Underdog Fantasy Challenges California Attorney General's Decision on Daily Fantasy Sports
In a recent turn of events, Underdog Fantasy, a popular daily fantasy sports (DFS) platform, has lost its emergency lawsuit in Sacramento Superior Court against California Attorney General Rob Bonta. The lawsuit aimed to block Bonta from issuing a legal opinion on the legality of DFS in California.
On July 2, 2025, a Sacramento County judge denied Underdog’s request to stop the AG’s opinion from being published, ruling that the company did not prove imminent harm from the opinion[1]. Following this decision, AG Bonta issued a formal opinion on July 3, 2025, declaring paid DFS contests with entry fees as illegal gambling under California law (Penal Code § 337a)[2][3].
In response to the AG’s opinion, Underdog removed its against-the-house DFS game from California and transitioned to a peer-to-peer (P2P) pick’em product called Champions, which is compliant with the AG’s interpretation of the law[2][5].
Although the AG’s opinion is advisory and not a change in law, it carries significant persuasive authority and guides law enforcement and courts. Bonta has vowed to enforce this interpretation, which puts pressure on DFS operators in California and threatens the availability of traditional DFS games in the state[4].
Underdog generates more than 10% of its annual revenue from California. The company fears that if it is forced out of the state, it could experience customer flight, loss of bank and payment processor relationships, investor concerns, and long-term reputational damage.
The lawsuit also alleges that Bonta's office disregarded internal guidance regarding the issuance of formal opinions. Underdog claims that the AG lacks the statutory authority to release the DFS opinion[6].
California DFS has existed in a legal gray area for years. The original request for the DFS opinion came from former state senator Scott Wilk, who left office in 2024. Underdog Fantasy is fighting not just for its survival in California, but also to preserve the legal ambiguity surrounding sports betting that has allowed the industry to grow without regulation or taxation.
The consequences of the DFS opinion could be far-reaching, affecting not just Underdog Fantasy, but the entire fantasy sports industry. If all DFS is declared illegal under California betting law, it could set a precedent for other jurisdictions, potentially causing devastating consequences for the broader fantasy sports industry.
References:
[1] California Courts. (2025). Underdog Fantasy v. Rob Bonta. [Case No. 34-2025-0000023].
[2] Underdog Fantasy. (2025). Press Release: Underdog Fantasy Transitions to Peer-to-Peer DFS Product in California.
[3] California Attorney General's Office. (2025). Opinion on the Legality of Daily Fantasy Sports in California.
[4] California Department of Justice. (2025). Enforcement Guidance on Daily Fantasy Sports.
[5] National Fantasy Sports Association. (2025). Statement on California Attorney General's Opinion on Daily Fantasy Sports.
[6] Underdog Fantasy. (2025). Complaint: Underdog Fantasy v. Rob Bonta. [Case No. 34-2025-0000023].
- The California Attorney General, Rob Bonta, declared paid daily fantasy sports (DFS) contests with entry fees as illegal gambling under California law, which could have far-reaching consequences for the entire fantasy sports industry, especially for companies like Underdog Fantasy that generate a significant portion of their annual revenue from California.
- The possibility of all DFS being declared illegal under California betting law threatens the availability of traditional DFS games in California and sets a potential precedent for other jurisdictions, potentially causing devastating consequences for the broader fantasy sports industry.
- Despite the advisory nature of the AG's opinion, its persuasive authority guides law enforcement and courts, putting pressure on DFS operators in California to comply or risk legal action, posing risks to customer flight, loss of bank and payment processor relationships, investor concerns, and long-term reputational damage for companies like Underdog Fantasy.
