In a high-stakes legal maneuver, Underdog Sports has filed a lawsuit against California Attorney General Rob Bonta, seeking to prevent his office from issuing a legal opinion that could label daily fantasy sports (DFS) as illegal in the state. The New York-based DFS operator is also seeking a temporary restraining order in anticipation of what many expect to be a sweeping crackdown on the industry.
According to reports, Bonta’s office is poised to release an official opinion by July 3, which could drastically alter the legal landscape for fantasy sports operators in California, one of the most lucrative markets in the U.S.
DFS Faces Legal Threat in a Key Market
Daily fantasy sports contests have operated in California for over a decade without direct regulatory interference. But things began to shift in October 2023, when then-State Senator Scott Wilk asked Bonta’s office to review the legality of DFS contests, particularly newer pick ’em-style games that resemble traditional sports bets.
These pick’em contests involve users predicting how two or more athletes will perform in comparison to projections—a format critics argue mirrors parlay bets offered by legal sportsbooks.
While Bonta has yet to issue a formal opinion, Underdog Sports argues that the Attorney General is preparing to declare such games illegal under current California law, despite there being no official regulatory framework for fantasy sports in the state.
The company’s lawsuit asserts that such a decision would “poison a thriving industry” and cause significant financial damage not only to DFS operators but also to their payment providers, platform partners, and broader customer base.
According to Underdog, California represents 10% of its total revenue.
“Out of Bounds,” Says Underdog
In its court filing, Underdog doesn’t just challenge the potential content of Bonta’s legal opinion—it disputes his authority to issue one at all.
“Attorney General Bonta should be enjoined from doing so,” the company writes, “not because he is wrong in his views on the legality of fantasy sports—though he certainly is—but because by statute, the Attorney General can only issue opinions on questions of law and can only answer questions that relate to the duties of the official requesting the opinion.”
Underdog contends that neither of those conditions are satisfied in this case, since the original request came from a legislator who is no longer in office.
The lawsuit also accuses Bonta’s office of using the threat of enforcement as a coercive tactic to pressure Underdog and other operators into ceasing operations in the state.
Industry Pushback Builds
The reaction to the looming legal opinion has been swift and vocal.
In a statement to The Closing Line, an industry newsletter, Underdog reaffirmed its belief in the legality of DFS under California law. A spokesperson said any negative opinion “would be flawed” and rely on “factual determinations the opinion process cannot and should not resolve.”
They pointed out that neither of Bonta’s predecessors—Kamala Harris nor Xavier Becerra—took similar action during their terms, even as the DFS industry expanded dramatically across the country. Bonta himself has held office for more than four years without raising public concerns over the legality of fantasy sports.
Underdog’s statement draws comparisons to previous legal battles in New York and Illinois, where courts ultimately rejected similar efforts by state attorneys general to outlaw fantasy sports.
“We are optimistic the law will be followed and are confident in the legality of fantasy sports in California,” the spokesperson said. “If a negative opinion is issued, fantasy sports will prevail on the merits.”
Coalition Urges AG to Consider the Fans
The Coalition for Fantasy Sports—a group that includes operators like Betr, PrizePicks, Dabble, Splash Sports, and Underdog—also weighed in on the situation. In a statement provided to KCRA 3, the coalition urged Bonta to consider the voice of the public.
“Californians have been playing daily fantasy sports games for more than a decade,” the coalition said. “It is shocking to think that the state would suddenly take them away.”
The group emphasized that fantasy sports contests are a key form of entertainment for sports fans and that any abrupt legal reversal would be out of step with public sentiment.
What’s Next for DFS in California?
If Bonta proceeds with the opinion, it would not carry the same legal weight as a court ruling or legislative action, but it could trigger enforcement by local prosecutors or the Department of Justice. That risk has forced Underdog to act swiftly in court, preempting a potential wave of cease-and-desist letters or even criminal penalties.
Should the court grant Underdog’s temporary restraining order, it could buy the industry time to challenge the AG’s position more formally in court. If not, DFS operators may have to choose between pulling out of California or facing legal consequences.
With no current legislation in place to explicitly regulate or prohibit DFS in California, the outcome of this legal standoff could set a precedent for other states where fantasy sports still operate in a legal gray area.
A Legal Gamble with National Implications
The stakes of this lawsuit go far beyond California’s borders.
The DFS industry has long been considered legally distinct from traditional sports betting, thanks to its classification as a “game of skill” under the Unlawful Internet Gambling Enforcement Act (UIGEA). However, the rapid evolution of pick’em-style contests has blurred that distinction in the eyes of some regulators.
If California—home to nearly 40 million residents—effectively bans these games, it could embolden other states to revisit their own positions on DFS, particularly those that have not passed legislation explicitly legalizing the practice.
Underdog’s lawsuit is, in essence, a bet that the courts will step in before regulators can sweep the legs out from under one of fantasy sports’ most profitable markets.
As of now, all eyes are on Sacramento—and the clock is ticking.
- SCCG Management. The Gambling Industry’s Global Connector. Access Here.
- Source: https://sportshandle.com/underdog-sports-sues-california-ag-to-protect-fantasy-sports-2025/