California AG Aims to Enforce Against DFS Operators

Earlier this month, California Attorney General Rob Bonta rendered his legal opinion on daily fantasy sports operators active in the Golden State. Bonta declared that DFS operators were operating illegally in the state, and his opinion would be buttressed by enforcement.

California AG Declares Daily Fantasy Sports Illegal, Promises Enforcement

In 2023, former state Senator Scott Wilk requested a legal opinion regarding DFS from Attorney General Bonta, and earlier this week, the AG delivered on that request. Before Bonta could make his declaration, Underdog Fantasy filed an injunction to suppress the California Attorney General from uttering his non-binding legal opinion.

A Sacramento judge deemed the suit to be without merit, and Bonta gave the opinion that Underdog expected and feared.

“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,” said the opinion. “Such games constitute wagering on sports in violation of Penal Code section 337a.”

And it is not just “pick’em style” offerings, similar to a betting parlay menu, that have drawn his ire, but it is also the traditional snake draft tournaments that are also in violation of the law, according to Bonta.

Bonta’s opinion is non-binding, as there is no legislation specifically tailored to outlawing DFS in California. However, there are no regulations or tax implications, and currently, DFS operators like Underdog, DraftKings, and FanDuel operate with impunity in the state.

California Tribes Demand Enforcement of Bonta’s DFS Opinion

Bonta has recently announced his opinion will have teeth, and he is expected to be targeting DFS operators moving forward. But the legal question remains: can he?

“The next step is our enforcement, and laws are meant to be enforced,” Bonta said. “We expect our legal opinion to be followed and complied with by everyone governed by it.”

The Native American tribes jealously guard gambling in the Golden State and believe that if and when it does come, it will be on their terms, including DFS operations. Therefore, they backed Bonta’s opinion.

California Nations Indian Gaming Association (CNIGA) chair James Siva said, “While [CNIGA] commends Attorney General Rob Bonta for standing up for the rule of law in California, it is also very clear that California has long turned a blind eye to illegal gambling—at the direct expense of tribal governments.

“Untold millions, if not billions, have been illegally wagered over the past decade. Where is the enforcement? Where is the accountability? It is now imperative that the state back up this legal opinion with strong enforcement and that lawbreakers be held to account.”

Gov Opposes Bonta’s Opinion

Undoubtedly, the DFS operators will not be leaving a state as densely populated as California without a fight. And there are also reports that California Governor Gavin Newsom disagrees with Bonta and has stated so publicly.

Governor Newsom’s spokesperson, Izzy Gardon, said, “The attorney general, in his independent capacity, issued this opinion—not the governor’s office.

“While the governor does not agree with the outcome, he welcomes a constructive path forward in collaboration with all stakeholders.”

The Coalition for Fantasy Sports executive director, JT Foley, naturally echoed those sentiments and said, “We agree with Governor Newsom—AG Bonta got it wrong. As the Court said yesterday, this opinion does not affect 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.”