Underdog Sports Sues California AG Over Fantasy Sports Crackdown

Underdog Sports has filed a lawsuit against California Attorney General Rob Bonta, aiming to stop his office from issuing a formal statement that could declare daily fantasy sports (DFS) illegal in the state. The move comes just days before the AG is expected to release a formal stance on the legality of DFS contests, potentially as early as July 3.

California has long been a key market for fantasy sports, with companies operating in the state for over a decade. However, there has never been formal legislation regulating the sector, and the attorney general’s forthcoming announcement could reshape that status quo overnight.

Why Underdog Is Taking Legal Action

According to the lawsuit, Underdog argues that the attorney general doesn’t have the authority to issue such a statement in this case. The company claims the request, initially made in 2023 by a now-former state senator, no longer falls within the proper scope for a legal interpretation under state law.

The New York-based company is seeking a temporary restraining order (TRO) from the Sacramento Superior Court to prevent the AG from proceeding. Without court intervention, Underdog says it faces serious and immediate harm, including the loss of customers, investor confidence, and access to payment processors. The company also noted that around 10% of its total revenue currently comes from California.

At the Heart of the Dispute: Fantasy Pick'em Games

The AG’s expected announcement will likely target “fantasy pick’em” contests, where users predict athlete performances against the house. Bonta’s office reportedly views these games as similar to parlay bets offered by sportsbooks, making them potentially illegal under existing gambling laws.

Underdog disputes this interpretation, arguing that these games fall within the bounds of legal fantasy sports contests. The company cites examples from New York and Illinois, where courts ultimately dismissed similar legal positions taken by state attorneys general.

Industry Backing and Wider Implications

The Coalition for Fantasy Sports, which includes companies like Underdog, PrizePicks, Dabble, and others, has urged the Attorney General to consider the views of everyday Californians who have been participating in fantasy contests for years.

If the AG moves forward with this legal stance and potential enforcement, it could trigger a chain reaction impacting not only operators but also suppliers, tech providers, and users across the state. According to Underdog’s court filing, the AG’s office has already studied Texas as a precedent, where a similar finding led DFS companies to pull out of the market.

Other gaming stakeholders are watching closely. The outcome may shape future regulatory approaches to digital gaming platforms, including online casinos and sportsbooks.

What Happens Next

The court will now review the request for a temporary restraining order. If granted, it could delay or entirely block the AG’s statement from being released. If denied, DFS operators may be compelled to reassess their California operations in light of potential enforcement.

At the core of the dispute is a broader question: whether DFS should be regulated as a skill-based game or treated like gambling under state law. How the court responds may have a lasting impact not only on California’s fantasy sports landscape but on the national conversation around DFS regulation.