Underdog Sports activities, a outstanding operator within the fantasy sports activities trade, has filed a lawsuit in Sacramento Superior Court docket in an effort to cease California Legal professional Common Rob Bonta from issuing a authorized opinion that would declare digital fantasy sports activities platforms illegal within the state. The transfer is available in anticipation of a extensively anticipated opinion that, if revealed, might have far-reaching penalties for Underdog and related platforms providing paid fantasy sports activities contests.
This authorized problem precedes the precise launch of Bonta’s opinion, which the Legal professional Common’s workplace has steered might arrive by July 3. In response to Underdog’s filings, the anticipated steering would undertake a broad interpretation, successfully deeming most types of each day fantasy sports activities (DFS) as unlawful beneath state legislation—a transfer that would destabilize the trade inside California’s borders.
Core Authorized Arguments Towards the AG’s Opinion
Underdog’s authorized crew is requesting the courtroom to challenge a brief restraining order, a preliminary injunction, and a writ of mandate to forestall Bonta from releasing the opinion. In response to paperwork revealed by The Closing Line, the corporate argues that the Legal professional Common lacks the statutory authority to challenge such a ruling beneath California Authorities Code Part 12519. The legislation, they assert, limits the AG to issuing authorized opinions which are based mostly solely on questions of legislation and that should pertain to the duties of the official requesting the opinion.
Underdog emphasizes this distinction in its courtroom submitting:
“Absent reduction from this Court docket, Legal professional Common Rob Bonta will challenge an opinion later this week that can decimate fantasy sports activities in California. Legal professional Common Bonta needs to be enjoined from doing so, not as a result of he’s incorrect in his views on the legality of fantasy sports activities — although he actually is — however as a result of by statute, the Legal professional Common can solely challenge opinions on questions of legislation and may solely reply questions that relate to the duties of the official requesting the opinion. Neither is true right here.”
The transient additionally challenges the validity of the unique request that prompted the opinion. It notes that former State Senator Scott Wilk—who initiated the inquiry into the legality of DFS—has since left workplace because of time period limits in 2024. As such, Underdog contends the request not holds authorized weight, and issuing an opinion now would set a troubling precedent, permitting outgoing legislators to affect coverage properly after their tenure has ended.
Additional, Underdog argues that the underlying query at hand ventures into prosecutorial territory, which falls inside the area of the chief department, not the legislative. As a result of the query includes potential enforcement and fact-finding, Underdog asserts that it falls outdoors the purview of the AG’s advisory function.
Underdog: Enterprise at Threat, Business Influence Imminent
Underdog’s lawsuit claims that the forthcoming opinion poses an existential risk to its operations in California, which account for about 10% of its complete income. In authorized filings, the corporate cited conversations with representatives from Bonta’s workplace who allegedly said that the workplace intends to make use of the opinion as leverage, threatening enforcement actions to stress Underdog to stop providing its providers within the state.
“The Legal professional Common’s workplace confirmed that after releasing the opinion, the purpose can be to make use of the specter of an enforcement motion—beneath the interpretation of California legislation that the Legal professional Common will impermissibly announce within the opinion—to stress Underdog into agreeing to depart California fully,” one submitting revealed.
Underdog additional referenced the authorized fallout from a 2016 Texas opinion issued by Legal professional Common Ken Paxton, which led FanDuel to drag its DFS merchandise from that state. Whereas FanDuel ultimately reentered the Texas market in 2018, Underdog’s transient factors to this precedent as proof of the damaging ripple results such opinions may cause.
The corporate’s authorized crew argues that the opinion course of shouldn’t be used as a mechanism for conducting investigations or fact-finding missions, one thing they imagine Bonta’s workplace has performed over the previous 18 months. Throughout that point, the AG’s workplace reportedly consulted varied DFS operators, solicited trade enter, and examined market practices—actions Underdog claims transcend deciphering present legislation.
Firm Expresses Confidence in Authorized Standing
Regardless of the excessive stakes, Underdog maintains its confidence within the authorized standing of its fantasy sports activities choices in California. An organization spokesperson said to The Closing Line:
“Any potential opinion is flawed as a result of it has to depend on factual determinations the opinion course of can not and mustn’t resolve, in response to California legislation. The final two Attorneys Common, Kamala Harris and Xavier Beccera, didn’t challenge opinions, and Legal professional Common Bonta has been in workplace for greater than 4 years with out questioning fantasy sports activities video games. We’re optimistic the legislation might be adopted and are assured within the legality of fantasy sports activities in California. If a damaging opinion is issued, fantasy sports activities will prevail on the deserves, no completely different than in New York and Illinois the place courts rejected the equally incorrect opinions of these states’ attorneys normal.”
On the middle of the authorized storm are Underdog’s fantasy decide’em contests, which require customers to foretell the statistical performances of gamers in real-world video games. Although much like parlay sports activities betting in format, Underdog contends these video games depend on ability and are protected beneath present fantasy sports activities laws.
Outlook Forward of July Deadline
In response to lawyer David Gringer, who represents Underdog, a consultant from the AG’s workplace confirmed throughout a June 26 dialog that the opinion can be launched no later than July 3 and would broadly declare digital fantasy sports activities unlawful in California.
Gringer’s declaration additionally detailed how the AG’s workplace has taken cues from Texas’s authorized mannequin, utilizing related authorized interpretations to drive DFS operators out of state markets. The assertion claims Bonta’s crew is following a comparable technique, which might lead to Underdog—and probably different operators—exiting the California market.
The following steps now relaxation with the Sacramento Superior Court docket, which should resolve whether or not the Legal professional Common’s workplace needs to be allowed to proceed with issuing the opinion or whether or not Underdog’s arguments about authorized overreach maintain sufficient weight to delay or block its publication. Because the July 3 deadline nears, the end result of this dispute might have important penalties for the way forward for paid fantasy sports activities in California—and probably past.
