Daily Fantasy Sports Illegal in California, Says the AG

By John Allaire and Brian Schaller

As we anticipated in our recent article, the California Attorney General’s office released a legal opinion taking the position that all forms of Daily Fantasy Sports (“DFS") are illegal under California’s Penal Code section 337a as sports wagering (both “traditional” DFS and “Pick ‘Em”-see here for a description of these games).

Section 337a(a)(6) makes it a crime for a person to lay, make, offer, or accept “any bet or bets, or wager or wagers, upon the result, or purported result, of any trial, or purported trial, or contest, or purported contest, of skill, speed or power of endurance of person or animal, or between persons, animals, or mechanical apparatus.” The opinion concludes that DFS constitutes wagering due to its reliance on real-world athletic performances, which introduces significant elements of chance beyond participants’ control. The opinion did not make any conclusions on whether DFS games also violate California’s lottery prohibition, as the AG believes that determining whether skill predominates over chance would require factual determinations outside the scope of an AG opinion.

The opinion creates significant uncertainty for DFS operators in California, and it remains to be seen whether existing operators will continue do business in the state. Underdog and DraftKings have reportedly made statements that they intend to continue offering daily fantasy sports games for now.

Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE.