While gambling in Texas has always been a question sites like FanDuel and DraftKings have pushed the question of whether online gambling should be legal in all states. As states such as Tennessee and New Jersey have legalized the practice, they’ve created competition with other states who are missing out on the tax revenue (and business) from legalizing the practice.
Sports gambling remains strictly illegal in Texas. Recent pushes by lobbyists representing both gambling startups and professional sports organizations have pushed bills that would legalize the practice in Texas. Though ESPN introduced a Sports Betting Bill Tracker that shows Texas as “having a recent bill introduced”, that doesn’t give a perfectly clear representation of the likilihood of sports betting being legal in Texas.
Notable Exceptions to Texas Gambling Law
To avoid any confusion, when we talk about sports gambling we are not talking about practices that are excluded from the law such as bingo games done for charity, the state lotteries (that conveniently raise money for the state) and raffles that are done for charitable causes. These charity related giveaways require that one get the necessary license and come with certain requirements and caps as to how much money may be given away.
Why Is Sports Gambling Illegal?
A shrewd early user of the site noted we should indicate when the bill was last changed or note the most recent origins (in case they find a lawyer site that has not been updated accordingly). On May 14th of 2018, the Supreme Court (the United States Supreme Court) lifted the the federal ban on sports betting. This opened up states to put legislation through that would allow for online gambling in the state.
As New York recently passed a law, legalizing the practice in the state, they were careful to note that a transaction, even an online transaction, is a contract between two people and thus occurs at a specific location. Therefore recent laws have targeted whether a user in a specific area when they place the bet. This is why your DraftKings app might work in Tennessee but not, for example, Texas.
More specifically, Texas legislature only meets every two years unless there is a special session. Therefore this most recent session, 87(R) or the spring of 2021, was the first session where online gambling was in the spotlight. Bills were presented (see below) but unfortunately for many Texans, they failed to pass.
Are Fantasy Sports Legal In Texas?
When we talk about gambling we are generally differentiating from daily fantasy sports made famous by apps and websites such as Draft Kings and Fan Duel. It took some work to become legal, after House Bill 2303 attempted to make daily fantasy sports legal in Texas but the bill failed to make it out of the Senate Committee after passing the house. Essentially, daily fantasy sports were portrayed by DraftKings like apps as “legal gambling” because the court was yet to rule on their legality.
However, as of 2021, daily fantasy sports in Texas is legal. The only states where it is not legal is Arizona, Montana, Idaho, Washington, Hawaii, and (perhaps paradoxically) Nevada. The latter, Nevada, being a result of wanting to keep tax revenue from the practice in state.
Punishment For Online Gambling in Texas
The law governing the punishment for online gambling in Texas is among the most severe in the country. As stated by Penal Code 47.02. The good news is that the penalty is classified as a Class C misdemeanor. A penalty that should never result in jail time and carries with it a $500 dollar fine. The real issue with online gambling being illegal in the lone star state, deals with how hard it is to find an establishment to wager at.
Gambling Promotion Is Illegal In Texas
A person is considered to have broken the law if they’ve done any of the following acts (see the next three subsections).
This is from Sec. 47.02 of the official penal code.
Bets on a Game
A person 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.
Bets on Political Outcomes
A person makes a bet on the result of any political nomination, appointment, or election or on the degree of success of any nominee, appointee, or candidate. This is an attempt to avoid any rigging that might happen in an election.
Bets on Non-Skill Games
As numerous bills, including the one regarding daily fantasy sports, have attempted to reconcile, whether or not it’s a skill game or not is what makes it illegal. So it is illegal if one “plays and bets for money or other thing of value at any game played with cards, dice, balls, or any other gambling device.”
When You Won’t Be Prosecuted
Outside of the skill or luck question, it is unlikely that you will be prosecuted (or found guilty) if your situation fits any of the two criteria. Remember we’re still only talking about a Class C felony so try not to get too concerned.
The Wagering Took Place Privately
The Texas law really is trying to crack down on establishments more than individuals. Therefore if the wagering is in a private place, such as a residence, that is something the law demands the prosecution take into account. Again, this doesn’t mean it’s legal to wager in a private place, it just means the law will take this into account.
Outside of Winnings There Was No Economic Benefit
This stipulation is interesting as it attempts to further vilify sports gambling when kickbacks or corruption might be involved. Meanwhile it allows for a type of decriminilazation in other circumstances. Specifically, the law says “person received any economic benefit other than personal winnings” and “the risks of losing and the chances of winning were the same for all participants.”
When Will Sports Betting be Legal in Texas?
This past session, 87(R), seemed like the right time to legalize gambling in Texas with the full court press that daily fantasy applications have been applying to lobbyists in the state to push through the legislation. The special session taking place in the fall of 2021 is an option, but the most likely time the that sports betting will be legal in Texas is probably going to be 2023 when the Texas legislature meets again in a regular session.
The reasoning being that, by that time, the revenue potential of legalizing the practice will obvious by revenues reported by states where it is legal.
States Where Online Gambling Is Legal
Currently fully legal online gambling is only legal in a handful of states. We’ll update this page as the law changes (in Texas and elsewhere) but the following states allow fully legal online gambling:
- New Jersey
- West Virginia
Look for more from New York soon as lawmakers don’t seem to be too fond of neighboring New Jersey taking their tax revenue.
House Bill 2303 sought to make daily fantasy sports defined as a skill game and not solely as a game of chance which would in effect guarantee make it legal under law.
Recent bills have focused on legalizing gambling in certain areas of the state in order to make those areas more enticing as vacation spots. Additionally, other bills have sought to create a Texas Gaming Commission tasked with handling the seemingly inevitable legalization.
The Texas Gaming Commission: HB 770 and HJR 133
These were two bills aimed at a common goal of fostering the economic prosperity that could come with legalized sports gambling. HJR 133 sought to create a statewide gaming commission, while the other (HB 770) sought to see sports gaming legalized. The taxable revenues would go to education and public safety. However both bills failed to make it out of the house with neither surviving the relevant committee.