Texas Legislators Begin Work on DFS Legislation

by Kyle Miller

TexasThree bills have been introduced in Texas to legalize daily fantasy sports contests.

For the past two years now, the subject of online gambling has shifted some to focus more on daily fantasy sports instead of the traditional casino or poker gaming. Many states across the US have begun to take a look at the industry to see how they can benefit financially. For many years, daily fantasy sports was allowed to operate without regulations in place. However, now, it seems more states are creating legislation to regulate as well as legalize the activity.

Texas on Board

The latest state to introduce legislation in regards to daily fantasy sports contest is Texas. Since last year, we have known that legislation was coming due to an announcement by Representative Richard Peña Raymond. Now it seems that not one but three bills have been proposed in the state to work on legalizing and regulating daily fantasy sports. H 1457, H1422 and H1418 all involve DFS in the state.

With HB 1457, the bill was created to clarify the law, which Raymond called confusing and ambiguous, to help affirm that fantasy sports are legal in the state. In a quote from Texas Fantasy Sport Alliance, Raymond stated that the government should not limit the freedom of residents to participate in such gaming contests, those of which are clearly not a game of chance but one of skill.

The legislation is sponsored by four other representatives including John Kuempel, Rodney Anderson, James White and Abel Herrero. Kuempel stated that he is proud to support such legislation that will protect the right of Texas natives to participate in fantasy sports contests which also preventing unnecessary government involvement in the personal lives and pocketbooks of residents.

2017 Marks the Beginning of Consideration

The state was unable to consider daily fantasy sports regulation last year as the session was not in but now the state house will be able to move forward for 2017. Those who enjoy daily fantasy sports contests have found that such legislation is imperative if they want to continue to enjoy such operator’s offerings as FanDuel or DraftKings. In early 2016, Ken Paxton, the Attorney General of Texas, ruled that DFS was an illegal gambling activity based on state law.

Because of this ruling, FanDuel exited the state and DraftKings filed a case against the AG. DraftKings continues to operate despite the ruling by Paxton. Texas is now one of several states that is considering daily fantasy sports legislation with eight states having legalized the activity last year. Gaming activity in the state is few and far between presently, as only the lottery, pari-mutuel wagering and one tribal casino can be found in the state.

The bills that have been proposed cover several key factors including defining the daily fantasy sports contests as games of skill. This definition would set the activity apart from gambling. Consumer protections would be put in place to ensure players funds as well as personal information is secure. Such protections include banning employees from taking part in gaming as well as setting an age limit of 18 years of age or older.

The Attorney General’s office would be responsible for taking legal action against DFS operators while oversight and regulation power would be given to the Secretary of State. Sites that offer daily fantasy sports contests will have to register and pay a fee of $5,000 annually to stay in good standing.

Two of the proposed bills include information that would see operators separate player funds from the business funds. This is an imperative factor that many state have been considering, including being implemented in New York, to ensure that players are protected.