The Future of DFS in California After the State Declares Paid Contests Illegal

July 17, 2025  |  By ,

VW Gaming Alert: On July 3, 2025, the California Attorney General Declared ALL Paid Daily Fantasy Sports Contests Illegal Under California Law. What Does This Mean for the Future of Daily Fantasy Sports in California and as a Whole?

Note to all fantasy sports industry operators, vendors, and service providers currently offering or assisting fantasy sports operators in the State of California: Earlier this month, the Office of the California Attorney General released an advisory opinion that deems both “pick ’em” and “draft‑style” daily fantasy sports contests illegal. What exactly does this mean for the future of daily fantasy sports contests in California? Does this simply mean a temporary pause for DFS in California, or will the opinion hold?

In October of 2023, California Senator Scott Wilk requested that the California Department of Justice investigate whether fantasy sports contests are legal under California state law. It was clear by the way the question was asked that Wilk did not believe the contests were legal—noting that the apparent chance-based nature of the games means they are not permitted in California. A year and a half later, the Office of the California Attorney General issued a thirty-three-page advisory opinion finding certain fantasy contests to be illegal under California law (the “California Opinion”). With California being one of the daily fantasy sports (“DFS”) industry’s leading markets, the California Opinion could have a devastating impact on the fantasy industry as a whole.

There is no question that the negative California Opinion adds significant risk to DFS operations in one of the largest and most populous markets in the United States, but this is not the first time a state attorney general (“AG”) has issued a negative opinion when it comes to DFS— yet the impact of historical opinions has varied. The resulting uncertainty surrounding enforcement has many industry insiders wondering what the California Opinion could mean for DFS nationwide. We note that as of today, twenty-seven states (and the District of Columbia) have legalized DFS frameworks or specifically exempted fantasy contests from the definition of gambling. A negative position on DFS from a giant like California could easily sway the seventeen unregulated states (previously eighteen counting California), and perhaps invite the regulated states to take another look. Thus, the fallout from the California Opinion will be closely watched.

Below, we  review advisory opinions, AG authority, and the ultimate impact of negative AG opinions in Nevada, Illinois, Florida, and Texas. Using these historical reference points, we provide a few hypothetical outcomes regarding the future of DFS in California.

Illinois

Summary of Local Attorney General Authority and Opinion on Fantasy Sports.

Under Illinois law, the AG (the “Illinois AG”) may issue written advisory opinions to state officers, members of the General Assembly, and state agencies. These advisory opinions are not legally binding, but they serve as authoritative guidance on unsettled or unclear areas of law. In general, non-binding means that the advisory opinions do not carry the force of law or court rulings but are considered persuasive and influential guidance for interpreting state statutes. While courts are not obligated to follow them, such opinions often influence administrative practices and are considered persuasive by courts and agencies. This is true for Illinois as well as the other states discussed in this review.

The Illinois AG has broad enforcement powers, including the power to enforce its own advisory opinions, under both the Illinois Constitution and state statutes. This includes the powers to represent the state in legal matters, initiate civil or criminal actions in the public interest, and enforce laws related to consumer protection, charitable trusts, and government integrity. Under § 205/4 of the Illinois Compiled Statutes, the Illinois AG may also prosecute criminal cases with the consent of local state’s attorneys or when directed by other branches of government, giving the office a key role in upholding the rule of law and protecting statewide interests.

In December 2015, the Illinois AG issued an opinion concluding that paid DFS contests were illegal gambling under Illinois law (the “Illinois Opinion”). The Illinois AG reasoned that Illinois statutes prohibit wagering on games of chance or skill for money, and DFS falls within that prohibition regardless of whether DFS is skill-based. The Illinois Opinion also found that the statutory exception for “bona fide contests of skill” did not apply to DFS—that exception refers to the actual athletes participating in the sporting events, not the fantasy sports users. While the opinion was not a binding court ruling, it carried significant legal weight and prompted calls for legislative action to clarify or regulate DFS in the state.

Impact on Fantasy Sports Operations in the State.

