Legislature should clarify the legality of fantasy sports

Legislature should clarify the legality of fantasy sports

Published in MyStatesman on April 3, 2017

By John Colyandro and Russell Withers – Special to the American-Statesman

On March 6, the seventh annual Wise County Hog Contest came to an end. After a month of hunting, 158 contestants eagerly awaited the final results to see how the $16,000 prize would be awarded. Each contestant paid a $100 entry fee and prizes were awarded to the three heaviest hogs shot and the pig with the longest cutters.

Buck Wheat of Olden shot the largest pig in the competition, a 298-pound bruiser, and was awarded $7,900. Hog contests take skill, are competitive, and are legal — and they have more in common with fantasy sports than you might think.

Last year, Texas Attorney General Ken Paxton issued a nonbinding opinion that, based on current law, the legality of fantasy sports in Texas is unclear. His opinion concluded that certain types of fantasy sports may amount to illegal gambling in Texas because winning them involves “an element of chance.” This action has spurred an important conversation still on the minds of 4.5 million Texans. Are fantasy sports legal in Texas? It is time for the Texas Legislature to answer that question during the 85th session.

Fantasy sports contests are games of skill in which participants play for free or pay a fee to assemble a fictional team of players. Those players compete against the fictional teams assembled by competitors. Some games are season-long. Others are daily. Based on the performance of those players that day, week, or season, the roster is awarded points. Earn more points than your opponent to win.

Is there an element of chance? Absolutely.

But winning fantasy sports requires knowledge of the rules, players, context and a host of additional considerations. There are no Las Vegas betting lines for fantasy teams because everyone’s team is different. Players are not attempting to pick the fastest horse or the right numbers in a lottery.

In fantasy sports, your chances of winning are increased based on your knowledge, research and strategy. Players often pay an entry fee and want to win a monetary prize — but the goal is always the same: Show your opponents that you know more than they do by winning.

The Texas Constitution prohibits gambling, yet it provides several exemptions to that prohibition, including bingo games, raffles and the state lottery, all of which are games of pure chance. There is no principled line to be drawn between permissible gambling and impermissible gambling either in the Texas Constitution or in statute.

Even prohibited gambling has so many exemptions that they swallow the rule. The definition of “bet,” for example, exempts “an offer of a prize, award, or compensation to the actual contestants in a bona fide contest for the determination of skill, speed, strength, or endurance.”

Another defense to prosecution for gambling exists when “except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants.” These exemptions would appear to apply to fantasy sports — and yet current public policy is entirely inconsistent on this point. Though the state of Texas allows people to gamble in games of pure chance, it currently prohibits many fantasy sports games that are based largely on skill and knowledge.

Though Paxton’s opinion was clear, the law is not. As the Texas Senate and House debate the issue in the coming weeks, they should make clear that fantasy sports games — season-long and daily games — are legal bona fide games of skill, just like fishing tournaments, a game of bridge or, yes, a hog contest.

Buck Wheat may be a great hog hunter, but Texas wants to know how his fantasy baseball team is shaping up.

Colyandro is executive director and Withers is general counsel of the Texas Conservative Coalition Research Institute, an Austin-based public policy organization.