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Read Full BioUnderdog Fantasy has filed a lawsuit against California Attorney General Rob Bonta to block his forthcoming opinion that could ban daily fantasy sports (DFS) in the state.
The company argues that DFS contests are games of skill; therefore, they are legal in California. It also claims Bonta is overreaching his legal authority by attempting to issue a statewide ban.
Underdog also claims that prohibition would not protect consumers. Instead, it would serve the interests of California native tribes, who seek to eliminate competition.
The operator warns that banning DFS would result in severe financial consequences for the company and the state. Meanwhile, it would deprive millions of California players of a game that has been around for decades.
While unconfirmed, multiple sources expect that Bonta will deliver his opinion by July 3.
Underdog Argues DFS Are Games of Skill
The operator emphasizes that DFS contests rely on skill, not chance. According to the lawsuit, participants’ skills influence their success in DFS. They include their ability to analyze player statistics, matchups, and other factors.
Underdog claims that participants who utilize those factors and build the most competitive roster are similar to a general manager in traditional sports.
The company further claims that DFS participants do not wager on the outcome of a single event. Instead, they create lineups of athletes from different teams, with points awarded based on the combined performance of these athletes over time, rather than in a single game.
The plaintiff supports its position by citing an Illinois Supreme Court case (Dew-Becker v. Wu), in which it ruled that DFS contests are predominantly determined by skill. The court rejected the state’s Attorney General’s opinion that DFS is illegal gambling.
Moreover, Underdog cites studies by statistical and economic experts. The studies concluded that DFS outcomes depend on the contestant’s skill in assembling the best fantasy roster.
AG Lacks Authority, Says Underdog
One of the central arguments of the DFS operator lawsuit is that Bonta lacks the legal authority to issue an opinion on a DFS ban.
Underdog asserts that the AG’s role does not involve making determinations that lead to new regulatory decisions. Instead, it only provides legal interpretations to current state officials on “any question of law relating to their respective offices.”
The plaintiff points out that the original request for Bonta’s opinion was by former Senator Scott Wilk, who is no longer in office. That, the company says, further invalidates Bonta’s authority to act.
Underdog emphasizes that determining whether DFS violates California law requires extensive fact-finding. That includes analyzing whether skill outweighs chance in contest outcomes, which goes beyond a straightforward legal interpretation:
“Ultimately, the Attorney General cannot determine whether DFS contests are prohibited under California law without some consideration and ascertainment of the relevant facts. In other words, at the core of the requested opinion, the Attorney General is being asked ‘whether the facts satisfy the [relevant legal] standard,’ which is not a purely legal question.”
Moreover, the lawsuit highlights that several previous attorney generals, including former Vice President Kamala Harris, declined to issue opinions on the legality of DFS, acknowledging the need for legislative or judicial resolution.
Underdog Claims a Ban Would Only Benefit Tribes
Underdog claims the ban would primarily benefit California’s tribal gaming industry rather than protecting consumers:
“The opinion, which Bonta’s predecessors declined to issue, will satisfy only one constituency, a small handful of the powerful tribes that maintain a monopoly on gaming in the State. On information and belief, the tribes have met numerous times with Attorney General Bonta and his representatives and lobbied for the opinion to be issued.”
Underdog further emphasizes that former Senator Scott Wilk made the original request prompting this opinion. The company claims Wilk “has notably been a supporter of tribal gaming-backed initiatives in the past.”
California’s tribal groups have historically sought regulatory interventions to eliminate competition from DFS operators and cardrooms, arguing that these entities infringe on the tribes’ exclusivity under their gaming compacts.
Moreover, Bonta is also facing backlash due to his recent proposals targeting California’s cardroom industry. The AG argues the changes aim to redefine operational rules for cardrooms. However, opponents claim they will have a detrimental effect on municipal budgets. They say that the changes will also result in the loss of thousands of jobs.
Critics of these changes echo Underdog’s argument that Bonta’s actions are a regulatory overreach.
In contrast, organizations representing California tribes, such as the California Nations Indian Gaming Association (CNIGA) and the Tribal Alliance of Sovereign Indian Nations (TASIN), have publicly supported the Attorney General’s move to ban DFS.
Tribal representatives maintain that the opinion is crucial to addressing what they call “illegal and unregulated gaming.”
Economic Consequences and Broader Impact
Underdog warns that a DFS ban in California would result in severe economic consequences for the company and the state’s broader gaming market. The company claims that 10% of its revenue comes from California. A potential ban would cause immediate and lasting financial harm.
“Specifically, the issuance of the opinion would severely and irreparably impair Underdog’s relationships with service providers, business partners, and investors, both in California and nationally. It would also cause many of Underdog’s customers in California to withdraw money from their accounts and irreparably damage the Company’s reputation and goodwill among its customers in the State. None of these harms would be compensable through monetary damages.”
Underdog also warns that a ban could trigger widespread job losses and shutter legitimate businesses, further harming California’s economy.
