Texas betting options are limited amid a general aversion to most things gambling across the state. Daily fantasy sports and parimutuel horse racing betting serve as the only forms of wagering that are tolerated in the state.
The legality of daily fantasy sports is uncertain at the moment, but most major DFS operators are active in Texas. Parimutuel horse racing betting is legal but only at licensed racetracks. Online horse racing betting is restricted by state law.
The odds of Texas legalizing sports betting are not good over the near term. Unless and until that changes, daily fantasy sports remain the closest alternative for Texans.
Legal Betting Sites in Texas
Texas Sports Betting
Sports betting is illegal in Texas and there have been no major pushes to change that since the Supreme Court overturned the federal sports betting prohibition in 2018.
There are some lawmakers in Texas who would like to legalize sports betting, but they face an uphill battle amid resistance from their anti-gambling colleagues and the lack of an established gambling industry. Passing a bill would essentially require lawmakers to implement a regulatory framework from scratch.
Additionally, legalizing sports betting in Texas would likely require a constitutional amendment. That in turn would require submitting the issue to a statewide referendum and receiving the approval of a majority of voters.
The last effort to legalize sports betting occurred in 2019 with the introduction of HB 1275 by Sen. Eddie Lucio.
HB 1275 and an accompanying joint resolution called for a statewide referendum that would amend the Texas Constitution to give the legislature authority to legalize spots betting. Had it passed and received the approval of voters, HB 1275 would have authorized retail sportsbooks and mobile betting with a tax rate of 6.25% on handle.
The bill failed to advance and died without action. Since then, Texas has seen no other efforts to authorize sports betting.
The lack of political will remains one of the biggest challenges in Texas today. Lawmakers who support legalizing sports betting face significant opposition from the Texas GOP itself, which opposes all gambling expansions. Item 153 from the Texas GOP platform states plainly:
153. Gambling: We oppose the expansion of legalized gambling.
Despite the challenges, Texas remains a prime target for the sports betting industry with numerous pro sports teams, a massive fan base and a population of approximately 30 million.
The American Sports Betting Coalition has estimated that legalization could add $1.7 billion to the annual economy and create more than 9,300 jobs. Opponents believe the social and financial costs associated with expanded gambling would outweigh any economic benefits.
Daily Fantasy Sports in TX
The legal status of daily fantasy sports is unclear at the moment due to a lack of laws addressing the issue head-on. In 2016, Texas Attorney General Ken Paxton issued a nonbinding opinion stating that fantasy sports contests meet the state’s definition of illegal gambling.
The attorney general made no indication that the state would begin pressing charges against fantasy sites, but it was enough to convince FanDuel to exit the Texas market. DraftKings decided to stay and fight the case in court and remains available to Texans today.
FanDuel opened its doors to Texans once again in August of 2018, more than two years after exiting the state. FanDuel did not immediately state its reasons for entering the market, but the fact that DraftKings continued operating for a full two years in Texas probably played at least a minor role in the decision.
Numerous attempts to legalize fantasy sports sites have been made in Texas since then. One attempt in 2017 consisted of a group of complementary bills in the House in February 2017 and a companion bill introduced in the Senate the following month.
At just six pages in length, this was one of the most efficient pieces of fantasy-related legislation ever introduced anywhere. Despite its succinctness, the bill somehow managed to classify fantasy sports as a game of skill, introduce regulations to oversee the industry and establish a licensing regime that would require fantasy sites to pay an annual registration fee of $5,000.
Those bills failed to advance beyond a couple of committee hearings and died without further action in the Calendars Committee. Texas fantasy sports remains a legal grey area to this day with FanDuel and DraftKings both active in the state despite the questionable legal environment.
A bill introduced in 2019 sought once again to classify fantasy sports as contests of skill rather than gambling. The bill made it through the House but died in committee in the Senate. No efforts to legalize fantasy sports in Texas have materialized since.
