Fantasy sports take on state lottery
February 2, 2016
Did you pick Cam Newton or Tom Brady to lead your team to victory, and you to the bank this week with your Fantasy Football winnings? Don’t worry about playing; it’s not illegal in Texas.
In Texas, sports fans can play all the fantasy sports they wish and not worry about any repercussions from the criminal courts.
On Jan. 19, Texas Attorney General Ken Paxton wrote an opinion, not any different than what I am doing in this piece. Nothing that I write will become law or change any law, the same as when Paxton wrote his opinion.
When Paxton replied to Representative Myra Crownover’s question on whether fantasy sports are legal or not in Texas, he concluded his nine-page opinion by saying:
“Under section 47.02 of the Penal Code, a person commits an offense if he or she 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. Because the outcome of games in daily fantasy sports leagues depends partially on chance, an individual’s payment of a fee to participate in such activities is a bet. Accordingly, a court would likely determine that participation in daily fantasy sports leagues is illegal gambling ‘under section 47.02 of the Penal Code.
Though participating in a traditional fantasy sports league is also illegal gambling under section 47.02, participants in such leagues may avail themselves of a statutory defense to prosecution under section 47.02(b) of the Penal Code when play is in a private place, no person receives any economic benefit other than personal winnings, and the risks of winning or losing are the same for all participants.”
Using the same penal code as Paxton, it appears to me that fantasy sports are not to be considered gambling, while the Texas Lottery and all games sold under the Texas Lottery are clearly forms of gambling.
Under section 47.04.A, a “Gambling Device” is any electronic, electromechanical or mechanical contrivance. That includes, but is not limited to, gambling device versions of bingo, keno, blackjack and notably, the lottery.
For example, Texas’ new $1 scratch off ticket “Wild1’s” has a run of 11,135,250 tickets printed. There is a total of $6,678,700 in total prizes awarded but only $5,614,415 in prizes when not counting break-even tickets.
Now, I am not against money going to schools, veterans and even the retailers who sell the tickets, but the $4,456,550 that the state is collecting is the “Rake” under the penal code.
A “Rake” is the percentage or fee taken from the bet and is not distributed to the winners, but instead kept for self gain.
To take it one step further, all locations that sell Texas Lottery should be considered “Gambling Places” under the law, and if you are caught in one, you could be punished with a fine and even jail time. Will that ever happen? No.
Video slot machines in Texas are illegal, as are the Game Rooms where people gather to play these games. One of the main reasons it’s illegal is that there is no accounting system in place to collect or record the amount of money that is taken in by the owners of these establishments.
Without accountability in place, the government cannot collect the proper amount of taxes.
The truth behind government agencies and Fantasy Sports is that the government wants more taxes than what are being paid in just income taxes on the 6-14 percent that companies like Draft Kings and Fanduel take on in the rake.
I believe that playing fantasy sports is more like playing in the stock market than gambling. Even if there is a risk of losing money in fantasy sports, you still pick your team (or stocks) with an educated guess, based on what players (or stocks) you think will perform well this week. The lottery is true gambling; you pick numbers and win by pure, dumb luck.