FanDuel Inc. agreed to stop offering paid games in Texas in May to avoid being sued by Attorney General Ken Paxton, who determined this year that online daily fantasy sports contests for money are illegal in the second most- populous U.S. state.
Contests that have some element of chance are deemed gambling, and as such are prohibited, under Texas law, according to Paxton. Other states require that chance be the dominating factor in a game. FanDuel has already blocked players from entering paid contests in eight other states.
Daily fantasy sports came under increased scrutiny from regulators over the past year amidst a flurry of advertising that made commercials nearly ubiquitous during the National Football League season.
"This will spare both the company and the taxpayers of Texas the expense of an extensive lawsuit that I believe would only affirm what my office has already determined," Paxton said in a statement Friday.
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