Illinois is a unique case when it comes to the impact on the local DFS industry in the aftermath of the local AG opinion deeming DFS illegal under state law. Following the Illinois Opinion, major operators like DraftKings and FanDuel faced heightened legal risk and were advised to cease accepting paid entries from Illinois users unless new legislation clarified their legality. Some operators continued to offer contests in Illinois pending litigation and legislative efforts, the Illinois Opinion prompted immediate legal challenges and spurred a push for a regulatory framework. Therefore, although the Illinois Opinion initially had a significant chilling effect on the DFS industry locally, it was a catalyst that led to clarification.

This is largely because shortly after the Illinois Opinion was released, an Illinois resident filed suit alleging that DFS was illegal after losing a DFS contest and sought recovery under the state’s gambling statute. In contrast to the earlier position of the Illinois AG, the Illinois Supreme Court held that DFS contests are games of skill and therefore not gambling under state law. As a result, DFS remains legal and widely available in Illinois today, with operators continuing to offer contests under the protection of that court ruling despite the earlier advisory opinion issued by the Illinois AG. Note that DraftKings, FanDuel, and many other DFS operators reentered Illinois.

Illinois is an example of a state supreme court not following an AG’s advisory opinion, and more specifically, where a negative AG opinion regarding the legality of DFS did not mean the death of the local DFS industry.

Florida

Summary of Local Attorney General Authority and Opinion on Fantasy Sports.

In Florida, the AG (the “Florida AG”) serves as the state’s chief legal officer with the authority to issue advisory opinions and is granted a limited power to enforce state laws in certain situations. Under the Florida Constitution and state statutes, the Florida AG may provide non-binding but influential legal opinions to public officials, including the Governor, legislators, and agency heads, helping guide the interpretation and application of state law. The Florida AG also has broad civil enforcement powers, particularly in areas of consumer protection, antitrust, and deceptive trade practices, and plays a key role in enforcing laws such as the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). While the AG generally cannot prosecute criminal cases at the trial level without a specific request or statutory authorization, the Florida AG remains a central force in protecting the public interest and ensuring legal compliance throughout the state.

In 1991, the Florida AG issued an advisory opinion (the “Florida Opinion”) that concluded that paid fantasy sports leagues violate the state’s gambling laws under § 849.14 of the Florida Statutes. The early Florida Opinion reasoned that when participants pay entry fees to draft teams and receive prizes based on actual player performance, those fees are considered “stakes, bets, or wagers,” making the activity illegal gambling—even if it involves skill. Although the Florida Opinion is non-binding, it remains the primary state-level guidance on the legality of paid fantasy contests and continues to create legal uncertainty for operators and participants in the state. It is also important to note that the Florida Opinion was issued twenty years before DFS was even created.

Impact on Fantasy Sports Operations in the State.

Notwithstanding the negative Florida Opinion issued over a quarter century ago, there has been little to no enforcement against DFS operators in Florida to date, except for enforcement against non-traditional DFS products that the Florida Gaming Control Board (“FGCB”) considered gambling. More specifically, in recent years, the FGCB sent cease-and-desist orders to operators of “pick’em” style games, but many of those operators have since adjusted offerings in a manner believed to satisfy the FGCB and continue to offer those modified contests today. As of July 2025, DFS operators offer many variations of DFS contests in Florida in what many consider a legal gray area.

Florida is an example of a state where the DFS industry has continued to thrive with little exception, notwithstanding a negative advisory opinion by the state AG.

Texas

Summary of Local Attorney General Authority and Opinion on Fantasy Sports.

In Texas, the AG (the “Texas AG”) serves as the state’s chief legal officer with the authority to issue advisory opinions and enforce state laws. Texas AGs are granted the power to issue non-binding advisory opinions, but have limited power to enforce those opinions. Under the state Constitution, the Texas AG has broad powers to represent Texas in legal matters, initiate or intervene in civil lawsuits, and enforce state laws, including consumer protection and criminal statutes. However, while the Texas AG may prosecute certain criminal matters and assist local prosecutors, most criminal prosecutions have historically been handled at the county level. Unlike many other states, Texas does not have a centralized gambling commission. As a result, enforcement is fragmented among local law enforcement and prosecutors across the state, rather than executed by a single division.

