Texas Opinion Leads FantasyDraft to Leave the State, Others to Come?

texas

FantasyDraft, the fourth largest daily fantasy sports site in the country has decided to leave the state of Texas, two weeks after the attorney general in the state gave an opinion that daily fantasy sports is illegal under state law. Hawaii is also been added to the restricted list at FantasyDraft as the Hawaii Attorney General has asked DFS sites to leave the state last week.

At the time of this writing, other daily fantasy sports sites including DraftKings and FanDuel have not yet left Hawaii or Texas.

FantasyDraft says that the situation in Texas will be closely monitored. The legality of daily fantasy sports in certain states is a fluid situation. A notable example is FanDuel’s reentry into the New York market a few months after initially leaving.

FantasyDraft asks that players sign a petition to help get involved in the regulation of daily fantasy sports in the United States.

Catalyst for FantasyDraft Departure in Texas

In mid January, Texas Attorney General gave an opinion that daily fantasy sports constituted “illegal gambling” under Texas law. He cited the two largest DFS sites — DraftKings and FanDuel as “clearly” taking illegal bets under the law.

The state prohibits any type of wagers that are determined by a result or performance in a sporting event. In a statement Attorney General Ken Paxton indicated the law was clear. “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”

Excerpt of FantasyDraft Texas Email

As a result of the Texas Attorney General’s recent statement and subsequent request by our payment processor, for the time being we will no longer accept deposits or offer contests awarding prizes in the state of Texas…..

If you have entries in contests that have not yet started, we will be canceling these entries and refunding entry fees to your account today. your account will remain open and you may withdraw your balance at any time. You may also still play in free entry contests that do not award prizes.

We will continue to closely monitor the situation in Texas and hope to be able to revisit this action in the future.

Other DFS Sites Leaving States

Although additional states have given unfavorable views of the industry over recent weeks, there hasn’t been a lot of movement from daily fantasy sports sites leaving states over the last few months.

FantasyDraft, which left Texas and Hawaii over the last few days, also reportedly left Vermont last week. Vermont and Hawaii are two states that have occasionally appeared on other DFS sites’ restricted lists.

StarFantasyLeagues also quietly left Vermont and Mississippi over the last few months when they restricted players from 13 states. StarFantasyLeagues now restricts more sites than they allow.