On January 19, 2016, the Texas AG issued an opinion that paid Daily Fantasy Sports (DFS) are illegal under Texas law, but noted that “traditional” fantasy sports leagues are, as a general rule, legal under Texas law. In so opining, the AG referenced Texas gambling laws (chapter 47) which state, in part: In Texas, a person commits a criminal offense if the person “makes a bet on the partial or final result of a game or contest or on the performance of a participant in a game or contest.”

Unlike some other states’ laws, Texas law does not require that skill predominate. Instead, chapter 47 requires only a partial chance for there to be a bet. The opinion also disagreed with the notion that in DFS there is no “bet.” Texas law excludes from the definition of bet “an offer of a prize, award, or compensation to the actual contestants in a bona fide contest for the determination of skill.” Citing prior precedent, the AG stated: the exclusion may embrace athletes actually competing in the sporting events, but it does not embrace those who pay entry fees for a chance to win a prize from forecasting the outcome of the events.

Additionally, the opinion noted that the other types of contests in the actual-contestant exclusion (speed, strength, or endurance or to the owners of animals, vehicles, watercraft, or aircraft) inform the nature of what the Legislature means with the term “skill,” concluding that this actual-contestant exclusion does not apply to participants of daily fantasy sports leagues.