Underdog Sports has filed a request for a California court to enjoin the state’s attorney general from issuing an expected opinion on the legality of daily fantasy sports contests. Earlier reporting has suggested that Attorney General Rob Bonta will release the opinion soon and that it will be an unfavorable one for companies like Underdog.
As Underdog’s filing with the court points out, California represents a substantial portion of potential DFS game players. With this filing, the litigation over DFS in California has officially begun.
Underdog asks court to intervene
Underdog filed its request for a TRO (temporary restraining order) in the Superior Court for Sacramento County on June 30. The motion claims that Bonta “will issue an opinion later this week that will decimate fantasy sports in California” and that the court must intervene “to preserve the status quo that has persisted in California for decades.”
Underdog and many other enterprises allow Californians to access DFS games with real money prizes, as California law is mostly moot on the legality of such contests. These games take several formats, including a “pick’em” game against the house that resembles parlays that sportsbooks offer.
Bonta’s potentially forthcoming opinion on DFS stems from a request from former California Sen. Scott Wilk in 2023. On June 25, Ashley Zavala of KCRA reported that Bonta plans to release the opinion on July 3 and that the opinion will be that all real-money DFS games violate California law.
There will still be important considerations around how Bonta defines DFS in his opinion, if he does indeed issue it, and the opinion follows Zavala’s reporting. Underdog isn’t waiting to read the opinion’s contents, however.
Underdog claims opinion could irrevocably harm business
In its brief, Underdog states that players in California contribute over 10% of the company’s revenue from DFS games. Underdog adds that the reported opinion “will jeopardize Underdog’s ability to operate in California and permanently undermine Underdog’s business interests.”
Underdog states that “the legal uncertainty the opinion would create would also cause Underdog to face challenges in obtaining services from the third-party providers, suppliers, and vendors that it relies on,” as “California is such an important market that investors and other industry insiders pay close attention to developments in the state.”
California is the most populous state in the United States and home to the world’s fourth-largest economy, according to the International Monetary Fund. While Underdog has taken the first step with this move, the litigation involving DFS in California is only beginning.
The debate over the legal status of DFS in the state may include other officials in California soon, too.
DFS operators could seek relief in state legislature
The report of Bonta’s forthcoming opinion closely follows a letter from tribal casino operators to the California legislature regarding the legality of DFS contests. The letter claimed that DFS operators are pushing for new legislation that would make their games explicitly legal and that tribal gaming authorities within California would oppose such bills.
Should Underdog’s request for a TRO fail, and the opinion be as damaging as Underdog claims, the legislature would be a natural destination for the efforts of fantasy sports providers seeking to render the opinion moot. At this point, though, there are no bills regarding the legality of DFS in the California capitol.
Court battles and legislative debates on that subject could stretch for years in California. With Underdog’s TRO, the process has officially begun.
