DALLAS (CN) – Billionaire Mark Cuban came to the defense of paid daily fantasy sports websites one day after Texas Attorney General Ken Paxton concluded they are illegal, by comparing them to investing in the stock market.
The Dallas Mavericks owner and daily fantasy sports investor gave the keynote address to several hundred attendees at the Fantasy Sports Trade Association conference in downtown Dallas on Wednesday. Cuban said he was “disappointed” at Paxton’s nonbinding advisory opinion that was released on Tuesday.
Paxton said the bets made on daily fantasy sports website are illegal under state law because of the cut the house receives. His nine-page opinion stated fantasy sports website operators are incorrectly claiming the actual-contestant exception, which he said only applies to contestants in an actual skill or sporting event.
Cuban disagreed, saying daily fantasy sports “is a game of skill” and not gambling.
“I can walk into any poker room in the world against the best poker players and if I pull a straight flush, as long as I know what a straight flush is, I am going to win,” he said. “That does not happen in daily fantasy sports. You have to be smart, you have to put in the time.”
Cuban compared daily fantasy sports to stock investing, saying “there is a lot more luck involved” in stocks.
“Why is the stock market acting like it is? Nobody knows,” he said. “Where should you invest your money in the stock market? I have talked to some of the smartest people and nobody knows. That sounds like a game of chance to me.”
Cuban took solace that Paxton’s ruling “was only an opinion” and said he was told “there are no plans initially to file any lawsuits” over the dispute.
“It is just a way of coming out and kind of hedging,” Cuban said. “So I’ll give our guy Ken Paxton some credit. He is playing politics without playing politics.”
Cuban noted Paxton’s ongoing legal troubles – he was indicted last year on two first-degree felony counts of securities fraud and a third-degree felony count of failing to register with the Texas State Securities Board.
“This is a guy who personally [is going] through some security regulations himself, so he knows what it’s like to be a target,” Cuban said.
Paxton’s opinion came one month after Illinois Attorney General Lisa Madigan concluded paid daily fantasy sports betting is illegal in her state as well. Operator DraftKings sued her office within days in Cook County Chancery Court, seeking declaratory judgment for violation of its due process rights.
FanDuel and Head2Head filed a similar lawsuit in Sangamon County Chancery Court shortly thereafter.
Paxton’s and Madigan’s decisions follow New York Attorney General Eric Schneiderman’s cease-and-desist letter to FanDuel and DraftKings, warning them to stop operating in his state. Schneiderman persuaded a Manhattan Supreme Court judge to bar both websites from taking bets in the state last month, but allowed them to appeal his injunction before it takes effect.
Cuban brushed aside the attacks on the industry, saying he invested in daily fantasy sports because it is “in a great position” and that he thinks “gambling as a whole will be made legal.”
“Hypocrisy tends to figure itself out,” he said. “I think there is a whole lot of upside to this industry. While this is a stepping stone that we have to step over and on and across, I think it’s going to happen and it will create a foundation that makes fantasy sports – in particular daily fantasy sports – much stronger.”
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