DFS Operators Face Uncertainty in California After AG's Opinion
In a long-awaited move, California Attorney General Rob Bonta has finally released his opinion on daily fantasy sports (DFS), concluding that they are illegal under state law.
LISTEN TO THIS ARTICLE:According to Bonta, "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. Such games constitute wagering on sports in violation of Penal Code section 337a."
Bonta emphasizes that both pick 'em and draft-style games are in violation of the Penal Code, which bans any form of betting or wagering on contests or trials of skill or endurance.
The AG noted that his conclusion aligns with the views of regulators in other states, including Virginia, Arizona, Wyoming, and Florida, which have determined that laws governing sports wagering apply to pick 'em-style DFS games. He pointed out that no out-of-state regulator has disagreed with this assessment.
Bonta's July 3 opinion about DFS games didn't come as a surprise to many who had been expecting him to toe that path. Fearing this outcome, Underdog, a DFS operator, sued the AG and the California Department of Justice earlier this week in an attempt to block the release of the opinion. However, the court denied the request.
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Governor and Industry Speak Out
As expected, DFS operators have expressed disagreement with the opinion deeming their operations illegal. Interestingly, the governor's office is also against the judgment. A spokesperson for California Governor Gavin Newsom stated that while the Governor disagrees with Bonta's opinion, he is open to finding a solution that involves working with all parties involved.
The Coalition for Fantasy Sports, which advocates for DFS operators, has also urged the AG to work towards a solution that balances regulatory oversight with the continuity of fantasy sports in California.
We agree with Governor Newsom — AG Bonta got it wrong. As the Court said yesterday, this opinion 'does not effect any change in law' and does 'not carry the weight of law.' The law has not changed, a fact the last two Attorneys General, Kamala Harris and Xavier Becerra, recognized as they specifically declined any similar action. We are hopeful the Attorney General heeds the Governor's call to find a constructive solution that preserves the games that California sports fans love.
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