Daily Fantasy Sports and Sweepstakes in California

In the never-ending soap opera that is the California gaming marking, 2025 marks an especially newsworthy and tumultuous year. In fact, things in California are so fast moving that this article, first drafted in July 2025, has suffered from no less than three rewrites in the intervening months to account for all the plot twists that have occurred this summer.

On February 19, 2025, California Assemblymember Avelino Valencia (D-Anaheim) introduced AB 831, an act to expand the California penal code definition of gambling to include “online sweepstakes games.” Since introduction, the bill has passed the State Assembly and is currently winding its way through the State Senate, with a floor vote likely to take place in the first half of September.

On July 3, 2025, California Attorney General Rob Bonta published Attorney General Opinion No. 23-1001 (the “AG Opinion”) in response to the following inquiry from Assemblymember Tom Lackey: Does California law prohibit the operation of daily fantasy sports games with players physically located within California, regardless of whether the operators and associated technology are located outside the State?

The Attorney General’s response was an emphatic “yes!” In short, the Attorney General concluded that all paid fantasy sports games 1. “constitute wagering on sports in violation of [California] Penal Code section 337(a) 2..” At present, all major daily fantasy sports (“DFS”) operators continue to offer their games in California and the Attorney General has yet to enforce his newfound interpretation of Penal Code section 337(a) 3.

As if all of this were not enough news to last a full calendar year, 2025 also introduced DFS and sweepstakes casino operators to a barrage of federal and state lawsuits brought by tribes, faceless gambling recovery LLCs, California citizens and state and local officials in recent months. These suits turn the tables on the ongoing debate and posturing over the proper categorization of these types of gaming products that has been, to date, driven by the California State Legislature and California Office of the Attorney General.

The State of Play in the California DFS Market

California has long been considered a safe space for DFS operators of every ilk. During the first fantasy sports battles of the mid-2010s, then California Attorney General Kamala Harris declined to issue an opinion as to the legality of DFS, despite many other Attorneys General readily decrying DFS as “gambling games” 4. and “illegal gambling” that “cause[s] the same kinds of social and economic harms as other forms of illegal gambling.” 5. Since that time, more and more DFS operators have poured into the target rich state that has long been viewed, alongside Texas, as the most profitable and important U.S. DFS market due to both being at least tolerable hosts for DFS while unwelcoming, if not openly hostile, to legalized sports wagering.

Of course, even in the safest of times, there have been detractors of DFS in California. Tribes have always bemoaned their presence in California and consider DFS to be illegal gambling that encroaches upon tribal sovereignty and self-determination 6. Now the tides have turned in favor of the tribes and their supporters.

This reversal began with a simple request from State Senator Scott Wilk to Attorney General Rob Bonta. In his October 5, 2023, request, Sen. Wilk asked Bonta for a “legal opinion as to whether California law prohibits the offering and operation of daily fantasy sports betting platforms with players physically located within the State of California, regardless of whether the operators and associated technology are located within or outside of the State.” 7. Wilk later resigned from the Senate and the request was adopted by Assemblymember Lackey.

The Attorney General took his time responding to this inquiry. More than a year-and-a-half later, in late June 2025, word began to spread that the Attorney General was preparing to publish his response to Assemblymember Lackey’s inquiry, and the word was that the Attorney General was preparing to make a sweeping declaration – that all real-money DFS are illegal gambling under California law. In a final attempt to stop publication, DFS and sports wagering operator Underdog filed suit to enjoin publication of the legal opinion 8. The Court rejected Underdog’s emergency petition to enjoin publication of the legal opinion 9.

The opinion itself is a thirty-three-page masterclass is legal writing. The opinion deftly and pre-emptively attempts to swat away all the arguments typically made by DFS operators. At its core, the Attorney General declared all real-money DFs to be violative of Penal Code section 337(a) because “they involve betting on sports.” In doing so, the Attorney General is attempting to foreclose those who oppose the opinion from levying arguments that: (i) DFS contests are games-of-skill which inherently are not betting; or (ii) DFS contests utilize “entry fees” as opposed to bets and therefore cannot be considered betting under 337(a). On the former, the Attorney General concluded that 337(a) prohibits the placing of bets or wagers “upon the determination of an uncertain or unascertained event in a particular way…[that] may involve skill or judgment,” and therefore, any argument that skill predominates chance in DFS is irrelevant to a determination as to whether 337(a) has been violated. As to the latter, the Attorney general claims that the operators conflate “bets or wagers,” which are prohibited, with “entry fees.” This, per the AG, is because “players promise to give money based on the determination of an uncertain or unascertained event (the sports competition) in a particular way (the relative aggregate performance of each player’s selected team of athletes).”

While the Attorney General has made clear he plans to enforce the law as he interprets it with regard to DFS, all the major operators continue to offer DFS in the state. As mentioned above, the Underdog lawsuit continues, and this is certainly a saga that will extend into 2026 10.

The California Legislature Takes Action Against Sweepstakes Casinos

AB 831 has two main sections, the culminative affect of which is an attempt to clearly prohibit what are colloquially known as “sweepstakes casinos.” To its detractors, these internet products are the modern evolution of internet sweepstakes cafes and outlaw casinos, and to those in support, these products are a bright and legal spin on classic sweepstakes games such as the McDonald’s Monopoly game, and which, for the majority of users, never evolve beyond a free-to-play social game. Of course, if these games were purely social with no real money aspect, they would not be at the center of a legal and political maelstrom. Instead, these games allow users to enter “sweepstakes” style contests in which users risk a virtual currency for chances to win real money prizes while playing casino-style games (e.g., Blackjack, Craps, Roulette, Slots and sports wagering).

