California Attorney General Investigating Daily Fantasy Sports Legality

November 27, 2023
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The California Attorney General’s Office is preparing a formal opinion regarding the legality of daily fantasy sports in their entirety under state law, Vixio GamblingCompliance has learned.
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The California Attorney General’s Office is preparing a formal opinion regarding the legality of daily fantasy sports in their entirety under state law, Vixio GamblingCompliance has learned.

Last month, the attorney general’s office received a request from Republican Senator Scott Wilk for an opinion on daily fantasy contests continuing to be offered in the state.

In a letter obtained by Vixio, Wilk asked the attorney general to weigh in on whether state law “prohibits the offering and operation of daily fantasy sports betting platforms with players physically located within the state of California, regardless of whether the operators and associated technology are located within or outside of the state.”

Multiple states have taken action in recent months to curtail pick’em style fantasy contests in their state, as offered by operators including PrizePicks, Underdog and Betr.

These moves have included New York and Michigan regulators adopting regulatory changes to prohibit the games, and Florida regulators sending cease-and-desist notices to prominent pick’em style contest operators.

Those actions have largely been to the benefit of traditional daily fantasy operators FanDuel and DraftKings, with their support for the actions on the record.

However, Wilk’s inquiry is not limited to pick’em operators, instead targeting the entire daily fantasy industry in a state where FanDuel and DraftKings suffered a massive defeat last November in their efforts to pass a ballot initiative legalizing mobile sports betting.

Fantasy sports is currently unregulated in California but not explicitly illegal, with DraftKings and FanDuel, as well as Underdog and PrizePicks all active in the state.

In his request, Wilk argues that fantasy sports appear to be a game of chance, rather than a game of skill, reigniting the most common argument since daily fantasy games became popular nearly a decade ago.

“Pursuant to California law, no one may operate 'any game of chance' without the required federal, state, and local licenses,” Wilk says in the letter. “No one has 'the right to operate a gambling enterprise except as may be expressly permitted by the laws of this state and by the ordinances of local governmental bodies.'”

Wilk cited the defeat of Proposition 27, the DraftKings- and FanDuel-backed sports-betting initiative of last November, in his letter.

“Although sports wagering in all forms remains illegal in California, online daily fantasy sports betting is proliferating throughout the state,” he wrote.

“Through these online platforms, a participant pays to enter a contest in which they may win a prize depending on how well athletes perform. 

“Although the participant may utilize their knowledge of a particular sport in choosing their 'team' of players, how well those players perform during a game is completely out of the participant’s control,” Wilk continued.

“As such, daily fantasy sports appears to be a game of chance not otherwise permitted by the laws of California.”

The request, opinion 23-1001, was assigned to Deputy Attorney General Karim Kentfield on October 12, according to a report released earlier this month by the Attorney General’s office.

The timetable of when an opinion would be drafted is an indefinite one. During the process, the office accepts “comments by interested persons” before drafting an opinion for internal review.

“Due to many variables, it is often not possible to accurately predict when a particular opinion will be issued, but we endeavor to respond to every request promptly,” the office says in an FAQ regarding formal opinions on its website.

“Proposed analyses and conclusions of pending opinions are not discussed outside of the Department of Justice,” the FAQ reads.

Wilk, a former Senate Minority Leader, has notably been a supporter of tribal gaming backed initiatives in the past, including co-sponsoring legislation this year that would allow tribes to pursue legal action against cardrooms regarding third-party banked games that tribes have allege to violate state law and tribal gaming exclusivity.

The request is not the first to be made of the attorney general to weigh in on fantasy sports. In 2016, California legislators asked then-Attorney General, and now U.S. Vice President, Kamala Harris to issue an opinion regarding the legality of the games.

However, Harris declined to do so before being elected to the U.S. Senate later in the year, and legislative interest in daily fantasy regulation has been minimal since.

While opinions are advisory rather than binding law, the attorney general’s office says formal opinions are “usually treated as authoritative by the officers and agencies who have requested them,” as well often being treated as “persuasive authority” by courts.

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