Fantasy Sports ILLEGAL in California? Potentially soon…
Published:
Jul 2, 2025
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1:56 p.m.
ET
Key Points:
California Attorney General Rob Bonta is expected to release an opinion by Thursday, July 3, declaring online fantasy sports illegal in the state.
The opinion could affect a wide range of fantasy sports formats, including daily fantasy pick’em and traditional DFS.
In anticipation of Bonta’s legal opinion, Underdog Fantasy has sued the AG on the grounds he has overstepped his authority, and they have asked the court to temporarily block the opinion from taking effect while the court decides.
Tribal gaming interests are among those pushing for clarification and enforcement.
While the opinion would not be legally binding, it may lead to legal action, enforcement or operators withdrawing 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. California Attorney General Rob Bonta is set to release a legal opinion declaring most, if not all, forms of real-money online fantasy sports illegal under state law. This move could fundamentally reshape the fantasy sports landscape in the most populous state in the U.S.
According to reporting from KCRA and other sources, Bonta’s opinion is imminent and is set to be released by July 3, 2025. Though advisory and not binding, the opinion will likely be treated with authority by regulatory bodies and could be used as a launching point for further legal action.
Which types of fantasy sports could be deemed illegal in CA?
There are several distinct formats of online fantasy sports, and the expected opinion may not distinguish between them. The following formats could be swept up in the decision:
“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. 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.
Opinion vs. Law
Fantasy sports is not explicitly mentioned in the California Penal Code. Instead, the state uses the "predominance test" to determine whether an activity qualifies as gambling. If chance plays a more significant role than skill in determining the outcome, the activity may be ruled illegal.
Former State Senator Scott Wilk and current Assemblyman Tom Lackey argue daily fantasy sports contests are largely games of chance. Wilk’s 2023 letter to the DOJ cited the lack of player control over athlete performance as evidence of this.
Despite this, fantasy sports operators have long relied on the federal Unlawful Internet Gambling Enforcement Act (UIGEA) for legitimacy. But, as many legal analysts have clarified, UIGEA is a payment-processing law, meaning it defers authority to California’s ambiguous state law.
Why Now?
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 sues 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.”
PrizePicks also making moves?
PrizePicks appears to be changing its fantasy sports game in California ahead of the expected opinion. 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.”
What’s next? What can Californians expect?
Once Bonta releases 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.
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
