Finally, the much-anticipated opinion of the California Attorney General's office on the state of Daily Fantasy Sports has been released. AG Rob Bonta's office has declared fantasy sports as illegal, and says that it breaches the penal code primarily because it involves sports betting. But the governor of California, Gavin Newsom, opposes the decision.

In a high-profile political and legal development, California Governor Gavin Newsom has expressed clear opposition to Attorney General Rob Bonta's recent legal opinion condemning paid fantasy sports in the state. The long-anticipated opinion, officially released on July 3, argues that daily fantasy sports contests - both pick'em and draft-style formats - violate California's laws prohibiting sports betting.

While Bonta's office insists the opinion aligns with existing law under Penal Code section 337a, Governor Newsom has taken a markedly different stance, emphasizing that the opinion is not binding and calling for constructive engagement with stakeholders.

Governor Newsom challenges AG's viewpoint

Responding swiftly to the release, Newsom's spokesperson, Izzy Gardon, distanced the governor's office from the opinion. "The attorney general, in his independent capacity, issued this opinion - not the governor's office," Gardon said. "While the governor does not agree with the outcome, he welcomes a constructive path forward in collaboration with all stakeholders."

The governor's remarks raise questions about whether the opinion will have immediate implications for the legality of fantasy sports in California, especially given the fact that attorney general opinions are advisory and do not carry the force of law.

Opinion classifies DFS as illegal sports betting

The opinion itself spans over 60 pages and draws a firm legal line, declaring both major DFS formats - such as pick'em-style and draft-style contests - as forms of illegal sports wagering.

In particular, Bonta's office labeled pick'em contests - where participants predict athlete performance relative to statistical benchmarks - as "clearly" in violation of the penal code. "Pick'em participants clearly place bets on the outcome of sporting events," the opinion states, equating such formats to proposition bets and parlays commonly found in traditional sports betting.

Draft-style fantasy contests, in which users select rosters of real athletes and earn points based on their statistical output, also failed to pass legal boundaries. The opinion rejected arguments that such games qualify for legal exemptions for skill-based contests or competitions. Instead, it asserted these contests represent a wager on the performance of third parties and are comparable to "bookmaking operations."

Industry and operators push back

Major players in the fantasy sports industry were quick to denounce the opinion, aligning themselves with Governor Newsom's stance. The Coalition for Fantasy Sports - a trade body representing companies like PrizePicks, Underdog, Splash, Dabble, and Betr - expressed strong disagreement with Bonta's conclusions.

"We agree with Governor Newsom - AG Bonta got it wrong," said JT Foley, executive director of the Coalition. "The law has not changed, a fact the last two Attorneys General, Kamala Harris and Xavier Becerra, recognized as they specifically declined any similar action."

FanDuel, one of the two largest DFS operators alongside DraftKings, echoed calls for dialogue. "We look forward to meeting with the Attorney General's office to talk through our next steps," a FanDuel spokesperson stated.

In the lead-up to the opinion's publication, we reported that Underdog, a rising DFS operator, filed a lawsuit in an attempt to block its release. However, the case was dismissed by a state court judge, who ruled the company had waited too long to act and failed to demonstrate any immediate legal harm. The judge emphasized that attorney general opinions are non-binding and do not constitute a change in law.

Tribal gaming interests support enforcement

Meanwhile, tribal gaming groups applauded the attorney general’s opinion, pressing the state for enforcement against what they consider unlawful gambling operations. James Siva, chair of the California Nations Indian Gaming Association, stated: "California has long turned a blind eye to illegal gambling - at the direct expense of tribal governments. Untold millions if not billions have been illegally wagered over the past decade." Siva called on state authorities to take immediate enforcement action, citing concerns over consumer protection and the integrity of the state's regulated gaming landscape.