Contemplating a Possible Prohibition of Online Fantasy Sports in California
California is on the brink of a significant legal shift in the realm of online gaming, as Attorney General Rob Bonta is poised to issue a legal opinion that could deem all forms of paid daily fantasy sports (DFS) contests illegal under state law. The anticipated opinion, expected to be announced by July 3, 2025, would encompass all DFS offerings, including pick’em style games, traditional fantasy leagues, and any other formats that offer cash prizes based on the actual performance of professional athletes.
This development marks a crucial legal step rather than the passage of new legislation, as the legal status of DFS in California has been ambiguous for over a decade. The current move stems from a review initiated in October 2023 by Bonta’s office at the request of former Senator Scott Wilk, who questioned the legality of DFS under existing state gaming laws due to its perceived element of chance.
The looming ban has sparked a public and legislative debate, with strong calls for voter input and industry opposition to a blanket ban. A bill to explicitly legalize fantasy sports has been rumoured but not introduced in the current legislative session. Meanwhile, advocacy groups like the Coalition for Fantasy Sports argue that the legality of fantasy sports should be decided by California voters, not through court or administrative rulings.
The Coalition for Fantasy Sports, comprising daily fantasy sports and skill-based sports gaming platform companies such as Betr, PrizePicks, Underdog Fantasy, Dabble, and Splash Sports, has expressed hope that the attorney general's office will consider sports fans' views before making a decision. If legislation banning online fantasy sports is enacted in California, it could potentially impact the multibillion-dollar fantasy sports industry.
This proposed ban is not unique to California. Louisiana and New York have presented proposals to eliminate online fantasy sports operations, while Connecticut and Montana have already enacted laws that ban such activities. Even as California moves forward with this push, there are concerns about whether other types of online gaming may also be affected by the proposed legislation.
It's worth noting that traditional fantasy sports, where players select a team of real-life athletes from various professional leagues and receive points based on the statistics of the athletes they picked, are considered games of skill rather than chance. Courts have ruled that traditional fantasy sports are legal due to their game-of-skill nature. However, the upcoming opinion from the California Department of Justice could change the landscape for online fantasy sports in the state.
As the Fourth of July holiday approaches, Californians await the public release of the attorney general's opinion, which could trigger a policy battle and possibly legal challenges from the industry. The California Nations of Indian Gaming Association and Tribal Alliance of Sovereign Indian Nationals have previously warned California lawmakers about some fantasy sports operators potentially pushing to have their legal status changed in the state. This ongoing debate underscores the importance of balancing public interest, industry concerns, and the law in shaping the future of online gaming in California.
In light of the anticipated legal opinion from Attorney General Rob Bonta, discussions have arisen about the potential impact on dividends for companies involved in the daily fantasy sports (DFS) market, particularly those offering cash prizes based on sports performances. This development, if leading to a ban on online fantasy sports in California, could present a significant challenge for these businesses in the competitive markets.
