Underdog Fails to Block DFS Opinion in California

The legal battle over daily fantasy sports (DFS) in California just hit another milestone. A Sacramento County Superior Court judge has decided not to block the state’s Attorney General from sharing his legal take on DFS in California.

Good to know

• Underdog Fantasy tried to stop the opinion from being released but the court said no.
• Rob Bonta’s upcoming opinion may label all DFS contests illegal in California.
• PrizePicks already switched to a peer-to-peer model in response.

Judge Jennifer Rockwell denied Underdog Fantasy’s request to prevent Attorney General Rob Bonta from issuing a legal opinion on the status of DFS in the state. The decision means Bonta is free to move ahead and release his views, which are expected to be highly critical of the current DFS formats offered in California.

Underdog had sued both Bonta and the California Department of Justice on July 1. The company argued that his opinion could seriously harm an entire industry that, according to them, provides entertainment to millions of Californians. “It will cast a legal cloud over companies that organize digital fantasy sports contests and deter the businesses who make these contests possible by processing payments, hosting the platforms that Californians use to participate in digital fantasy sports and providing critical financing,” Underdog said.

Underdog also claimed that its DFS contests follow state rules and should be considered legal gambling under current law. The company believes that any statement suggesting otherwise would step beyond the Attorney General’s legal authority.

But Judge Rockwell did not agree. She said in her ruling that Bonta’s legal opinion “does not effect any change in the law.” She also pointed out that Underdog had more than enough time to respond earlier in the process, and she rejected the idea that a delayed filing was reason enough for immediate emergency relief.

Bonta is expected to publish his opinion soon. If he does say that DFS contests — whether peer-to-peer, against the house, or daily drafts — break California’s gambling laws, operators could face big decisions. In fact, PrizePicks, one of Underdog’s main competitors, already made a move. The company shifted its offerings to a peer-to-peer format, likely as a way to brace for what is coming.