California AG says daily fantasy sports play qualifies as illegal gambling
Sports betting is also prohibited under California law.
Key Points
- The AG examined whether DFS activity is like sports betting, daily prize picks and lottery activities
- His official response came shortly after a legal suit was filed by Underdog Sports
California Attorney General Rob Bonta has issued a statement saying daily fantasy sports (DFS) contests fall under the state’s definition of gaming and are not legal in California.
“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,” Bonta said in his report. “Such games constitute wagering on sports in violation of Penal Code section 337a.”
Bonta’s response to the question of DFS legality came days after Underdog Sports filed a lawsuit, asking the court not to allow the attorney general to weigh in on this matter.
According to court documents, Underdog claimed that issuing an unfavorable opinion toward the legality of DFS gaming could have a negative financial impact on California’s gambling industry.
The company affirmed that DFS meet the requirements to be considered legal gambling in California, and issuing an opinion saying otherwise “would violate clear statutory constraints on the Attorney General’s authority to issue the opinion.”
As a result, Underdog has asked the court to intervene.
The company stated in its lawsuit, “If issued, the opinion will poison a thriving industry that serves millions of Californians. It will cast a legal cloud over companies that organize digital fantasy sports contests and deter the businesses who make these contests possible by processing payments, hosting the platforms that Californians use to participate in digital fantasy sports and providing critical financing.
“In short, it will cost jobs, squander investments and deprive Californians of an activity that millions enjoy.”
However, Attorney General Bonta disagreed. In his findings he noted, “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.
“We conclude that daily fantasy sports games, including both pick’em and draft style games, are prohibited by section 337a because they involve betting on sporting events.”
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