HOUSTON – Texas law outlaws traditional sports betting, but loopholes in how some companies operate are giving Texans new ways to wager.
“It all started two years ago during the Super Bowl,” said Antonio Langer of Houston. “You know, everybody loves the Super Bowls, so I deposited a little bit of money and struck it big.”
Two main legal workarounds have emerged in the Texas betting landscape: prediction markets and daily fantasy sports (DFS).
Understanding the loopholes
There are two types of loopholes being explored here: prediction markets and daily fantasy sports, or DFS.
Prediction markets allow users to purchase “event contracts” — essentially yes-or-no bets on future outcomes in sports or politics.
These markets operate under federal commodities protection, which views the transactions more as investments than traditional wagers.
“I would relate it more to an options contract or a share of stock,” explained Jay Stewart, Managing Law Partner at Hance Scarborough.
Daily fantasy sports, offered by companies like FanDuel and DraftKings, represent the second gray area.
These platforms allow users to create short-term fantasy teams for money, with peer-to-peer matchups rather than betting against the house.
This structure helps them navigate federal gambling restrictions.
Marketing push despite legal questions
Despite the questionable legal status, betting companies are aggressively marketing their services in Texas.
“They got all these big commercials, you know, all the big celebrities. They got big billboards and posters as you’re driving up I-45,” Langer noted.
However, the legal standing of these activities remains uncertain.
“The Texas Attorney General opinion, standing opinion, is that they are illegal gambling,” Stewart said.
Despite this opinion, the state has not taken significant enforcement action against these operations.
Risky alternatives
Some Texans, like Langer, have turned to more questionable methods, using offshore betting apps and VPNs to mask their locations.
“Right now, somewhere in Canada,” Langer said when asked about his virtual location while placing bets.
These offshore operations come with significant risks.
Operators could refuse to pay out winnings or shut down operations entirely, leaving bettors with no legal recourse.
While traditional sports betting remains illegal in Texas — prohibiting moneyline bets, spread betting, and parlays — the current landscape shows how technology and legal interpretations are creating new avenues for gambling, even in states with strict betting prohibitions.
According to the Texas Sports Betting Alliance, many of the state’s major sports teams are behind the push to legalize sports gambling in Texas.
The Texas Attorney General’s office did not respond to requests for comment on the enforcement of gambling laws regarding these new betting methods.