Draftkings recently sued Texas Attorney General Ken Paxton, seeking to stop him “from further acting to eliminate daily fantasy sports contests (DFS) enjoyed by hundreds of thousands of Texans for the past decade.”
Paxton released an advisory opinion on Jan. 19 essentially stating fantasy sport gambling is illegal under Texas law.
According to 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.
On March 4, DraftKings filed a petition against Paxton in Dallas County District Court, seeking declaratory judgment that DFS contests are legal under Texas law.
“This relief is necessary to prevent immediate and irreparable harm to DraftKings, which otherwise could be forced out of business in Texas—one of its three largest state markets—and irrevocably damaged nationwide,” the suit states.
“This Court need look no further than to the Attorney General’s orchestration of DraftKings’ competitor FanDuel Inc.’s (“FanDuel”) effective departure from the State of Texas to recognize that the Attorney General’s actions pose direct, immediate, and particularized harm to DraftKings.”
The Texas Attorney General’s Office announced on March 4 that it had reached a settlement with FanDuel.
In addition to the declaratory judgment, DraftKings requests an order:
• Declaring that DraftKings’ DFS contestants are “contestants in a bona fide contest for the determination of skill” for which a prize or award is offered, and thus do not make a “bet” under Texas law;
• Declaring that DraftKings’ DFS contestants do not commit an offense because, rather than making a bet on the outcome of “a game or contest,” the outcome of DraftKings’ DFS contests depends on a series of complex interconnected performance metrics from a host of athletes; and
• Declaring that no governmental entity may use or rely on the Attorney General’s opinion regarding DFS in any criminal prosecution, civil statutory suit, common-law suit, or any other interference or related legal action against DraftKings or its operations.
DraftKings further requests the award of its costs in the action, including
attorney’s fees.
DraftKings is represented by Robert Walters, attorney for the Dallas law firm Gibson, Dunn & Crutcher.
Case No. DC-16-02593