California, one of 12 states that doesn’t have a legal sports betting market, is set to ban daily fantasy sports contests.
California Attorney General Rob Bonta is expected to announce the decision to outlaw DFS operators within the upcoming days, KCRA-TV reported.
That could lead to billions in losses for operators who have been in California for more than a decade.
An investigation into DFS platforms was opened in October 2023 at the request of former Sen. Scott Wilk (R-21), one year after local voters rejected legal sports betting measures Proposition 26 and 27.
Legislation to legalize DFS may be on hold
A spokesperson for the Coalition for Fantasy Sports (CFS) said Bonta's action could be catastrophic for Californians and DFS platforms.
"We hope the Attorney General's Office will consider the views of sports fans across the state before making a decision. Californians have been playing daily fantasy sports games for more than a decade, and it is shocking to think that the state would suddenly take them away.”
DFS is not the same as sports betting. The latter is considered a game of chance, as users place wagers on teams, players, and final outcomes of games. DFS is considered a game of skill. Users draft virtual teams of real-life players then compete against others based on the statistical achievements of the players on their roster. Success is more about strategy and player selection with DFS.
Pick'em games, which have become popular at DFS sites, blurs the line a bit.
California lawmakers have been considering legislation to make DFS legal.
With the AG's expected ruling in mind, The California Nations Indian Gaming Association (CNIGA) and the Tribal Alliance of Sovereign Indian Nations on Monday co-authored a letter that encouraged lawmakers to hold off on potential DFS legalization, KCRA-TV reported.
The letter reads in part:
“Despite this pending opinion, some fantasy sports interests are already approaching members of the Legislature to author and/or support a bill on this issue. We respectfully urge you to withhold any commitments or authorships until the Attorney General releases his opinion.”
California’s anti-gambling direction
In January 2024, CNIGA penned a letter to Bonta that expressed concern over DFS mimicking prop parlays, according to Legal Sports Report.
The group highlighted three reasons they believed DFS platforms were acting as sportsbook operators:
– Pick’em games do not constitute managing a fantasy or simulation sports team
– Pick’em games often permit participants to place a single bet on the performance statistics of two athletes who participate in two completely different types of sporting events
– In the operation of pick’em games, some operators allow participants to play against the ‘house’
Wilk also previously pointed out that athletes’ performances were out of gamblers’ control, making betting on them a game of chance, which is outlawed by California law.
Notably, DFS operator PrizePicks agreed to partnership deals with MLB's Los Angeles Dodgers this month and with the San Francisco Giants and San Diego Padres in April.
Meanwhile, a bill to ban sweepstakes casinos is advancing in the California Assembly. That would leave gamblers in the Golden State with few legal options despite the national trend of legalization and the state's largest-in-the-US population.