Mark Cuban: Markets resemble 'game of chance'

Rocky stock markets currently resemble a "game of chance" as "nobody knows" where they will go from here, billionaire investor Mark Cuban said Wednesday.

"Gaming in the stock market is gambling 101 right now because you have no clue what's going to happen," he said at the Fantasy Sports Trade Association conference in Dallas.

Major averages traded sharply lower Wednesday, with the Dow Jones industrial average plunging more than 500 points, amid steep declines in oil.

The brash Dallas Mavericks owner contrasted stocks to the embattled daily fantasy sports industry a day after the Texas attorney general argued that the games would likely be considered illegal gambling under state law. Questions swirl about the paid contests' legality nationwide, partially stemming from whether they take skill or rely on chance.

Mark Cuban
Melody Hahm | CNBC
Mark Cuban

Daily fantasy sports operators could ultimately benefit from regulation, Cuban said. He stressed that he did not believe daily fantasy qualified as gambling, adding that he sees "a lot of upside" for the industry even if it faces more oversight.

"There's going to have to be some regulation. That's not fun, but it'll make your lives easier," he told the industry players gathered in Texas.

Texas Attorney General Ken Paxton's opinion marked the latest blow to the daily fantasy industry, which has come under fire in states including New York, Illinois and Nevada. Daily fantasy operators argue that their paid contests take skill, but Paxton and others have contended that they constitute illegal gambling.

"Simply put, it is prohibited gambling in Texas if you bet on the performance of a participant in a sporting event and the house takes a cut," Paxton said Tuesday, stressing that Texas law only requires "partial chance" for a contest to be gambling.

In a tweet Tuesday, Cuban argued that the opinion did not "represent the views of Texans." He expanded on that Wednesday, saying he learned daily fantasy was a game of skill "because I realize how bad I sucked and had no chance of winning."

The industry, which faces little oversight or regulation, has faced increased scrutiny in recent months amid an advertising barrage from leading players FanDuel and DraftKings.

"When everyone seems to be ganging up on you, that's typically when the best s---'s about to happen," Cuban said Wednesday.

He argued that daily fantasy operators would benefit from increased regulation because they would know where they stand legally. Cuban also contended that sports gambling should be made legal and regulated.

Disclosure: Comcast and NBC are investors in FanDuel.