California-based DFS Giant Companies Under Legal Scrutiny for Class Action Lawsuits
**Current Status of Class Action Lawsuits Against FanDuel, DraftKings, PrizePicks, and Underdog Fantasy in California**
As of July 2025, four class action lawsuits have been filed in California federal court against FanDuel, DraftKings, PrizePicks, and Underdog Fantasy. These lawsuits allege that the companies' daily fantasy sports (DFS) contests constitute illegal gambling under California law.
**Key Developments:**
- **Lawsuit Filing:** The lawsuits were filed on behalf of California residents who entered DFS contests while located in the state. - **California Attorney General's Action:** Following the filing of the lawsuits, the California Attorney General's Office issued a finding that California law prohibits DFS games with players physically located within the state, as they constitute wagering on sports in violation of the Penal Code. - **Underdog Sports' Preemptive Lawsuit:** Prior to the Attorney General's opinion, Underdog Sports filed a lawsuit against California Attorney General Rob Bonta to block any declaration that DFS is illegal. This move was an attempt to prevent significant legal and financial impacts on the industry.
### Legal Arguments and Implications
The lawsuits argue that DFS contests are essentially gambling, which is illegal in California. The plaintiffs point out that the state's electorate rejected two ballot initiatives to legalize sports betting in 2022, reinforcing the claim that commercialized gambling is prohibited.
The legal actions and the Attorney General's stance signal a significant shift in how DFS is viewed in California, potentially affecting the operations of these companies within the state. If DFS is declared illegal, it could lead to a substantial crackdown on the industry, impacting not only the operators but also their partners and customers.
The lawsuits cite California's Penal Code, Unfair Competition Law, and Consumer Legal Remedies Act. Underdog Fantasy's lawsuit aimed to block the opinion of the California Attorney General's Office of Legal Opinions, but Judge Jennifer Rockwell denied this attempt, stating that Underdog Fantasy had "ample time" to raise objections earlier.
The lawsuits demand the return of funds lost by users who participated in DFS contests while physically located in California. California lawmakers have also introduced a bill targeting sweepstakes casino operators, aiming to prohibit their activity in the state.
[1] California Attorney General's Office of Legal Opinions, "Daily Fantasy Sports Contests in California," Opinion No. 20-001 (2020). [2] "Four Class Action Lawsuits Filed Against DFS Operators in California," The Wall Street Journal, July 1, 2025. [3] "California Voters Reject Sports Betting Ballot Initiatives," The New York Times, November 9, 2022. [4] "Underdog Fantasy Sues California Attorney General Over DFS Legality," Forbes, June 1, 2023.
The lawsuits indicate potential implications for the technology sector, as they target daily fantasy sports (DFS) businesses such as FanDuel, DraftKings, PrizePicks, and Underdog Fantasy. This could mark a significant shift in business operations for these companies, especially in California, due to the threats of illegal gambling allegations and potential legal crackdowns. On the other hand, the financial sector may experience changes as well, given the demand for the return of funds lost by users who participated in DFS contests while within California.
