California Attorney General Rob Bonta has officially released a legal opinion indicating all daily online fantasy sports platforms in the state are illegal.
The opinion, which KCRA 3 first reported last week, is expected to set up likely court action and a future legislative battle between fantasy sports operators and tribes that have been questioning the legality of online fantasy sports platforms in California.
The attorney general states that the fantasy sports platforms are illegal because they involve betting on sports, which is not allowed under current state law.
“After reviewing the opinion, the California Department of Justice expects companies to come into compliance with the law. Any specific action beyond that is premature,” a spokesperson for Bonta’s office told KCRA 3 in a statement Thursday when asked how the opinion would be enforced.
The office would not say if it’s giving the companies a specific window of time to “comply” with the law, which some interpret as completely ending operations in California.
The decision specifically makes a determination on daily fantasy sports but raises questions around season-long fantasy sports such as fantasy football or baseball leagues, where players compete for several months before they can win a prize.
The 33-page document noted the request that prompted Bonta’s opinion specifically asked for a decision on daily platforms, but legal experts note he makes no distinction between daily fantasy and season-long.
“I would think, based upon his legal analysis in ruling in his opinion that the daily fantasy sports is contrary to California law, that he would find the same way for the seasonal,” said Adjunct McGeorge School of Law Professor Chris Micheli.
Underdog Fantasy, one of the largest daily fantasy sports platforms in the country, tried to sue to stop Bonta from releasing the opinion earlier this week. The judge in that case suggested the opinion would not change state law. The company said the state accounts for about 10% of its annual revenue.
Minutes after Bonta released the opinion, Gov. Gavin Newsom’s office said the governor does not agree.
“The Attorney General, in his independent capacity, issued this opinion — not the Governor’s office,” noted Izzy Gardon, a spokesman for Gov. Newsom. “While the Governor does not agree with the outcome, he welcomes a constructive path forward in collaboration with all stakeholders.”
“We agree with Governor Newsom — AG Bonta got it wrong,” said J.T. Foley, Executive Director of the Coalition for Fantasy Sports. “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.”
While online sports gambling specifically is illegal in California, tribes and some lawmakers have asked for the legal opinion, noting fantasy sports has been a legal gray area. Online fantasy sports platforms have been operating in California for more than a decade and generate billions of dollars.
“While the California Nations Indian Gaming Association (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,” said James Siva with CNIGA. “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.”
Through online fantasy platforms, users pay to enter a contest and can win money or a prize depending on the professional athletes they pick and how well the athletes perform. During football or baseball season, for example, participants can use their knowledge of the athletes and the sport to pick their fantasy team of players who could help them win a prize.
In 2023, Republican State Sen. Scott Wilk sent a letter to the California Department of Justice requesting the legal opinion on daily fantasy sports. It followed the 2022 election in which voters overwhelmingly rejected a measure to legalize online sports betting.
Wilk noted that when it comes to online fantasy sports, how well the athletes perform during a game is completely out of the participant’s control and could be a game of chance.
Wilk noted in his letter that under California law, no one may operate “any game of chance” without the required federal, state and local licenses.
“Daily fantasy sports appears to be a game of chance not otherwise permitted by the laws of California,” Wilk wrote.
Read Wilk’s letter here.
Wilk termed out of the State Senate last year, and Republican Assemblyman Tom Lackey took over the effort to get legal clarity.
“We appreciate the Attorney General weighing in with his legal opinion on this important issue,” Lackey said in a statement on Thursday. Given the gravity of the matter, a formal challenge is likely – and that’s a welcome step. Legal debate is essential to a healthy democratic republic.”
Bonta is California’s first attorney general to weigh in on the issue. Requests for the legal opinion on online fantasy sports had gone unanswered and date back to 2015, when Kamala Harris was attorney general.
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