California Attorney General issues opinion DFS games violate state law

California Attorney General Rob Bonta has delivered his opinion that daily fantasy sports (DFS) games should be illegal in the state.

California’s Department of Justice released Bonta’s legal opinion on the vertical yesterday, 3 July.

Per Bonta’s opinion, “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”.

According to California law, it is illegal if a person “makes, offers or accepts any bet or bets, or wager or wagers, upon the result, or purported result, of any trial, or purported trial, or contest, or purported contest, of skill, speed or power of endurance of person or animal, or between persons, animals, or mechanical apparatus”.

In issuing his opinion, Bonta assessed the merits of both draft- and pick’em-style DFS games and concluded that both game types are in violation of state law on the grounds they allow players to make “bets” on sporting events.

With pick’em games, Bonta said they breach Californian law because the game’s entry fees are “bets” or “wagers” placed “upon the result of trial … or contest … of skill, speed or power of endurance of person … or between persons”, which falls under with the state’s definition of sports betting.

Bonta noted that both the player and operator have a financial stake “in the outcome of the game” as “the amount of money the operator will have to pay out depends upon whether each of the individual bets is won or lost.”

His opinion also referenced regulators in Virginia, Arizona, Wyoming and Florida, with each state’s sports betting laws applying to pick’em-style games.

Regarding draft-style games, Bonta likewise concluded that entry fees meet the definition of a bet or wager, and that a player’s financial success is tied to the performance of an athlete in a sporting contest.  

Bonta argued the use of skill is immaterial with DFS games, opining that something can be a bet or wager and still involve an element of skill.

Conversely, the Attorney General did not issue his opinion as to whether DFS games could be classed as lotteries due to the difficultly in determining whether skill or luck is the overriding factor.

While Bonta’s opinion isn’t state law, it will nevertheless be a blow to DFS operators within the Golden State as stakeholders remain fearful the opinion may drive official anti-DFS legislation to be put in place.

One person who disagrees with Bonta’s opinion is California Governor Gavin Newsom.

A spokesperson for the governor told local news outlet KRCA-TV: “The AG, 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.”

Earlier this week, Underdog Sports launched a lawsuit against Bonta in an attempt to prevent him from declaring DFS games illegal in the state.

The injunction request was denied by the Sacramento Superior Court on the grounds Bonta’s opinion is not legally binding.

The Coalition for Fantasy Sports, comprised of PrizePicks, Underdog, Betr, Dabble and Splash Sports, was also critical of Bonta’s decision.

Executive director JT Foley said: “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, recognised 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.”