In January 2016, the Texas AG issued an opinion declaring DFS contests illegal gambling under Texas law (the “Texas Opinion”). The Texas AG argued that DFS contests involve betting on the performance of athletes, with the house taking a cut, which aligns with the state’s definition of prohibited gambling and emphasized that Texas law requires only “partial chance” for an activity to be considered gambling. Here, the Texas AG reasoned that because DFS outcomes depend on both skill and chance—rather than skill alone— they are illegal gambling under state law. Like the recent California Opinion, the Texas AG excluded traditional season-long fantasy sports, and found those to be legal because the house did not take a cut.

Impact on Fantasy Sports Operations in the State.

Shortly after issuing the Texas Opinion, major operators left the state, but the stint of absence was short-lived. This is largely because DraftKings sued the state seeking a declaratory judgment on the legality of DFS under Texas law, and operators returned given the pending litigation. According to court records, the case is still open. It has now been a decade since the Texas Opinion was issued, and DFS remains widely available and active in the state. Like California, Texas is one of the largest and most populous states in the United States, and makes up a significant share of the DFS market.

Texas is an example of a state where the DFS industry has continued to thrive notwithstanding a negative advisory opinion by the state AG, potentially in part because the state does not have a centralized gambling enforcement division to spearhead enforcement actions and the widespread acceptance of DFS as a game of skill across the United States.

Nevada

Summary of Local Attorney General Authority and Opinion on Fantasy Sports.

Under Nev. Rev. Stat. Ann. § 228.150, the Nevada AG (the “Nevada AG”) is granted the authority to issue non-binding advisory opinions, and under Nev. Rev. Stat. Ann. § 228.170, the AG serves as Nevada’s chief legal officer with broad powers to enforce state laws, including gambling regulations, consumer protection statutes, and criminal provisions. The Nevada AG may bring civil or criminal actions on behalf of the state, represent regulatory agencies like the Nevada Gaming Control Board (the “NGCB”), and assist in prosecutions when requested by local district attorneys. Enforcement of gaming laws typically involves coordination with the NGCB and the Nevada Gaming Commission, which are the primary regulators of gambling in the state.

In 2015, the Nevada AG issued an opinion concluding that paid DFS contests constitute “sports pools” and “gambling games” under Nevada law (the “Nevada Opinion”). The Nevada Opinion rejected the argument that DFS is a game of skill and emphasized that the federal UIGEA exemption does not override state gambling laws. Following this determination, unlicensed DFS operators ceased operations in the state of Nevada. As such, the Nevada AG reasoned that because DFS contests were considered sports pools under local law, DFS operators would need to obtain a sports pool license from the NGCB to operate legally in the state. Unlike many other states, the Nevada Opinion came with threats of enforcement.

Impact on Fantasy Sports Operations in the State.

As of July of 2025, the regulatory stance on and current status of DFS operations in Nevada remains unchanged: DFS is not outright illegal but is treated as a form of gambling subject to licensing. Most national DFS brands continue to avoid the Nevada market due to the high regulatory burden and legacy sports betting operators who aggressively protect their territory, leaving the state with limited DFS offerings compared to jurisdictions that view such contests as games of skill. This is likely due to the broad enforcement powers granted to the Nevada AG, the state’s interest in regulating the gambling industry—the pillar of its economy, and the heightened risk of operations, including likely prosecution, as a result of the Nevada Opinion and significant state interest.

Nevada is an example of a state where the DFS industry left a state with rare exception following the issuance of a negative AG opinion. This is likely due to the threat and likelihood of enforcement by both the Nevada AG and the NGCB, and the state’s strict gaming laws.

California

Summary of Opinion and Authority.

Like in Nevada, the California AG (the “California AG”) is granted broad authority when issuing and enforcing advisory opinions. Under California Government Code § 12519, the AG may issue formal legal opinions when requested by certain public officials, including the Governor, members of the Legislature, state agencies, district attorneys, sheriffs, and other local officials. These advisory opinions are not legally binding but are considered highly persuasive, especially for state and local agencies seeking guidance on unsettled legal questions. Courts may cite them as persuasive authority, though they are not required to follow them.

