Daily Fantasy Sports ILLEGAL in California, per AG opinion
Published:
Jul 2, 2025
,
1:56 p.m.
ET
Updated:
Jul 3, 2025
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06:04 p.m.
ET
Key Points:
California Attorney General Rob Bonta released an opinion on Thursday, July 3, declaring online daily fantasy sports illegal in the state.
The opinion is expected to affect a wide range of fantasy sports formats, including daily fantasy pick’em and traditional DFS.
While the opinion is not legally binding, it may lead to legal action, enforcement or operators needing to withdraw from the market.
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For over a decade, Californians have participated in daily fantasy sports (DFS) and fantasy pick’em contests. But that may soon change. On Thursday, July 3, California Attorney General Rob Bonta released a legal opinion declaring real-money online daily fantasy sports illegal under state law. This move could fundamentally reshape the fantasy sports landscape in the most populous state in the U.S.
The opinion confirmed that pick’em style, draft-style and peer-to-peer DFS contests are ALL illegal under state law.
“Yes, 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,” reads the opinion. “… We conclude that daily fantasy sports games, including both pick’em and draft style games, are prohibited by section 337a because they involve betting on sporting events.”
Which types of fantasy sports are now in danger in CA?
There are several distinct formats of online fantasy sports, and the opinion went to great lengths to distinguish between them.
“Against-the-house” DFS Pick ‘Em products
Sometimes called "DFS 2.0," this model allows users to pick multiple outcomes related to player performances (e.g., will LeBron James score more than 25.5 points? And will Luka have over 5 rebounds?). The user competes against preset projections created by the platform, making it more akin to a prop bet parlay. Terms like “higher/lower” replace “over/under,” and DFS operators often present lineups to justify legality, but critics argue these are simply semantics masking sports wagering.
Platforms like PrizePicks and Underdog operate in this space. Some regulators argue these contests resemble traditional gambling since outcomes are fixed by the house, not peer-based.
Peer-to-peer fantasy games
These are pick’em-style contests where users compete directly against other users rather than the operator. DraftKings Pick 6, PrizePicks Arena and FanDuel Picks fall into this category. While this format is less like gambling in structure, it still raises questions about legality if entry fees and prize pools are managed by a platform.
Traditional DFS
These contests involve creating lineups under a salary cap and competing in pools or head-to-head formats, and DraftKings and FanDuel built their businesses on this model. Though more skill-based and long accepted in many states, the California AG’s opinion may still lump these contests into the illegal category, particularly if they include entry fees and financial payouts.
Online, real-money fantasy
Yahoo and CBS offer season-long leagues where they handle entry fees and distribute prize money, blurring the line between casual fantasy play and regulated contests. While most informal leagues among friends (where finances are handled outside the platform) are likely safe, paid-entry prize leagues run by online platforms may be impacted by the opinion.
Is Traditional Fantasy Football At Risk?
Most season-long fantasy football leagues run privately among friends and family, with finances handled offline or via third-party services like Venmo or CashApp. These free-to-play or privately organized leagues are unlikely to be affected by the AG's opinion.
However, platforms that manage payments, prize pools and entry fees directly could be impacted, especially if the opinion categorizes those services as facilitating illegal gambling. Some platforms already exclude certain states based on existing laws, and California could join that list.
Why Now?
Bonta’s office started looking into the legality of DFS in October 2023 at the request of former Sen. Scott Wilk.
Additionally, tribal gaming interests have played a major role in pushing for legal clarity. Groups like the California Nations Indian Gaming Association and the Tribal Alliance of Sovereign Indian Nations recently sent letters to lawmakers warning about the spread of unregulated gaming.
These groups argue that unregulated fantasy sports platforms threaten consumer protection and tribal economic interests. Their lobbying efforts may finally be bearing fruit.
Additionally, fantasy operators like PrizePicks and Underdog have become increasingly aggressive in California, striking sponsorship deals with major league teams and growing their market share. This increased visibility may have accelerated calls for regulation and/or strong nudges from lobbying groups.
Underdog tries, fails to block Attorney General opinion
In a major escalation, Underdog Fantasy has filed a lawsuit in Sacramento County Superior Court against Bonta, seeking to block the release of his legal opinion.
The suit, filed on July 1, argues that Bonta is overstepping his authority and relying on flawed reasoning to issue an opinion that could severely damage the fantasy sports industry. According to KCRA’s reporting, California accounts for over 10% of Underdog’s annual revenue, and a negative ruling could "decimate" its operations in the state.
Underdog’s filing alleges that Bonta’s office confirmed its intent to use the legal opinion to compel operators to exit the market. The company believes this action mirrors a strategy employed in Texas, where a past attorney general’s opinion led fantasy companies to withdraw.
Update July 1, 2025: A Sacramento Superior Court Judge has said she will take no action on Underdog's ex parte application for a TRO to block release of California AG's opinion on DFS contests, adding that Underdog needs to seek such relief in its other pending lawsuit where the main petition is filed.
Industry legal analyst Daniel Wallach posted an explanation after: “Underdog filed two lawsuits yesterday, but they filed the ex parte application for a TRO in the wrong case. Judge is telling them to file it in the other case, which is before a different judge (Jennifer Rockwell). Filing snafu by counsel may have burned a day.”
Update July 2, 2025: Underdog's efforts failed, and their requests were not granted. Therefore, AG Bonta went forward with releasing his opinion on Thursday.
PrizePicks also making moves?
PrizePicks appears to be changing its fantasy sports game in California. PrizePicks now offers its “Arena” product in the state, not its pick’em game, according to a page on their site detailing which games it offers in each location. Its original pick’em game is one player playing against the house; Arena is a peer-to-peer format. In both formats, users try to predict the performances of more than one player.
Elisa Richardson, VP of Communications for PrizePicks, offered a statement to Dustin Gouker’s newsletter The Closing Line: “We’re excited to now offer Arena to players in California. Arena has been incredibly well received by our community and we’ve seen continued growth as more players engage with this peer-to-peer format.”
On the PrizePicks site, “CA” now appears under Arena instead of under Pick’em. Additionally, California users on Reddit confirmed they are now being told they must play in Arena mode in CA as of yesterday.
As Gouker points out, “PrizePicks likely sees the P2P version of its contests as more defensible legally vis a vis the against-the-house version in California. The original form of pick’em against the house is logistically the same as placing a parlay at a sportsbook.”
Update - July 3, 2025:
The AG opinion also deemed the peer-to-peer versions of DFS contests illegal.
What’s next? What can Californians expect?
Now that Bonta has released the opinion, a few scenarios could unfold:
Some fantasy operators may continue serving Californians, particularly if the opinion is not accompanied by cease-and-desist letters.
Even without enforcement, payment processors may restrict transactions due to legal uncertainty.
The AG’s office could begin issuing cease-and-desist notices or seek judicial rulings to enforce its position.
In any case, this is only the beginning. Courts will likely be involved in interpreting the opinion and deciding whether to enforce action.
In fact, A spokesperson for Gov. Gavin Newsom states that the governor hopes the path forward includes collaboration with the operators.
“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.”
Problem Gambling help in California
Despite the differences between traditional fantasy sports, DFS and DFS 2.0, all these formats involve financial risk and the hope of monetary gain, which can lead to gambling addiction. The competitive nature of these games, combined with the thrill of potential financial rewards, can make it difficult for some individuals to stop playing, leading to financial strain and mental health consequences.
If you or someone you know needs help managing compulsive fantasy sports behavior, Birches Health offers virtual, confidential, evidence-based treatment to Californians.
To get started:
Call 833-483-3838
Email help@bircheshealth.com
