Texas became the latest state to declare daily fantasy sports sites like FanDuel and DraftKings illegal on Tuesday. The Texas attorney general joins those of states like Illinois, New York and Nevada to question whether sports sites constitute illegal gambling.
Daily fantasy sports operators allow fans to create a fantasy team on a daily basis and win or lose money based on how their team performs that same day. While sites like FanDuel and DraftKings maintain that these games require skill, more and more state legislatures are arguing that the games are based at least partially on luck and thus are tantamount to illegal gambling under many state laws.
“Simply put, 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,” Texas Attorney General Ken Paxton said in a statement on Tuesday.
Mark Cuban, billionaire owner of the Dallas Mavericks and an investor in daily fantasy sports analytics site Fantasy Labs, criticized the Texas attorney general’s decision on Twitter. He said it did not reflect the views of Texans.
DraftKings released a statement Tuesday saying it would “continue to operate openly and transparently in Texas.” It went on to say the opinion “is predicated on a fundamental misunderstanding” of the contests.