Underdog Fantasy on Monday asked a Sacramento Superior Court to block California Attorney General Rob Bonta from releasing an opinion that’s expected to greatly limit or perhaps ban daily fantasy sports in the state.
Underdog is seeking a temporary restraining order to stop the opinion from being released, a preliminary injunction and a writ of mandate arguing that Bonta doesn’t have the authority to issue what’s expected to be a sweeping anti-DFS opinion.
Among Underdog’s filings was a passage from attorney David Gringer referencing a June 26 communication with the attorney general’s office in which it he claims Bonta was prepared to issue an opinion “finding that digital fantasy sports platforms are illegal in California. The representative stated that the opinion would be released no later than July 3, 2025, and that it would be ‘very broad’ in scope.”
Core to Underdog’s contention is that the State of California has not clearly defined whether DFS constitutes illegal gambling, which it believes renders Bonta’s opinion beyond his purview. While Bonta’s opinion would not be law, attorneys general are considered to have strong sway in the California legal system.
Underdog claims in court documents that the goal of the AG office after issuing the opinion would be to “pressure Underdog into agreeing to leave California entirely.”
That would be a financial blow for Underdog, which claimed in court documents to derive 10% of its revenue from California players. The company noted in court documents the financial harm suffered by competitors DraftKings and FanDuel by being forced to vacate other states:
“The fallout from an attorney general’s opinion on the legality of fantasy sports is unmistakable: FanDuel and DraftKings, two of Underdog’s competitors, faced such significant financial and legal pressures in the wake of an attorney general opinion in Texas and a cease-and-desist letter in Alabama that they were forced to withdraw all of their paid products from the states.”
Because the company relies on California for such a substantial portion of its revenue, Underdog concluded, “the stakes for Underdog’s business in California are existential, and irreparable harm is likely to flow from the opinion in the absence of an injunction [to stop the release of Bonta’s opinion].”
An Underdog spokesman told InGame and multiple outlets that Bonta’s eventual opinion would be “flawed because it has to rely on factual determinations the opinion process cannot and should not resolve, according to California law.”
Legal analysis of Underdog’s moves
John Holden, associate professor, Department of Business Law and Ethics at the Kelley School of Business at Indiana University, provided this comment on the matter to InGame:
“I think this is a step that really costs Underdog nothing, other than money in legal bills. Regardless of what happens, there is a lot more litigation to come.
“Blocking the release of the letter, as they are requesting, would likely preserve the status quo, but even if they don’t block it from being released, they can race to court and seek to get a temporary restraining order blocking enforcement.
“The challenge at this stage is no one outside the AG’s office actually knows what the letter says, so you’re asking a judge to block something based on what you have heard.
“Judges tend to want to know what they’re ruling on. This may be an obstacle for Underdog, but again, this is hardly the last opportunity to challenge this rumored opinion.”
Inside Underdog’s assertions
A “broad” opinion would presumably impact traditional season-long league fantasy contests and daily fantasy play, as well as so-called pick-’em style contests — both peer-to-peer and against the platform — that have drawn the most scrutiny in California and nationally. This latter type of market allows players to wager the over or under on player performance against the platform, making them similar to sportsbook parlays.
DFS sites have complied in other states, to varying degrees, when pressured by state authorites. PrizePicks, for example, altered the types of DFS contests it offered in Florida when it, Underdog, and Betr were served with cease-and-desist orders in December.
Underdog also noted that the previous two California attorneys general, Kamala Harris and Xavier Beccera, did not issue opinions although the legality of DFS has long been an issue in the nation’s most populated state and a lucrative market for fantasy operators.
The Underdog statement continued: “Attorney General Bonta has been in office for more than four years without questioning fantasy sports games. We are optimistic the law will be followed and are confident in the legality of fantasy sports in California. If a negative opinion is issued, fantasy sports will prevail on the merits, no different than in New York and Illinois where courts rejected the similarly wrong opinions of those states’ attorneys general.”
