Daily fantasy sports (DFS) specialist Underdog Fantasy has launched a preemptive lawsuit as California prepares to block paid fantasy sports. The legal motion hopes to block the attorney general’s action against fantasy sports.
The Underdog Opposes California’s Attorney General
Underdog Fantasy, which is one of the big players in the US DFS market, has struck back against a motion that would outlaw paid fantasy sports. The original measure came in response to an opinion from the California Attorney General Rob Bonta, which followed an earlier investigation into the legality of the sector and was reportedly prompted by tribal pressure.
If enacted, the opinion would make California the first US market to take such broad action against DFS operators.
As mentioned, Underdog’s lawsuit seeks to block the motion to ban DFS offerings.
Underdog Says AG Will Poison a Beneficial Industry
In its lawsuit, Underdog argued that the AG’s opinion will “poison a thriving industry that serves millions of Californians.” The company asserted that this would deal a huge blow to the economy, squandering important investments and jeopardizing hundreds of jobs. In addition to that, banning DFS would deprive millions of Californians of a pastime they enjoy.
Underdog further argued that the AG should not have the authority to issue the opinion due to existing limits on his power. The operator postulated that the ban is the result of intense lobbying from tribal entities that wish to undermine their competition.
Regardless of whether that is the case or not, tribal representatives hailed the AG’s opinion. Slamming DFS as illegal gaming, the California Nations Indian Gaming Association said that banning such products will ensure that the law is followed and violators are held to account.
Bonta’s predecessors likewise faced the DFS conundrum but opted not to make any drastic decision. The current AG’s stance, therefore, contrasts with the US’s generally friendly stance on fantasy sports.
Betting Alternatives Face Pushback
Daily fantasy sports are only one of multiple controversial products that have proliferated across America. Other betting alternatives, such as prediction markets and sweepstakes, have faced much more intense scrutiny as multiple states have sought to block them.
Sweepstakes, for example, have experienced explosive growth, thus attracting the ire of state regulators who have accused them of exploiting obvious loopholes to avoid regulation. While some sweepstakes companies have firmly stated that they would be okay with operating in a regulated market and following certain rules, most states have largely preferred to outright reject the vertical.
Prediction markets, on the other hand, have skyrocketed in popularity thanks to their election-related products. As companies regulated by the Commodity Futures Trading Commission (CFTC), prediction market operators have insisted that their products are legal. However, state regulators and tribal entities in multiple states have slammed them as unregulated sports betting and have asked the CFTC to take appropriate action.