Discussion between Native American leaders on California's actions targeting Daily Fantasy Sports (DFS) and sweepstake organizers

Discussion between Native American leaders on California's actions targeting Daily Fantasy Sports (DFS) and sweepstake organizers

As of mid-2025, the legal landscape for daily fantasy sports (DFS) and sports betting in California remains uncertain. California Attorney General Rob Bonta's formal opinion, issued in July 2025, deems DFS as illegal under the state's Penal Code § 337a, interpreting wagering on sporting events to include DFS contests with real-money prizes [1][4][5]. However, this opinion is advisory and lacks direct legislative or judicial force.

Despite this, the opinion creates legal uncertainty for DFS operators like DraftKings and FanDuel, who have historically generated significant revenue in California. Governor Gavin Newsom publicly disagreed with this AG stance, reflecting tension between executive and legal interpretations [1][4][5].

Regarding sports betting and prediction markets more broadly, California has not yet legalized sports betting by mid-2025. Nevertheless, tribal governments, particularly the California Nations Indian Gaming Association (CNIGA), representing 52 tribes, are pushing for regulation and possible legalization of sports betting [2][5]. Proposals include a single tribe-owned sports betting entity partnering with national operators, with revenue-sharing and tax regulation intended to protect tribal interests.

The CNIGA rejected proposals allowing commercial sportsbooks in late 2023, indicating a preference for control over sports betting regulation and licensing [2]. The Pala Band of Mission Indians has shown initiative by submitting an online sports betting initiative, signaling active tribal engagement in this legislative area [2].

Fantasy sports operators and plaintiffs have pursued legal challenges against DFS operator DraftKings, seeking to stop alleged unlawful gambling under current law [3]. Meanwhile, sweepstakes companies argue that more study needs to be done on the California bill, and its passage should not be rushed [6].

The lack of enforcement by California has enabled sweepstakes operators to continue, leading to concerns about the lack of regulation and offshore basis of these companies [6]. Tribes are demanding immediate enforcement from Attorney General Bonta and for California lawmakers to pass the bill [7].

The issue of DFS and sweepstakes was discussed in a webinar hosted by the Indian Gaming Association, with panelists including IGA Conference Chair Victor Rocha, IGA CEO Brian Giles, tribal attorney Scott Crowell, and tribal gaming attorney Joe Webster [8]. Webster emphasized the need for enforcement against sweepstakes operators, stating that the laws are clear they are illegal across the country [6].

Crowell considers the CFTC prediction market and Kalshi product an existential threat, as it could make state and tribal regulated sports betting industries irrelevant [9]. Giles raised the issue of DFS operators like FanDuel and DraftKings, expressing concern they may operate sports wagering in markets where it's not legal [9].

As the legal status of DFS in California remains unofficially illegal due to the AG opinion restricting paid contests as unauthorized wagering, and no legislation yet codifies this ban, monitoring legislative developments and court rulings will be essential in this evolving area.