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Reports of a pending unfavorable opinion from California’s attorney general regarding the legality of daily fantasy sports has caused at least one operator to take preemptive action even before the opinion is released.
Sacramento television station KCRA was the first to report last week that Attorney General Rob Bonta is set to release an opinion that will deem online fantasy sports platforms illegal in the Golden State.
The opinion has been pending since it was commissioned in October 2023 by then Republican state Senator Scott Wilk, who asked the attorney general to weigh in on whether state law prohibits the operation of daily fantasy sports platforms.
The request for the opinion came in the midst of a host of states taking action to prohibit the pick’em-style fantasy contests offered by companies such as PrizePicks and Underdog, which were deemed by some to be too close to a sports-betting product.
Several new outlets have since reported that the opinion from Bonta’s office would release the official opinion by Thursday (July 3).
In a preemptive strike, however, Underdog has filed suit in Sacramento County Superior Court seeking an injunction to block its release.
“Any potential opinion is flawed because it has to rely on factual determinations the opinion process cannot and should not resolve, according to California law,” an Underdog spokesman said Tuesday. “The last two attorneys general, Kamala Harris and Xavier Beccera, did not issue opinions, and Attorney General Bonta has been in office for more than four years without questioning fantasy sports games.
“We are optimistic the law will be followed and are confident in the legality of fantasy sports in California,” the spokesman said. “If a negative opinion is issued, fantasy sports will prevail on the merits, no different than in New York and Illinois where courts rejected the similarly wrong opinions of those states' attorneys general.”
In its legal filing, Underdog said that through discussions with the attorney general’s office, the company had confirmed that the opinion would be “very broad”, finding not just pick’em-styles games, but all daily fantasy sports to be illegal under state law.
“The attorney general’s office confirmed that after releasing the opinion, the goal would be to use the threat of an enforcement action — under the interpretation of California law that the attorney general will impermissibly announce in the opinion — to pressure Underdog into agreeing to leave California entirely,” wrote Caleb Lin, an attorney for Underdog, in the lawsuit seeking an injunction on the opinion.
California Indian tribes have been a longstanding opponent of daily fantasy games in the state, and the California Nations Indian Gaming Association wrote to California lawmakers last week urging them to not consider any potential legislative remedies sought by the daily fantasy operators until after the attorney general opinion has been released.
A broad finding would impact not just PrizePicks and Underdog, but also FanDuel and DraftKings, who operate their own traditional daily fantasy products in the market.
The opinion puts them in a more precarious position, as they continue to curry favor with tribal leaders in hopes of someday having a role in a regulated sports-betting market in California, following a disastrous 2022 ballot initiative that was highly adversarial.
