California Tribes Challenge Legality of Daily Fantasy Sports Pick’em Games

This stance was articulated in a comprehensive letter to State Attorney General Rob Bonta, dated January 31, in response to his solicitation for insights regarding DFS in California.

CNIGA’s Stance on Pick’em Games

The letter from CNIGA, representing 52 member tribes, emphasized a clear distinction between traditional fantasy sports contests and the pick’em games offered by prominent operators like Underdog Fantasy and PrizePicks. According to CNIGA, these pick’em games diverge from managing a fantasy sports team, which is central to conventional fantasy sports contests, and instead resemble illegal sports wagering.

CNIGA’s argument hinges on two main points: the nature of pick’em games, where participants bet on the performance stats of athletes from different sports, and the structure of these games that pit participants against the ‘house’ rather than facilitating competition between fantasy teams. This, according to CNIGA, aligns more with sports betting than with the spirit of fantasy sports.

California’s Position in the DFS Market

The debate over the legality of DFS pick’em games is particularly significant in California, given its status as the largest DFS market in the nation, boasting about $200 million in annual entry fees. The current lack of regulation and taxation on this substantial market adds another layer of complexity to the discussion.

The state Attorney General’s office initiated a review of DFS following a request from State Senator Scott Wilk, focusing on the skill versus chance nature of DFS and its alignment with state gaming laws. This inquiry seeks to clarify the legal standing of DFS platforms operating within California, a matter of keen interest to various stakeholders in the state’s gaming industry.

Our Comment on the Article

The challenge posed by CNIGA against the legality of DFS pick’em games in California underscores a pivotal moment in the ongoing debate over fantasy sports and sports wagering.

The distinction between skill-based fantasy competitions and gambling is at the heart of this dispute, with significant implications for operators, participants, and regulatory bodies.

As California grapples with these complex legal and regulatory questions, the outcomes of this inquiry could set important precedents for the regulation of fantasy sports and gambling, not only within the state but potentially influencing broader national policies in the gaming industry.