FanDuel and Texas Attorney General Reach Settlement

Pursuant to a settlement reached on Friday, March 4, 2016, daily fantasy sports giant FanDuel will no longer be accepting paid entries in Texas starting in May. However, if a Texas judge eventually rules that paid fantasy sports are legal, or if Texas laws governing fantasy sports changes, FanDuel will be able to resume accepting paid entries.

In January, the Texas Attorney General’s Office released an opinion concluding that daily fantasy sports constitute gambling under Texas law. FanDuel considered bringing suit to have a court decide whether its fantasy sports contests are lawful, but instead reached a settlement. Under the agreement, FanDuel can continue to operate its free contests in Texas and will not pay any fines. However, starting in May, FanDuel agreed to stop accepting paid entries, and also agreed not to file a lawsuit.

The settlement also makes it clear that FanDuel disagrees with the AG’s findings. The settlement specifically states: “FanDuel believes the opinion contains an incorrect interpretation of Texas law, that the covered conduct is lawful and gives rise to no liability on its part, and that FanDuel has engaged in no misconduct.” According to FanDuel, the company has more than 20 bills in state legislatures across the country, and will be attempting to pass legislation in Texas.

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