California Attorney General Rob Bonta issued a 33-page opinion stating that daily fantasy sports (DFS) platforms are illegal gambling under current state law.
Government Code section 12519 authorizes the Department of Justice (DOJ) to provide formal interpretations of existing laws. The opinion was issued in response to a request for clarification from Assembly Member Tom Lackey.
Bonita’s opinion states that DFS contests are betting on sporting events and are therefore illegal under California’s Penal Code, which currently bans all forms of online sports betting. Sports betting is currently only available from online California casinos that operate offshore, as there are no laws in the state that allow domestic sports wagering.
Bonta wrote, “Like traditional sports wagering, daily fantasy sports games enable participants to win or lose money based on the outcome of sporting events played by third-party athletes.”
California DFS Operators Continue To Accept Bets
DFS operators have been offering their services in the state of California for over 13 years and have not faced any legal challenges. DraftKings responded to the opinion, saying that they “respectfully disagree” and stated that peer-to-peer fantasy contests are legal. FanDuel also responded, saying they look forward to discussions with the Attorney General’s office.
Another popular DFS operator, Underdog, had previously sued to stop the release of the opinion. Underdog claims that the opinion represented an imminent, existential threat to their business. They also plan to continue accepting DFS bets.
Underdog has also asserted that its contests should be classified as games of skill, referencing legal precedents from states such as New York and Illinois, where daily fantasy sports (DFS) have been determined not to fall under restrictions imposed by California gambling laws.
Tribal Casinos Push To Legalize Sports Wagering
In 2022, California’s Proposition 26 was presented to voters. The proposed legislation would have allowed CA Indian casinos to offer sports wagering on federally recognized land. However, the proposition was overwhelmingly rejected by voters, with 66% of the vote opposing the proposal.
Currently, there are no laws in California that make online sports betting illegal for residents, as local gambling laws only refer to state-licensed services. Offshore sportsbooks have been accepting California players since the early 2000s and are not subject to California laws, as they operate legally from outside the United States.
Several states that have enacted local sports betting laws have sought to limit access to offshore sports betting sites by sending cease-and-desist letters to popular operators. While the tactic has been successful in some markets, many operators have not complied with the request, as they are operating from outside the United States.