As mentioned above, AB 831 has two main components. The first component further clarifies the strictures of what constitutes a legal sweepstake and provides for associated disclosures under the California Unfair Competitions Law (“UCL”). The amended UCL attempts to draw lines inthe sand that would make the operation of most sweepstakes casinos effectively illegal. The second component much more explicitly makes these activities illegal by adding a new section to the California Penal Code prohibiting any “entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate to knowingly support directly or indirectly the operation, conduct, or promotion of an online sweepstakes game within this state.” The bill goes on to propose the following definition of “online sweepstakes game”: a game, contest, or promotion that meets all of the following conditions:

1. Available on the internet or accessible on a mobile phone, computer terminal, or similar device.
2. Utilizes a dual-currency system of payment that allows a person to play or participate with direct consideration or indirect consideration, and for which the person playing or participating may become eligible for a prize, award, cash, or cash equivalents or a chance to win a prize, award, cash, or cash equivalents.
3. Simulates casino-style gambling, including, but not limited to, any of the following:
   (i) Slot machines.
   (ii) Video poker.
   (iii) Table games, including, but not limited to, blackjack, roulette, craps, and poker.
   (iv) Lotteries, as defined in Section 319.
   (v) Bingo.
   (vi) Sports wagering.
4. Awards cash or cash equivalents.

Passage of AB 831 would not just criminalize those who operate online sweepstakes games, but virtually everyone who facilitates such operation as well. As of September 1, 2025, AB 831 has passed the California Assembly and is most likely to sail through the Senate this week before heading to the Governor’s desk for signature and subsequent implementation.

It appears to be heady times in California for the disparate groups seeking to impede various forms of commercial gaming (legal or otherwise) in the state. As mentioned at the top, this does not include the nearly a dozen lawsuits of various types that DFS and sweepstakes operators are facing in California alone, nor does it take into account the increasing hostile environment California’s cardrooms are facing. Of course, this is not the first time an attorney has declared the death of commercial gaming in California. While state presents a cautionary tale of what happens when businesses rush headfirst towards perceived gold in the hills, it continues to see wave after wave of enterprising gaming operators and entrepreneurs enter in hopes of striking it rich.

Time will tell whether operators currently in the cross-hairs will strike gold or be relegated to the increasingly full dustbin of California gaming history.

Joshua Kirschner is a member of the IMGL https://www.imgl.org/user/Joshua.Kirschner/

1. It should be noted that the AG Opinion only refers to “daily fantasy sports” and the Attorney General “need not consider whether season-long fan
   tasy sports fall outside of section 337a,” however, as discussed herein, the AG Opinion leads to the inescapable conclusion that real-money fantasy
   sports, regardless of designation or duration would be illegal gambling under the Attorney General’s theory.
2. Ca. Atty. Gen. Op. 23-1001 at 1.
3. Despite near-constant appeals from the California Tribal community. See, e.g., Edelstein, Jeff, California’s Tribes Call for Cease-and-Desist Or
   ders against DFS Platforms, CDC Gaming, July 28, 2025 https://cdcgaming.com/brief/californias-tribes-call-for-cease-and-desist-orders-againstdfs-platforms/
4. Nv. Atty. Gen. Memo., Legality of Daily Fantasy Sports Under Nevada Law, at pp. 1, 6-7 (Oct. 16, 2015).
5. New York Office of the Attorney General, Cease-and-Desist Letter to DraftKings (Nov. 10, 2015), https://www.scribd.com/doc/289288418/Final-NYAG-DraftKings-Letter-11-10-2015#:~:text=The%20New%20York%20Attorney%20General,before%20the%20AG%20initiates%20proceedings.
6. Welman, Jessica, CNIGA Chair says all forms of DFS and sweepstakes gaming are illegal, SBC Americas, Oct. 16, 2024, https://sbcamericas.com/2024/10/16/cniga-siva-sweepstakes-dfs/.
7. https://htv-prod-media.s3.amazonaws.com/files/10-5-23-ag-re-fantasy-sports-pdf-685c97716748e.pdf
8. Underdog Sports, LLC v. Bonta, Case No. 25WM000120, Sacramento County Sup. Ct. (Jun. 30, 2025); Although not totally germane to this arti
   cle, an interesting subplot is now playing out within this action. The Attorney General has made a strikingly aggressive declaration that any attempt
   to “enjoin and prohibit the Attorney General from issuing legal opinions” are attempts to “restrict the Attorney General’s right to free speech”
   under the California State Constitution and the First Amendment. Similarly striking is the Attorney General’s assertion that “as a matter of law,
   section 12519 does not impose any restriction on the Attorney General’s authority to issue legal opinions.” Underdog Sports, Respondent’s Motion
   to Strike, pp. 1-2 (Jul. 22, 2025).
9. This litigation is ongoing; Underdog has indicated it plans to amend its complaint in further efforts to invalidate and nullify the Op. No. 23-1001.
10. As if this matter were not acrimonious enough, the Governor voiced his disagreement with the Attorney General’s opinion within days of publication.