California Attorney General to Ban Daily Fantasy Sports, Rumors Say

According to sources close to the California television channel KCRA, the California Attorney General Rob Bonta plans to ban all online daily fantasy sports (DFS).

Sources Say California AG Will Soon Ban Daily Fantasy Sports

The move would make California the first state in the nation to take such broad action against daily fantasy sports in the more than decade-long history of its operation in the US. KCRA’s industry source noted that this would render FanDuel’s and DraftKings’ widely used DFS platforms, which have operated for years without regulatory interference, illegal.

Attorney General Bonta’s office began reviewing the legality of daily fantasy sports in October 2023, following a request from former Senator Scott Wilk. However, this was not the first time the issue had been raised in California. Discussions around the legality of DFS in the state date back to at least 2015, when a surge in advertising brought the industry to the attention of lawmakers, attorneys general, and gaming regulators nationwide. A final decision is expected by July 3.

Tribal Organizations Warn Against DFSs

The news comes after two tribal advocacy groups – the California Nations Indian Gaming Association (CNIGA) and the Tribal Alliance of Sovereign Indian Nations (TASIN) – sent a letter to the state legislature. In it, they warned that daily fantasy sports operators were preparing to introduce legislation aimed at legitimizing their operations.

The letter urged lawmakers to refrain from making any commitments or sponsoring legislation until the Attorney General issued his opinion, emphasizing the importance of clear legal guidance for all stakeholders, including the Legislature, before moving forward. It also warned that if a bill were introduced prior to the release and full evaluation of the Attorney General’s opinion, the groups would be compelled to oppose it.

Are There Potential Dangers to Banning DFSs?

Cracking down on the gray area of daily fantasy sports could push potential DFS players toward illegal gambling alternatives. Pick’em platforms like PrizePicks and Underdog Fantasy have allowed Californians to create parlay-style entries while the state remains without legal sports betting. Tribal groups anticipate that the earliest possible appearance of a sports betting measure on the ballot would be 2028, following a costly campaign that defeated the last effort in 2022.

If all DFS platforms are shut down and lawmakers also move to ban sweepstakes operators, Californians may be left with limited options. This could steer them either to regulated prediction markets like Kalshi or to offshore, unlicensed sportsbooks. Speaking of the popular prediction market platform and tribal organizations, recently, tribes backed Maryland regulators’ legal battle against Kalshi. This arguably serves as proof that tribal gambling organizations might have something to lose if California bans DFSs, pushing potential clients to platforms like Kalshi.