Operator argues DFS is a skill-based contest and alleges tribal lobbying influence
Daily fantasy sports (DFS) operator Underdog Fantasy has filed for a temporary restraining order and injunction against California Attorney General Rob Bonta, attempting to preempt a potential crackdown on DFS activity in the state. The lawsuit, filed in a California court, responds to increasing speculation that Bonta could issue a legal opinion categorizing DFS as unlawful gambling, effectively outlawing DFS operations in California.
While no formal opinion has been released, Underdog contends that even the prospect of regulatory action could destabilize the thriving DFS sector, which currently serves over 500,000 players across California.
Fantasy Sports: Game of Skill or Illegal Gambling?
At the heart of the legal battle is the long-standing debate over whether DFS constitutes a game of skill or chance—a crucial distinction under California gambling law. In its filing, Underdog argues that fantasy sports competitions are fundamentally skill-based, requiring users to engage in in-depth analysis, statistical research, and strategy to build successful teams.
“Contests of skill fall outside the definition of gambling under California law,” the company argues, pointing to the absence of enacted state legislation explicitly banning fantasy sports.
Legal Boundaries and Political Backdrop
Underdog asserts that Attorney General Bonta has no legal standing to issue a binding opinion on DFS legality, particularly when that opinion stems from a request by former State Senator Scott Wilk, who is no longer in office. The operator contends this violates procedural norms and lacks a valid basis in active legislation.
Additionally, Underdog’s legal team claims that AG opinions are non-binding and should not dictate policy, especially in gray areas like DFS where state statutes have historically been ambiguous.
Tribal Lobbying Allegations Surface
One of the most striking aspects of the filing is Underdog’s accusation of undue tribal influence. The suit alleges that California tribal gaming interests have lobbied AG Bonta in private meetings, pushing for a DFS ban to preserve their market dominance over gambling offerings in the state. This, Underdog claims, is a monopolistic move disguised as consumer protection.
“On information and belief, the tribes have met numerous times with Attorney General Bonta and his representatives and lobbied for the opinion to be issued,” the filing states.
Legal Stakes and Industry Implications
Underdog’s suit seeks a court order prohibiting AG Bonta from issuing any legal opinion responding to the Wilk request or attempting to redefine DFS under current law. The company argues that any such action would cause immediate and irreparable harm, not only to its own operations but to the broader DFS landscape in California.
The company’s aggressive legal stance reflects the high stakes for DFS operators, especially in one of the country’s largest and most lucrative markets. A state-level ban in California could trigger similar challenges across other states with ambiguous laws, setting a national precedent.
A Billion-Dollar Business in Peril
Underdog’s value, estimated at $1.2 billion as of March 2025 following a funding round led by Spark Capital, highlights just how much is on the line. The DFS platform continues to grow its presence in the U.S. amid increasing scrutiny from state regulators, lawmakers, and tribal authorities alike.
As the case moves through the courts, the outcome could have far-reaching implications for the legal future of fantasy sports, state sovereignty over gaming regulation, and the tension between emerging digital platforms and entrenched tribal gaming operations.