The California AG is granted enforcement power under Article V, § 13 of the California Constitution and California Government Code §§ 12511–12512. More specifically, the California AG is granted the power to enforce both civil and criminal laws, represent the state and its agencies in legal matters, and act to protect the public interest. The California AG may initiate investigations or legal actions independently or step in when local prosecutors fail to act or face conflicts of interest. These powers extend to areas such as consumer protection, antitrust, environmental regulation, and gambling enforcement, giving the AG a prominent role in shaping and upholding state policy through both litigation and legal interpretation. Further, gaming in California is regulated and enforced by government agencies, such as the California Gambling Control Commission and the California Bureau of Gambling Control. The California tribal gaming industry has publicly expressed its support of the California AG Opinion and potential ban on fantasy sports.

As previously noted, on July 3, 2025, the California AG issued an advisory opinion that determined both “pick ’em” and “draft‑style” DFS contests prohibited under Penal Code § 337a because entry fees constitute wagering on events, which is illegal in California. The prohibition covers offering any paid DFS contest to participants in California, but does not appear to cover season-long contests.

Impact on Fantasy Sports Operations in the State.

Notwithstanding the negative AG Opinion, many fantasy sports operators continue to offer paid DFS in the state for the time being. Before its release, at least one operator – Underdog Sports – attempted to prevent the release of the California Opinion, seeking a temporary injunction, which the judge refused to grant. Following its release, many industry and non-industry leaders have publicly opposed the California Opinion. Even Governor Gavin Newsom publicly disagreed with the ruling—welcoming “a constructive path forward in collaboration with all stakeholders.” Taking it a step further, the Fantasy Sports & Gaming Association called the opinion “out of step with… other jurisdictions” that label DFS skill-based, and major platforms have shared similar public opposition. Due to conflicting perspectives and threats of prosecution, DFS operators are now faced with making the difficult decision of altering or completely discontinuing operations in a major market or assuming the risk of continued operations.

Below is a complete list of state AG Opinions on fantasy sports and the current status of fantasy sports operations in the associated state:

