Underdog Fantasy Sues California AG to Block Daily Fantasy Sports Ban Opinion

A Legal Showdown Over Authority

The suit, lodged in Sacramento Superior Court, requests a temporary restraining order (TRO) to prevent Bonta from releasing the opinion, expected by July 3. With California representing 10% of Underdog’s revenue, part of a $200 million annual DFS market, the stakes are existential for the company and the broader industry.

Underdog’s lawsuit hinges on three core claims challenging Bonta’s authority to issue the opinion. First, the company argues that the question of DFS legality is not a “pure question of law” but a “mixed question of law and fact,” requiring factual analysis beyond the Attorney General’s scope.

Determining whether DFS is a game of skill or chance, central to its legal status, demands examining specific contest mechanics, which Underdog says Bonta’s office has improperly done by consulting industry stakeholders. This, they argue, violates Bonta’s own policy against fact-based inquiries. “Any potential opinion is flawed because it has to rely on factual determinations the opinion process cannot and should not resolve,” the filing states.

Second, Underdog points out that the original request for the opinion, made by former Senator Scott Wilk in October 2023, is invalid because Wilk left office in 2024 due to term limits. California law requires the Attorney General to issue opinions only to current legislators, rendering Bonta’s response to a private citizen improper.

Finally, the lawsuit contends that Wilk’s request does not relate to his former legislative duties but rather to executive branch powers of law enforcement, breaching the separation of powers. “The request goes to the core of executive branch power,” Underdog’s brief asserts, calling it an overreach by Bonta.

Catastrophic Fallout Feared

Underdog warns that Bonta’s opinion could “poison a thriving industry” serving millions of Californians, casting a “legal cloud” over DFS operators. The company, which counts California as its largest market, predicts “imminent irreparable harm” from fleeing customers, wary banks, and reluctant payment processors.

The filing highlights the loss of jobs, investments, and partnerships, noting that even a brief period of public exposure to the opinion could devastate its business. “With the stroke of a pen, the Attorney General will adversely affect billions of dollars in commerce,” the suit claims.

Underdog cites Texas, where a 2016 opinion by Attorney General Ken Paxton led to FanDuel and DraftKings pulling paid products, as a chilling precedent.

The company’s urgency is palpable. “Without this Court’s immediate intervention, this unlawful gambit may succeed,” the filing warns. Underdog’s lawyer, David Gringer of Wilmer Cutler Pickering Hale and Dorr LLP, revealed that Bonta’s office admitted its goal is to pressure Underdog to exit California entirely, using the opinion as leverage for enforcement actions.

A Broader Industry at Risk

The potential ban would hit not just Underdog but also competitors like PrizePicks, Betr, and DraftKings, which have operated in California’s unregulated DFS market for over a decade. The Coalition for Fantasy Sports, representing these operators, told KCRA that 75% of California voters support DFS, urging Bonta to consider fans before acting.

“It’s shocking to think the state would suddenly take them away,” the coalition said. Unlike sports betting, banned outright in California, DFS has thrived in a legal gray area, deemed a “game of skill” by courts in states like New York and Illinois, where similar AG opinions were overturned.

Underdog’s TRO request seeks to preserve the status quo, arguing that a brief delay won’t harm Bonta, whose opinion has been 18 months in the making. If granted, the TRO could buy time for legal challenges, likely inevitable given California’s DFS industry. If Bonta’s opinion drops, operators may face cease-and-desist orders, pushing them to court or out of the state.