DFS Operator Fights Back Against Legal Threat
Underdog Fantasy has filed a lawsuit in California to prevent state authorities from banning paid daily fantasy sports (DFS). The legal action targets a recent opinion from California Attorney General Rob Bonta, which suggests that paid fantasy contests may be considered illegal gambling under current law.
Industry Impact and Allegations of Political Influence
The lawsuit argues that banning DFS would disrupt a thriving industry, threatening significant economic contributions and jeopardizing hundreds of jobs. Underdog also claims such a ban would strip millions of Californians of a popular and lawful form of entertainment.
In the court filing, Underdog states that the AG’s move “poisons a thriving industry that serves millions.” The company further argues that the Attorney General may be overstepping his authority and suggests that lobbying efforts by tribal gaming interests could be influencing the decision.
Tribal Support and Legal Precedents
Tribal representatives, particularly the California Nations Indian Gaming Association, praised the AG’s stance, labeling DFS as illegal gaming and calling for stricter enforcement. Previous attorneys general have reviewed DFS but opted against taking legal action, making Bonta’s move a departure from past interpretations.
Broader Context: Regulatory Scrutiny Intensifies
This legal battle is part of a wider debate around emerging betting formats. Products like prediction markets and sweepstakes have also drawn attention from state regulators, with some jurisdictions seeking to ban or restrict them. Sweepstakes in particular have seen rapid growth and criticism over their use of legal loopholes to avoid gambling regulations.
Meanwhile, prediction markets—often tied to political outcomes and overseen by the Commodity Futures Trading Commission (CFTC)—have faced similar opposition. Critics, including tribal bodies and state officials, have labeled them as disguised sports betting and called for federal intervention.
California Could Set a National Precedent
If the AG’s opinion results in a ban, California would become the first U.S. state to outlaw paid fantasy sports on such a broad scale. The case may set a critical precedent not only for DFS but for other forms of digital wagering across the country.
