Internet-based fantasy sports services potentially face prohibition in California
California Attorney General Rob Bonta is set to issue a legal opinion by July 3, 2025, that could potentially outlaw most forms of online daily fantasy sports (DFS) within the state. This anticipated ruling, which could significantly impact the DFS industry in California—one of the largest markets in the country—stems from growing concerns that some DFS games resemble prohibited sports betting formats.
The issue gained traction in 2023 when State Senator Scott Wilk formally requested the Attorney General’s office to review the legality of DFS following voter rejection of legal sports betting in California. Prior Attorneys General, including Kamala Harris and Xavier Becerra, had refrained from issuing definitive opinions on DFS legality. However, Bonta’s office is now poised to adopt a comprehensive position that could deem paid DFS contests as illegal gambling under California law.
This decision, if implemented, could disrupt a thriving industry generating substantial revenue within the state. One major DFS operator, Underdog Sports, which earns about 10% of its revenue from California, has already filed a lawsuit against AG Bonta to block the release of this opinion. The company argues that the Attorney General lacks authority to issue a ruling involving disputed factual questions and warns that the opinion could cause irreparable harm to their business, payment processors, and customers.
The Coalition for Fantasy Sports has also expressed concerns about the impact of the legal opinion on fantasy sports players in California. Several sources have confirmed this decision to KCRA-TV, making it the first to report this potential regulatory crackdown on DFS operations in California.
As of Wednesday, Bonta's office did not respond to a request for comment. The legal opinion, expected to be released soon, will provide more details on why the Attorney General came to this conclusion. The companies in question have been operating in California for a decade, and the decision could put billions of dollars at risk for those companies.
This development is already facing legal challenges aimed at preventing the opinion’s issuance. As the situation unfolds, Californians who participate in online fantasy sports will eagerly await the outcome of this potential regulatory shift.
In the upcoming legal opinion by California Attorney General Rob Bonta, scheduled for July 3, 2025, there's a possibility that paid daily fantasy sports (DFS) contests will be deemed illegal gambling under California law, which could significantly impact not only DFS operators like Underdog Sports, but also sports-betting enthusiasts in the state. The pending decision, which has already sparked a lawsuit from Underdog Sports to block its release, has raised concerns within the industry and among DFS players, as it could potentially outlaw most forms of online daily fantasy sports, similar to prohibited sports betting formats.
