In advance of the expected release of an opinion this week regarding the legality of daily fantasy sports in California, one of the leading DFS companies, the Atlanta-headquartered PrizePicks, has modified which games it is offering to patrons in the state.
Previously PrizePicks had made its Pick’Em product available in the Golden State, but as of Tuesday, as first reported by The Closing Line and members of the PrizePicks subreddit, the platform has redirected users to its Arena product.
The key difference is that Pick’Em postures users against the house, while the Arena product is a peer-to-peer game. In both versions, users are making selections based on players’ statistical performance in various sporting events.
“We’re excited to now offer Arena to players in California,” PrizePicks spokesperson Elisa Richardson confirmed to InGame. “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.”
Offense versus defense
PrizePicks competitor Underdog Fantasy also undertook a preemptive strike this week, although in the legal and not the product realm.
On Monday, Underdog filed an emergency petition in California Superior Court seeking a preliminary injunction and writ of mandamus to block the release of a legal opinion from Attorney General Rob Bonta.
In its brief supporting the motion, in which the company warned of an “existential threat” to the business, the company wrote:
Underdog subsequently confirmed, through a conversation between the Attorney General’s office and Underdog’s counsel, that the opinion is indeed about to be released this week. (Gringer TRO Decl. § 3.) Moreover, the opinion will be “very broad” in its applicability, finding all daily fantasy sports to be illegal under California law. Id. Although “daily fantasy sports” is not itself a defined term, (see infra 14), any opinion prohibiting all daily fantasy sports would purport to encompass a significant portion of Underdog’s fantasy contests. And that is the plan. The Attorney General’s office confirmed that after releasing the opinion, the goal would be to use the threat of an enforcement action — under the interpretation of California law that the Attorney General will impermissibly announce in the opinion — to pressure Underdog into agreeing to leave California entirely.
The crux of the legal argument is that AG Bonta, if he were to issue the opinion that is still expected this week (as of midday Wednesday), he would necessarily have to make findings of fact, when Underdog says the AG office is only authorized to issue opinions based in matters of law — and further that the person who requested the actual opinion, 18 months ago, former Sen. Scott Wilk, is no longer in office.
As for the impetus for the AG opinion, Underdog writes:
The opinion, which Bonta’s predecessors declined to issue, will satisfy only one constituency, a small handful of the powerful tribes that maintain a monopoly on gaming in the State. On information and belief, the tribes have met numerous times with Attorney General Bonta and his representatives and lobbied for the opinion to be issued.
It is possible that Underdog, too, may pivot to an exclusively peer-to-peer format in California, but for the time being appears to be proceeding on the legal track. The California tribes, too, have been very busy on the legal and legislative front, as they are currently engaged in legal matters involving prediction markets, sweepstakes casinos, and cardrooms, among others.
