California AG Declares DFS Illegal, Gov. Newsom Begs to Differ

• Bonta says DFS contests qualify as illegal sports betting.
• Newsom rejects AG opinion, urges collaborative legal solution.
• DraftKings, PrizePicks already face DFS-related legal challenges.

California Attorney General Rob Bonta issued a formal legal opinion Thursday declaring daily fantasy sports (DFS) contests to be unlawful under state law.

While the DFS industry had anticipated this opinion, it still packed a punch. California is America’s most populous state and competes with New York as the largest DFS market in the country, worth an estimated $200 million annually.

Under California law, gambling is generally defined as betting activities where chance predominates. DFS operators argue their contests are games of skill.

Newsom Wades In

However, Bonta’s opinion rejects the distinction, asserting that DFS contests, regardless of their skill component, are “wagers” on the performance of third-party athletes. Thus, they fall under Penal Code § 337a, which criminalizes betting on contests of “skill, speed or power of endurance.”

What surprised many observers was the swift public repudiation of Bonta’s opinion by California Gov. Gavin Newsom.

The AG, in his independent capacity, issued this opinion — not the Governor’s Office,” Newsom spokesperson Izzy Gardon said in a statement to KCRA-TV. “While the Governor does not agree with the outcome, he welcomes a constructive path forward in collaboration with all stakeholders.”

Attorney general opinions are advisory and do not change existing law. But Bonta’s guidance carries significant weight and may reflect how DFS will be viewed by law enforcement. The opinion could spark civil lawsuits or prompt lawmakers to address the issue directly.

Two of California’s largest DFS operators, DraftKings and PrizePicks, are already facing federal class-action lawsuits alleging violations of § 337a through pool-based fantasy contests. Bonta’s opinion reinforces those legal arguments, which intensifies pressure on the industry.

‘Bonta Got It Wrong’

JT Foley, executive director of the Coalition for Fantasy Sports, pushed back on Bonta’s interpretation in a statement Thursday.

“We agree with Governor Newsom — AG Bonta got it wrong,” he told Casino.org. “[…] The law has not changed, a fact the last two Attorneys General, Kamala Harris and Xavier Becerra, recognized as they specifically declined any similar action.”

“We are hopeful the Attorney General heeds the Governor’s call to find a constructive solution that preserves the games that California sports fans love,” he added.