After a decade of waiting, the California Attorney General’s office is apparently going to be issuing its opinion on the legality of fantasy sports.
According to local news outlet KCRA 3, AG Rob Bonta’s office is expected to issue an opinion between now and July 3 in which the office concludes fantasy sports runs afoul of state law.
SBC Americas understands the ruling will apply to all DFS offerings, encompassing against-the-house pick’em offerings, peer-to-peer play such as DraftKings’ Pick 6, traditional DFS and any other form of fantasy with a cash prize.
Years in the making
To say that the legal status of DFS in California is not a new topic would be an impressive understatement. The question has been circulating for more than a decade.
Back in 2015, when Kamala Harris was California’s AG, Assemblymember Marc Harris sent a letter to her office to request that Harris “take action to order FanDuel, DraftKings and other fantasy sports betting websites to immediately discontinue business in California.” He asserted that fantasy sports betting is not legal under state law. Harris did not comment or intervene on the issue.
Things ramped up in 2023 when Bonta began assessing the DFS vertical. That investigation started after Sen. Scott Wilk sent a letter to the California Department of Justice requesting a legal opinion on DFS after voters resoundingly said no to the idea of legalizing online sports betting. Wilk posited at the time that DFS “appears to be a game of chance not otherwise permitted by the laws of California.”
Tribes have their say, again
In January 2024, the California Indian Nations Gaming Association (CNIGA) submitted comments to Bonta on behalf of its 52 member tribes.
CNIGA asserted that, even if DFS is considered legal under state law, against-the-house pick’em games “do not qualify as lawful fantasy sports or contests but illegal sports wagering.” That, they argue, would violate their exclusive rights to offer sports betting.
This week, CNIGA sent a letter to California lawmakers, in collaboration with the Tribal Alliance of Sovereign Indian Nations (TASIN), to warn that DFS operators may be working on legislation and to implore lawmakers to wait for Bonta’s opinion to be released.
There were rumors of a bill to explicitly legalize fantasy sports circulating the California Assembly but, to date, no such bill has been introduced.
“Should a bill be introduced before the Attorney General’s opinion is released and fully evaluated, we will be compelled to oppose it,” the tribal representatives wrote.
California the biggest DFS market
California, which is estimated to be the largest DFS market in the U.S., is unregulated and therefore operators do not pay any tax to the state. Should the vertical be banned in its entirety, these operators lose out on a ton of money. Perhaps enough to motivate them to challenge the decision in court.
A Coalition for Fantasy Sports spokesperson told KCRA 3 that the decision would be devastating news for the millions of California sports fans who love to play fantasy sports. “Californians have been playing daily fantasy sports games for more than a decade, and it is shocking to think that the state would suddenly take them away.”
