Fantasy sports convention gets cold welcome in Texas

DALLAS (KXAN) —  For years, the Fantasy Sports Trade Association Convention was held in Las Vegas. But when the state of Nevada started requiring daily fantasy sports organizations to obtain licenses to fit within the definition of legal gambling, the FSTA decided to move the convention to friendlier confines.

This week, they pulled a record crowd in Dallas, but were also received with an icy welcome.

An estimated 4 million Texans participate in daily fantasy sports.

“We thought Texas would be very friendly,” said FSTA chairman Peter Schoenke. “The governor was friendly, local lawmakers were friendly, a lot of companies work here. But unfortunately the attorney general had a different opinion.”

The two-day convention began Tuesday night, the same day Attorney General Ken Paxton offered his opinion that daily fantasy sports fit the elements of illegal gambling per Texas law. The opinion cast a bit of a shadow over the convention according to Schoenke.

“Suddenly, that is the talk of the convention and it is unfortunate,” Schoenke said. “There is definitely a little apprehension about where the industry will go.”

It is a budding industry, but one that is not necessarily new. Schoenke said there are over 300 companies at the convention and some have been online in the industry for 20 years. A recent explosion in popularity has been hard to ignore, even for state lawmakers. An estimated 4 million Texans participate in daily fantasy sports.

A money mill even Dallas Mavericks owner Mark Cuban recognized as he spoke at the convention Wednesday.

“The end game is how the state can make money off this. And I think everyone is fine with that as long as it is reasonable,” said Cuban who reminded everyone Paxton’s ruling was an opinion and not a lawsuit.

One of the companies in attendance is Austin based FantasyHub and the CEO Andrew Busa. He and others in the industry have spent time trying to fit their businesses within a law, which is open to interpretation and has led to many comparisons.

“If you go to a fishing tournament, just because fish are jumping on the hooks doesn’t make them contestants,” said Busa.

Texas gambling laws have language that differentiate between a game of chance, such as slot machines, and games requiring skill.

“The contest of daily fantasy sports is truly a game of skill,” said Busa.

This legal fight is not unique to Texas. Daily fantasy sports are battling gambling laws in several states across the country and Schoenke urged convention attendees to contact their state representatives.

“Our message to legislatures is let’s work together and make this a safe hobby.”

Prosecuting players?

Meanwhile, if daily fantasy sports players are indeed breaking the law, Travis County prosecutors want to find the best way to enforce it. Travis County District Attorney Rosemary Lehmberg and County Attorney David Escamilla have had conversations about fantasy sports, but do not have any intentions of targeting individuals right away. Lehmberg told KXAN a possible civil case from the AG could affect their approach and they want to have discussions with other prosecutors from around the state about the need for a coordinated effort. She said they also will consider the idea of a legislative fix being the best solution.

Most illegal gambling offenses are Class A or Class C misdemeanors and prosecution is handled by the county attorney. Felony cases would be prosecuted by the DA office.

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