TXAG Paxton Challenges DraftKings’s Lawsuit and Venue

AUSTIN–Texas Attorney General Ken Paxton  filed a response yesterday to DraftKings’s lawsuit that seeks to test the legality of paid daily fantasy sports in Texas. The attorney general’s filing contends that DraftKings’s lawsuit, filed in Dallas County civil court, improperly challenges the attorney general’s opinion issued in response to a legislative inquiry regarding the legality of online gaming.

Furthermore, the attorney general’s motion asks the court to dismiss this case for lack of jurisdiction or determine Travis County as a proper venue.

In January, Attorney General Ken Paxton issued an opinion indicating that “odds are favorable that a court would conclude that participation in paid daily fantasy sports leagues constitutes illegal gambling, but that participation in traditional fantasy sport leagues” where the house does not take a cut is not illegal gambling.

Unlike some other states, Texas law only requires “partial chance” for something to be gambling; it does not require that chance predominate. Traditional fantasy sports leagues that are not operated by a third party for revenue are, as a general rule, legal under Texas law. In those leagues, participants generally split any pot amongst themselves, so there is no house that takes a cut.

Beginning May 2, FanDuel has stopped taking paid bets in Texas pursuant to a voluntary agreement with the Office of the Attorney General.

To view yesterday’s filing click here: https://www.texasattorneygeneral.gov/files/epress/files/20160502_D_s_MTV_Answer_PTJ.PDF

To view legal opinion issued by Texas AG click here: http://media.oag.state.tx.us/mediaroom/2016/pdf/kp0057.pdf