California Attorney General Declares Daily Fantasy Sports Illegal

SACRAMENTO, Calif. — California Attorney General Rob Bonta has issued a formal opinion stating that daily fantasy sports (DFS) contests constitute illegal sports betting under existing state law, placing a new legal spotlight on an industry long operating in a legal gray zone.

In a written opinion released Thursday, Bonta concluded that DFS contests—such as pick’em and draft-style formats—fall under the scope of California Penal Code section 337a, which prohibits most forms of betting on sports. The statement was made in response to a legal query from Assemblymember Tom Lackey, raising fresh questions about the future of DFS in the nation’s most populous state.

Definition of DFS as Betting

At the heart of Bonta’s opinion is the argument that paying an entry fee for the chance to win real money based on athletes’ real-world performances meets the legal definition of a “bet.” He wrote that both pick’em games, where users predict statistical outcomes for individual players, and draft-style contests, where users assemble teams whose performance translates into winnings, mirror traditional forms of gambling such as proposition and parlay bets.

“We conclude that participants in both types of daily fantasy sports games… make ‘bets’ on sporting events in violation of section 337a,” Bonta wrote.

Bonta’s opinion systematically dismissed legal defenses often used by DFS operators. Key among them was the “skill versus chance” argument. Companies such as DraftKings and FanDuel have long maintained that DFS relies primarily on player skill, thus differentiating it from games of chance. However, Bonta emphasized that California law does not carve out exceptions for skill-based betting—declaring all forms of wagering on sports, skillful or not, as unlawful.

Operators also argued that DFS contests are not wagers but competitions. Bonta rejected this distinction, stating that because participants are not actively involved in sporting events but are instead predicting outcomes for monetary gain, the entry fees are essentially wagers.

Citing the federal Unlawful Internet Gambling Enforcement Act (UIGEA), DFS firms contended their operations are federally protected. But Bonta clarified that UIGEA does not supersede state law and does not legalize activity that California already considers unlawful.

Additionally, he dismissed the relevance of operators being based outside of California, affirming that any company offering DFS to individuals physically in the state is subject to California law.

A Broader Trend Across States

Bonta’s stance aligns California with a growing number of states that have scrutinized or outright banned DFS platforms under sports betting laws. The opinion cited decisions from Arizona, Florida, Virginia, and Wyoming, where regulators similarly concluded that pick’em games represent illegal proposition bets.

“We are not aware of any out-of-state regulator to reach a contrary conclusion,” the opinion stated, reinforcing a national trend toward treating DFS as a form of gambling. Although the Attorney General’s opinion is not legally binding, it could serve as a strong reference point for future legislative or judicial actions. Lawmakers may now be prompted to introduce bills explicitly outlawing DFS in California or to create new regulatory frameworks.

Consumer protection law firms have already taken action. Four class action lawsuits have been filed against major DFS operators—including FanDuel, DraftKings, PrizePicks, and Underdog—alleging that they violated state law by offering what plaintiffs describe as illegal online sports betting. The suits seek financial compensation and injunctions against continued operations.

“These lawsuits are about fairness and truth in advertising,” said Margot Cutter, a partner at Cutter Law PC. “When companies call it something else to skirt the law, that’s a problem not just for consumers but for the integrity of our legal system.”

Underdog, which reportedly draws 10% of its revenue from California, had attempted to prevent Bonta’s opinion from being issued. A Superior Court judge dismissed that effort, ruling the company had not demonstrated potential harm. Underdog has since announced its intent to continue operating in California for now.

 

Participants in daily fantasy sports games make ‘bets’ on sporting events in violation of section 337a.

Conclusion

The legal status of daily fantasy sports in California is facing one of its most serious challenges to date. While Attorney General Bonta’s opinion does not automatically shut down DFS platforms, it lays the groundwork for enforcement actions, regulatory shifts, and ongoing litigation. As the state grapples with where to draw the line between gambling and competition, the coming months may prove pivotal for the multi-billion-dollar DFS industry and the Californians who use it.