Committee Hears Bill to Legalize Paid Online Fantasy Sports Sites

A bill exempting paid online fantasy sports sites from Texas anti-gambling laws has begun a potentially contentious journey through the Legislature.

Last year, state Attorney General Ken Paxton issued a non-binding opinion that paid online daily fantasy sports constituted gambling by offering chances to win money based on the performance of teams selected online.

"It's my duty as Attorney General to look to the law, as passed by the people's representatives, to answer the questions put to this office," Paxton wrote. "Paid daily 'fantasy sports' operators claim they can legally operate as an unregulated house, but none of their arguments square with existing Texas law. 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."

FanDuel, one major site offering such games, subsequently agreed to stop accepting paid entries for cash prizes in Texas.

A bill from State Rep. Richard Raymond, D-Laredo, seeks to legalize such sites as offering games of skill rather than chance – making them harder to classify as gambling.

It was heard Monday in a House committee. After the hearing, Raymond told NBC 5 the hearing went well, and the bill is now pending in front of the Licensing and Administrative procedures committee.

Raymond said he expects it to be voted out within the next few weeks, which would send the bill to the full House floor.

State Sen. Lois Kolkhorst, R-Brenham, has sponsored a similar bill in the Senate.

"Texans love sports and their freedom, which is why I filed Senate Bill 1970, so that we can ensure fantasy sports are legal in Texas," Kolkhorst said. "I am a longtime advocate for personal freedoms and limited government. We must protect our liberties and rights, and that includes our ability to play a game of skill that millions of Texans already enjoy. Fantasy sports add to the experience of watching your favorite team, and I'm excited to work with my fellow lawmakers and the sports fans all across Texas to pass this legislation."

Texas lawmakers have traditionally opposed any proposal that might be seen as gambling.

A representative from the Texas Fantasy Sports Alliance, of which FanDuel and DraftKings are both members, was at Monday's committee hearing.

Spokesperson Scott Dunaway tells NBC 5, "The Texas Fantasy Sports Alliance is working with fantasy players, stakeholders and elected officials to educate and confirm the legality of what many Texans already believe: fantasy sports are a game of skill and legal in our state. We are proud of the strong bipartisan support this issue has already received and look forward to working with our elected officials to move this legislation forward."

Copyright AP - Associated Press
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