California Attorney General declares daily fantasy sports as illegal betting

California’s legal landscape for daily fantasy sports (DFS) has shifted dramatically following a formal opinion issued by Attorney General Rob Bonta.

DFS contests constitute illegal sports betting under California law, specifically referencing Penal Code section 337a, which prohibits betting on sporting events within the state

The opinion was prompted by a request from State Assembly member Tom Lackey, seeking clarity on the legal status of DFS platforms.

For years, major operators such as DraftKings and FanDuel have offered DFS contests to California residents, despite the state’s longstanding prohibition on most forms of sports wagering.

The Attorney General’s assessment now puts these offerings in direct conflict with state law

According to the 33-page opinion, both ‘pick’em’ and ‘draft-style’ DFS games fall under the definition of sports wagering.

In pick’em contests, players predict the performance of individual athletes, such as the number of points scored in a game, as well as match results, mirroring traditional proposition or parlay bets.

Draft-style games, where participants assemble a roster of athletes and compete for cash prizes based on real-world performance, are also considered illegal wagers under the law.

The opinion emphasises that the illegality applies regardless of whether the games are operated from within or outside California, as long as the participants are physically located in the state.

Attorney General Bonta addressed arguments from the industry that DFS is a game of skill, not chance, and therefore should be exempt from gambling laws.

The opinion rejects this distinction, citing California Supreme Court precedent that betting or wagering may involve skill or judgment, but still constitutes illegal gambling if the outcome is based on an uncertain future event, such as a sports competition.

The legal opinion does not immediately change state law or force operators to cease activity, but it sets a significant precedent for potential enforcement actions by local prosecutors.

The California Department of Justice has indicated that companies are expected to comply with the law, though no specific timeline for enforcement has been announced.

This development follows growing scrutiny of fantasy sports operators by lawmakers, tribal gaming interests, and advocacy groups within the state.

The opinion could also influence future legislative debates and court rulings regarding the status of both daily and potentially season-long fantasy sports contests in California.

Governor Gavin Newsom has publicly expressed his disagreement with the Attorney General’s interpretation, hoping for a collaborative approach among stakeholders to address the issue.

Meanwhile, fantasy sports companies and industry associations have signaled that they plan to continue advocating for the legality of DFS and may challenge the opinion in court.

With California accounting for a substantial portion of the national DFS market, the Attorney General’s ruling marks a pivotal moment for the industry and its millions of users in the state.