Underdog Fights Back Against California Fantasy Sports Ban

Underdog Sports is trying to hold off a legal move that could hurt its business in California. The company filed a lawsuit to stop the state Attorney General from publishing a legal opinion that could label paid fantasy sports as illegal gambling. With a big chunk of its revenue tied to California players, Underdog says the fallout would be major.

Good to know

• California makes up about 10% of Underdog’s total revenue.
• The Attorney General’s opinion could force paid fantasy platforms to shut down across the state.
• Underdog is asking for a court order to stop the opinion from being released for now.

Instead of waiting for the opinion to drop, Underdog Sports decided to act first. It took the matter to the California Superior Court, arguing that Attorney General Rob Bonta’s upcoming legal interpretation could shut down its operations in the state. The company wants a temporary court block to prevent the AG’s office from publishing anything until the legal process plays out.

At the heart of the lawsuit is whether the Attorney General is even allowed to issue this type of opinion. According to Underdog, there are three main problems. First, they say legal opinions are supposed to interpret laws, not act like investigations, which they claim the AG’s office did by spending 18 months digging into fantasy sports.

Second, Underdog questions the legitimacy of the original request for the opinion. Former Senator Scott Wilk asked for it back when he was still in office, but he has since termed out. That, according to Underdog, should make the request outdated and void.

Third, the company argues that decisions about enforcing laws and handling gambling violations fall under the executive branch—not the Attorney General’s domain. They say the AG’s involvement crosses a line.

The fantasy sports industry could take a major hit if the opinion gets published. Underdog and other companies might have to shut down in California altogether. While companies are pushing back, tribal gaming groups are backing the AG’s move. Groups like the California Nations Indian Gaming Association say the opinion is needed to protect consumers.

The Attorney General has not yet released the opinion, but according to Underdog’s lawsuit, the office has already written it and laid out plans to use it as a roadmap for possible enforcement actions or legislative changes in the future.