  • Alabama. In 2016, the Alabama AG determined that DFS contests were illegal under state law in an advisory opinion. However, state lawmakers disagreed and passed legislation three years later to regulate DFS in 2019. As such, DFS contests are currently offered as regulated games of skill in Alabama.
  • Arizona. In 1998, the Arizona AG determined that DFS contests were illegal under state law in an advisory opinion. However, state lawmakers disagreed and passed legislation over twenty years later to regulate DFS in 2021. As such, DFS contests are currently offered as regulated games of skill in Arizona.
  • California. As discussed above, in July of 2025, the California AG issued an opinion deeming DFS illegal under state law. As such, the future of DFS operations in the state is currently in flux.
  • Connecticut. In 2016, the Connecticut AG issued an advisory opinion concluding there was substantial risk that DFS legislation could jeopardize revenue-sharing agreements with the Tribes and cautioned against passing laws to regulate DFS. However, state lawmakers did not take this advice and passed legislation five years later to regulate DFS in 2021. As such, DFS contests are currently offered as regulated games of skill in Connecticut.
  • Florida. As discussed above, in 1991, the Florida AG determined that DFS contests were illegal under state law in an advisory opinion. However, the opinion specifically discussed fantasy sports leagues and predated the advance of DFS; notwithstanding the negative AG opinion, DFS contests are currently offered as unregulated games of skill in Florida without apparent issue.
  • Georgia. In 2016, the Georgia AG determined that DFS contests were illegal under state law in an advisory opinion. Notwithstanding the negative AG opinion, DFS contests are currently offered as unregulated games of skill in Georgia without apparent issue.
  • Hawaii. In 2016, the Alabama AG determined that DFS contests were illegal under state law in an advisory opinion. Soon thereafter, all major operators ceased offering contests in Hawaii, and DFS contests are currently unavailable in the state.
  • Illinois. As discussed above, in 2015, the Illinois AG determined that DFS contests were illegal under state law in an advisory opinion. However, five years later, the Illinois Supreme Court rejected the AG Opinion and determined that DFS was a game of skill in 2020. As such, DFS contests are currently offered as unregulated games of skill in Illinois.
  • Kansas. In 2015, the Kansas AG determined fantasy sports leagues were lawful games of skill under state law, and the state passed legislation to regulate fantasy sports later that year. As such, DFS contests are currently offered as regulated games of skill in Kansas.
  • Mississippi. In 2016, the Mississippi AG determined that DFS contests were illegal under state law in an advisory opinion, but lawmakers disagreed and passed legislation to regulate DFS later that year. As such, DFS contests are currently offered as regulated games of skill in Mississippi.
  • Nevada. As discussed above, in 2015, the Nevada AG determined that DFS contests were illegal under state law in an advisory opinion. Soon thereafter, all major operators ceased offering contests in Nevada, and DFS contests are currently unavailable in the state.
  • New York. In 2015, the New York AG determined that DFS contests were illegal under state law in an advisory opinion, but lawmakers disagreed and passed legislation to regulate DFS the very next year. As such, DFS contests are currently offered as regulated games of skill in New York.
  • North Dakota. In 1994, the North Dakota AG determined fantasy sports leagues were illegal under state law in an advisory opinion. However, in 2015, a different AG in the state issued a statement that if DFS contests were games of skill, they were likely legal, and if they were games of chance, they were likely illegal. The 2015 AG issued no formal opinion. Notwithstanding the negative AG opinion, DFS contests are currently offered as unregulated games of skill in North Dakota without apparent issue.
  • Rhode Island. In 2016, the Rhode Island AG determined that DFS leagues were lawful games of skill under state law. However, the state has not passed legislation to regulate fantasy sports in Rhode Island, and DFS contests are currently offered in the state as unregulated games of skill.
  • South Dakota. In 2015, the South Dakota AG issued a statement that DFS contests were illegal under state law, but simultaneously declared that it would not pursue felony indictments without further guidance from the state. Notwithstanding the negative statement from the AG, DFS contests are currently offered as unregulated games of skill in South Dakota without apparent issue. (Note: the statement was not a formal advisory opinion.)
  • Tennessee. In 2016, the Tennessee AG determined that DFS contests were illegal under state law in an advisory opinion, but lawmakers disagreed and passed legislation to regulate DFS later that year. As such, DFS contests are currently offered as regulated games of skill in Tennessee.
  • Texas. As discussed above, in 2015, the Texas AG determined that DFS contests were illegal under state law in an advisory opinion. Although major operators initially left the state, they soon returned, and DraftKings is currently involved in an active lawsuit seeking a declaratory judgment that DFS is legal in the state. As such, DFS contests are currently offered as unregulated games of skill in Texas without apparent issue, pending the final judgment.
  • West Virginia. In 2016, the West Virginia AG determined fantasy sports leagues were lawful games of skill under state law, and the state passed legislation to regulate fantasy sports later that year. As such, DFS contests are currently offered as regulated games of skill in West Virginia.

Conclusion

Like in Nevada, the unfortunate reality is that California has agencies that regulate gambling in the state and significant interest groups, such as the tribal gaming industry. These are bad facts for the future of DFS in the state. Though DFS continues to be offered in California, the Opinion issued by the California AG gives local district attorneys grounds to prosecute. Because the California Opinion is not law— the future of its legitimacy and weight hinges on court rulings as lawsuits arise and legislative action to regulate or restrict DFS surfaces. We are currently advising against maintained operations in the State of California for all DFS operators unless or until some judicial or legislative progress that lends towards a positive outcome is made.

As a reminder, fantasy sports are governed by a rapidly evolving area of law across the United States, particularly in light of the impact of sports wagering laws. We are here to help as you enter new territory, or if you have questions about new or existing laws, regulations, or advisory opinions from territories in which you currently operate or intend to operate in the future.

If you have any questions, please feel free to reach out to your Vela Wood attorney contact.

Posted in: Sports & Gaming

About the Author(s)

Blake Hart

Blake is a senior attorney at Vela Wood. She focuses her practice on contract drafting, review, and negotiation on behalf of sports and entertainment individuals and enterprises.

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Kevin Vela

Kevin is the managing partner at Vela Wood. He focuses his practice in the areas of venture financing, M&A, fund representation, and gaming law.

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