Online Horse Racing Betting in Texas
Online horse racing betting is prohibited in Texas. Locals can bet on live horse races in-person at any of the state’s authorized racetracks, which also offer simulcasting for betting on races held elsewhere.
Texas racetracks have experienced a significant decline since the year 2000. The state’s remaining tracks struggle to keep up attendance or provide significant purses for racing teams. State lawmakers compounded the problem in 2011 by amending the Texas Racing Act to prohibit advance deposit wagering (taking bets online).
Prior to the law coming into effect, customers inside Texas and around the country could use betting websites such as BetAmerica and TwinSpires to place wagers on races hosted at Texas racetracks. Those wagers were comingled with wagers that were placed in person, thereby increasing the betting pool and building larger purses.
The 2011 amendment put an end to that for reasons unclear to this day. Article 11 of the racing act now includes the following text:
“The commission shall adopt rules to regulate wagering on greyhound races and horse races under the system known as pari-mutuel wagering. Wagering may be conducted only by an association within its enclosure. A person may not accept, in person, by telephone, or over the Internet, a wager for a horse race or greyhound race conducted inside or outside this state from a person in this state unless the wager is authorized under this Act.”
TwinSpires.com continued accepting wagers from residents of Texas until it was issued a subpoena in 2012. TwinSpires initiated a lawsuit on the basis that the amendment violated the Commerce Clause of the US Constitution. The lawsuit was dismissed and TwinSpires stopped accepting wagers from Texans in 2013. Today there are no legal options for betting on horses or greyhounds in the state.
Effort to Legalize Advance Deposit Wagering
A new effort to legalize online racing betting in Texas emerged in 2017 with the introduction of HB 3926. This bill was introduced on March 10th of 2017 and it sought to amend the Texas Racing Act to allow Texans to bet on greyhound and horse races that take place inside and outside of Texas via legal betting sites.
This bill appeared to have a decent chance of success for two primary reasons. First, the bill was driven by motivations to fund popular items in Texas – the text of the bill explains that one of its primary purposes was to raise money to provide better body armor for Texas law enforcement officers. Additionally, the bill sought to raise money for charity, with players maybe even being given the option to choose which charities they wish to support as they play.
Secondly, the bill had the support of the horse racing industry in Texas. In a quote provided to Bloodhorse.com, the executive director of the Texas Thoroughbred Association offered his support of the bill and said that it has the potential to raise significant money for horse racing purses.
That bill died in committee with the last action happening way back in April of 2017. Since then, no other serious measures to legalize sports betting in Texas have emerged.
There are three dedicated racetracks and one county fair that host parimutuel horse wagering:
A fourth racetrack with live racing and simulcasting is in progress as well after Jefferson County voters approved a racetrack in East Texas. In November 2020, Jefferson County Commissioners approved the Port Arthur Renaissance Group to purchase the Ford Park Entertainment Complex, clearing the way for the construction of a racetrack and hotel.
Online gambling is prohibited in Texas under state law. Under TX Penal Code § 47.01-47.11, it is a Class C misdemeanor for anyone who:
(1) 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;
(2) 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; or
(3) plays and bets for money or other thing of value at any game played with cards, dice, balls, or any other gambling device.
Class C misdemeanors in Texas are punishable by a fine not more than $500.
However, exceptions to the law are provided for gambling activities that occur in a private place, all players compete on equal ground and that no one receives any economic benefit other than personal winnings.
Texas also considers it a Class A misdemeanor to be involved in the “promotion of gambling.” This would include operating a gambling location where a profit is taken by the house, engaging in bookmaking or selling tickets to unlicensed lotteries. Class A misdemeanors are punishable by a fine not exceeding $4,000 and a stint in jail not exceeding one year.
Until state law changes, online casinos and poker sites will remain prohibited in Texas. The law could also be potentially applied to individuals who participate in illegal online gambling as players, although authorities are not known to pursue such cases.