California Attorney General to decide fate of online fantasy sports betting
California law prohibiting gambling on sporting events, except for betting on horse races, also extends to the increasingly popular daily fantasy sports games, Attorney General Rob Bonta said in a legal opinion on Thursday.
The opinion, from both Bonta and Deputy Attorney General Karim Kentfield, concluded that both "pick'em" and "draft style" daily fantasy sports games constitute illegal sports wagering and are prohibited in the state, regardless of where the game operators are based.
"California law prohibits the operation of daily fantasy sports games with players physically located within California, regardless of where the operators and associated technology are located," said the opinion. "Such games constitute wagering on sports in violation of Penal Code section 337a."
Bonta rejected the industry argument that daily fantasy sports is legal because it predominantly involves skill and judgment rather than luck or chance on the part of the player.
"That is not a requirement for a 'bet' or 'wager' under [Penal Code] section 337a: the California Supreme Court has explained that, 'unlike a lottery,' betting or wagering 'may involve skill or judgment,'" the opinion said. "Rather, the essential requirement of a 'bet' or 'wager' is that participants win or lose based on the outcome of an uncertain future event, such as a sports competition, even if skilled bettors consistently come out ahead."
In a press statement, Bonta said the opinion follows a request by Assemblymember Tom Lackey (R-Palmdale) for the state Department of Justice to determine the legality of daily fantasy sports. The request originally came in 2023 from former state Sen. Scott Wilk (R-Santa Barbara), according to a lawsuit by Underdog Sports, which sought to prevent Bonta from issuing the opinion.
A Sacramento Superior Court judge denied Underdog's request for an emergency injunction on Wednesday, saying the fantasy sports firm "had ample opportunity to raise such a challenge" over the past 18 months, according to court documents cited by Legal Sports Report. Judge Jennifer Rockwell also noted that Bonta's opinion is advisory only and does not carry the weight of law, the report said.
Among those taking issue with the opinion is Gov. Gavin Newsom, whose spokesperson distanced the governor from the opinion in a statement issued to multiple news outlets.
"The Attorney General, in his independent capacity, issued this opinion — not the Governor's office," the statement read. "While the Governor does not agree with the outcome, he welcomes a constructive path forward in collaboration with all stakeholders."
Lackey told the San Francisco Chronicle that while the opinion was "very powerful," it would likely be challenged in court. He also told the Chronicle it would be "very surprising if there's not some legislation" to legalize some types of fantasy sports betting.
"Clearly, there's a lot of money involved," he told the Chronicle, adding that he said he has no personal opinion on the issue.
The Fantasy Sports & Gaming Association said Bonta's opinion "isn't grounded in common sense and is completely out of step with opinions rendered in other jurisdictions across the U.S.," noting that 26 other states have confirmed that fantasy sports are legal games of skill and not gambling.
"The data shows that Californian citizens love fantasy sports with more than 6 million playing last year in some form of fantasy sports contest, and they expect their elected representatives to protect the legality of this growing industry," said FSGA in a statement.
Underdog argued the release of the opinion posed an "imminent, existential threat" to its business, but it plans to continue operating in the state. Other major operators such as FanDuel and DraftKings said they would also continue operating in California and each planned to meet with the Attorney General's Office to find a resolution.
In 2022, California voters rejected two propositions that would have legalized sports betting in the state, including at Native American casinos. In March, executives from FanDuel and DraftKings attended the Indian Gaming Association's convention in an attempt to open a path to legalized sports betting by better understanding and working with tribes.
Carlos E. Castañeda is a senior editor of news and social media for CBS Bay Area.
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