on by his constituents in Laredo, veteran lawmaker State Rep. Richard Pena Raymond, D- Laredo, will take action.

“You know this is one of those things that government shouldn’t be sticking their nose in,” Rep. Raymond told KXAN, “My friend Ken Paxton, the attorney general, said effectively that this would be illegal. I just think he’s wrong and I wanted to fix that.”

Raymond plans to file a bill to allow anyone over 18 to pay the fee to enter the games and win the prizes; legalizing paid games of daily fantasy sports. He says there’s too much skill involved for it to be against the law and now wants the paperwork to reflect reality.

“It is not like the roulette wheel that’s totally a game of chance. It’s more like chess. Ask anyone who’s every played chess and ask anyone who’s ever played fantasy football,” Raymond said. He admits it won’t be a priority for the 140-day legislative session but for the first time, there’s something on paper.

Illegal gambling is handled by county attorneys. Anyone playing daily fantasy sports could be charged with a class C misdemeanor. That does not come with jail time but it does come with a $500 fine. We reached out to local law enforcement in Travis, Williamson, and Hays counties. None of the agencies could tell us they have charged someone for playing daily fantasy sports.

Four million Texans play fantasy sports. 700,000 play daily fantasy sports, according to a newly formed group, the Texas Fantasy Sports Alliance. The Alliance has collected nearly 40-thousand messages from players. They hope to convince lawmakers to join ten other states and separate daily fantasy sports from illegal gambling.

When lawmakers go into session, spokesman Scott Dunaway says the Alliance plans to rally — urging lawmakers to act. Dunaway says, “Provide that clarity because right now a grey area has been created and it’s important for us to find out way through that grey area, to provide clarity and affirm fantasy sports here in Texas so we can enjoy them.” The Texas Fantasy Sports Alliance is a division of a national group called “Fantasy Sports For All”. FanDuel and DraftKings are both part of the Alliance.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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