From the sound of it, DraftKings and FanDuel didn’t build any trust in California this week.
State Attorney General Rob Bonta on July 3 issued an opinion that strongly reads that his office does not consider daily fantasy sports to be legal in California. The opinion is not law, and so far has also not been enforced.
DraftKings, FanDuel, and other commercial operators continue to try to woo California tribes in the hopes of partnering for legal digital sports betting in the future. As part of the courtship, tribal attorney Scott Crowell said Wednesday that representatives from the Sports Betting Alliance (SBA), which includes DraftKings and FanDuel, were at a meeting at the Pechanga Casino Resort in June where they indicated that they would not “operate any illegal gaming” in the state.
Both DFS platforms are still live.
“I was at one of these SBA meetings in Temecula (Pechanga) week before last, and the rumors were out that the attorney general’s opinion was going to come out,” Crowell said. “But DraftKings and FanDuel were in the room and they were expressly asked, ‘If this opinion says DFS is illegal, are you going to cease your operations of DFS in California?’ And they responded that they were not going to operate any illegal gaming in California. And now that the opinion is out, they are announcing that they have every intention to continue to operate.
“For those that think DraftKings and FanDuel have suddenly seen the light in terms of working with California tribes, heed what is actually going here. They’re two of the largest operators of DFS in the state, DFS has now clearly been identified by the attorney general to be illegal, and they have announced that they have every intention to continue to operate those games.”
Crowell was speaking on a New Normal webcast title “Closing the Loopholes in California: Tribal-Led Efforts to Rein in Fantasy Sports and Sweepstakes Sites,” hosted by Indian Gaming Association (IGA) Conference Chair Victor Rocha and IGA Executive Director Jason Giles. Tribal attorney Joe Webster was also on the webinar.
California’s tribes are currently fighting on multiple fronts to preserve the exclusivity to gaming they have under the Indian Gaming Regulatory Act and through compacts with the state. They contend that daily fantasy sports — which operate in a gray area in California — are illegal gaming. And last week, Bonta’s office agreed via a 30-plus page opinion defining DFS as gambling, and therefore, illegal in California.
Newsom’s comments also weren’t welcome
The state legislature would have to act to make DFS illegal, but an attorney general’s office can take enforcement action based on its opinion.
FanDuel, in particular, has been working for more than two years to convince California Indian Country to trust it. The SBA has repeatedly said that its end goal is to be able to offer digital sports betting in California. But the DFS issue complicates matters.
While Indian Country may have been looking for a sign, DFS in California today is not explicitly illegal.
“FanDuel operates DFS in accordance with state fantasy laws, just as we comply with the law in every jurisdiction where we offer products,” a FanDuel spokesperson told InGame.
It would be fair to say that DraftKings, FanDuel, or any other sports betting operator who also offers daily fantasy will carefully watch the landscape in California and other states entertaining bans on fantasy sports. Wagering regulators in every state have a provision forbidding licensees from operating illegally or working with unlicensed suppliers and vendors in other states.
Within hours of Bonta’s opinion being made public, Gov. Gavin Newsom voiced his dissent, when his office posted on X, “The AG, in his independent capacity, issued this opinion — not the Governor’s office. While the Governor does not agree with the outcome, he welcomes a constructive path forward in collaboration with all stakeholders.”
Crowell called Newsom’s comments “rhetoric out of the governor’s office.” He said Newsom’s comments are “an invitation to continue to do the illegal activity that has been going on when the purpose and intent of the opinion should be to bring this illegal gaming to an end.”
It’s not clear why Newsom weighed in on the issue, or what role he would have in discussions about the future of DFS. But host Rocha pointed to Newsom’s political aspirations — there has been wide speculation that he is considering a presidential run in 2028 — as the impetus. Newsom was in South Carolina this week, which Cal Matters reported should “remove any doubt” about his future plans.
“Listen, his whole strategy right now, he was just on Joe Rogan, he’s going to go on Theo Von, he’s going for the ‘bro vote,’ that’s what you’re seeing,” Rocha said.
DFS isn’t the only issue
What happens next with DFS in California remains to be seen, but Rocha said he believes the state is where “we expected them to make the stand … This is where they want to make their stand, and we’re ready to fight them.”
The DFS issue is just one of many the tribes are juggling. Tuesday, a bill supported by the tribes to ban sweepstakes gaming from California took its first step in the state Senate, and tribal leaders believe it can get through the state legislature this session. A lawsuit against the state’s card rooms is progressing through a state superior court, with the first hearing date set for Aug. 8. And California’s tribes have been front-and-center as tribes across the nation seek to have prediction markets banned from their reservations, if not altogether.
Amid the chaos, the tribes are also still working through what legal digital sports betting will look like. Tribal leaders have said they’re looking at 2028 or 2030 to run an initiative to legalize it. But between now and then, there will be other situations and opportunities during which commercial operators can make a statement.
