Chavdar Vasilev is a gambling news writer with several years of experience in the iGaming industry. He started creating promotional content but soon found he loved reporting on the industry itself. Since then, he’s delivered...
Read Full BioDaily fantasy sports (DFS) contests are under threat in California, as Attorney General Rob Bonta is expected to issue an opinion declaring all DFS platforms illegal. That includes controversial pick-’em style contests that resemble sports betting.
While Bonta’s office has not confirmed this, Sacramento news outlet KCRA 3 reports that multiple sources have confirmed that a formal opinion should arrive within days.
A potential ban could force operators such as DraftKings, FanDuel, PrizePicks, and Underdog Fantasy to withdraw from the nation’s largest market, jeopardizing hundreds of millions in annual handle.
Bonta Was Asked For a Legal Opinion
A decision by Bonta stems from a request by lawmakers and tribal gaming leaders. They argue that DFS is unregulated gambling and undermines tribal exclusivity, following voters’ rejection of sports betting in 2022.
Earlier this week, the California Nations of Indian Gaming Association and the Tribal Alliance of Sovereign Indian Nationals sent a letter to California lawmakers, warning them that DFS operators might be working to push legislation regarding their legal status in the state.
McGeorge School of Law adjunct professor Chris Micheli feels that if Bonta believes that DFS operators violate the Penal Code, he would file a lawsuit to enforce his interpretation of the law.
The courts will ultimately decide the matter. Still, Micheli notes that California courts traditionally grant “a fair amount of deference” to the Attorney General’s legal opinions.
Tribal leaders have welcomed the news of a potential ban. In contrast, the Coalition for Fantasy Sports stated that the opinion would be devastating to millions of Californians who enjoy playing fantasy sports.
It is expected that the California Department of Justice will release the opinion by July 3rd.
Several States Have Questioned Pick-’Em DFS
California is far from alone. Several other states have already taken action against one of the fastest-growing DFS formats: pick ’em contests.
These contests, available at platforms like PrizePicks and Underdog Fantasy, allow users to predict individual player stats. For example, whether an NBA player will have more than five rebounds in a game.
Critics claim that this type of DFS contest closely resembles player prop bets available at regulated sportsbooks, classifying it as illegal gambling.
States that have cracked down on pick ’em DFS include:
- Arkansas: In 2024, the state’s gambling regulator deemed that the contests violated gambling laws.
- Florida: In 2023, the state sent cease-and-desist letters to operators deeming pick ’em contests illegal.
- Illinois: In April this year, the gambling regulator sent cease-and-desist letters to operators.
- Michigan: Passed a law in 2023 banning pick ’em DFS contests.
- Kansas: Sent cease-and-desist letters in 2024.
- New York: In 2023, it adopted regulations to ban DFS contests that mimic sports betting.
- Wyoming: In 2023, it warned operators of felony and multi-million dollar charges.
In addition to these states, Colorado lawmakers are debating whether the contests are legal. The actions by the state gambling regulators have forced platforms to stop offering the controversial contests in these jurisdictions.
Despite the challenges, DFS operators have begun adapting to the scrutiny by adjusting their products. That includes the introduction of peer-to-peer props or parimutuel-style contests.
Last month, Underdog Fantasy relaunched draft-style DFS in New York after reaching a $17.5 million settlement with the state.
Cardrooms and Sweepstakes Casinos Are Also Under Threat in CA
Daily fantasy sports aren’t the only target. California is also moving against two other gaming sectors that have long operated in legal gray areas: cardrooms and sweepstakes casinos.
Recently, Bonta proposed changes to the state’s gaming laws governing cardrooms. Those include changes to rules concerning third-party dealers, known as Third-Party Proposition Player Services (TPPPS), and restrictions on blackjack-style games.
Cardrooms and native tribes have long clashed as the tribes have exclusivity over gambling in the state, but California gave a compromise to the cardrooms through TPPPS.
By using a third-party dealer, cardrooms technically do not offer banked games (where players play against the house), which are exclusive to native tribes. The tribes, however, argue that the cardrooms offer illegal gambling.
Bonta’s changes include that only seated players can act as TPPPS, and they must rotate. He also proposes changes that essentially ban the game of blackjack. His proposals have met significant backlash from city officials, business owners, and the general public.
Meanwhile, a proposal to ban sweepstakes casinos in California surfaced earlier this week. In addition to prohibiting the platforms, the proposed legislation makes it illegal to promote sweepstakes casinos. That could get several celebrities in hot water.
They include Drake, who has a deal with Stake.us, Paris Hilton, who promotes WOW Vegas, Ryan Seacrest, who endorses Chumba Casino, as well as John Daly, who has been featured in Modo’s social media posts and promotions.
