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California’s largest association of Indian tribes submitted comments to the state attorney general questioning the legality of daily fantasy sports and calling pick’em games illegal sports wagering.
James Siva, chairman of the California Nations Indian Gaming Association (CNIGA), submitted the letter to California Attorney General Rob Bonta on behalf of the association’s 52 member tribes.
Daily fantasy sports have operated in a gray area in California for years. CNIGA’s comments are presented as a legal opinion on fantasy sports contests under California law.
The attorney general hasn’t made public the comments submitted for the opinion, which were due by the end of January.
Request for comments on California daily fantasy sports
California Sen. Scott Wilk wrote a letter to the attorney general requesting the opinion on the legality of daily fantasy sports in October. In the letter, Wilk expressed his opinion that DFS “appears to be a game of chance not otherwise permitted by the laws of California.”
The attorney general asked for views from interested parties on the following question:
“Does California law prohibit the offering and operation of daily fantasy sports betting platforms with players physically located within the State of California, regardless of whether the operators and associated technology are located within or outside of the State?”
The attorney general has not provided any timeline for producing its opinion on the legality of daily fantasy sports.
While tribes are concerned about unregulated gambling offered in California, they have other priorities.
Asked what result he hoped to come from the attorney general opinion, Siva turned the attention to another AG opinion would like to see:
“It’s both surprising and concerning that the attorney general moved so quickly for comments on fantasy sports when the tribes have been asking for decades for comments on the illegal games at cardrooms.”
CA tribes call pick’em games illegal sports wagering
In his request, Wilk mentions that California voters overwhelmingly rejected Prop 27 to legalize online sports wagering in 2022.
Led by CNIGA, California tribes have been holding discussions regarding coming together on a model for doing online sports betting. But tribes opted not to file a ballot initiative seeking to legalize sports betting in 2024.
A big focus of the letter is arguing that some operators are illegally offering sports betting in California by allowing customers to put money on in-game performances of individual players, such as whether Patrick Mahomes throws for 300 yards in the Super Bowl.
“In the operation of these Pick’em Games, major operators, such as Underdog Fantasy and PrizePicks, have participants play against the ‘house,’ where the participant’s win is purely dictated by whether he or she correctly predicts the over-under outcome of each performance statistic for each of two or more athletes. This is not facilitating a game in which participants are pitting their fantasy ‘teams’ against one another’s teams, as is typically associated with the management of a fantasy sports team.”
The comments name Michigan and Florida as states that recently prohibited fantasy sports operators from offering wagers resembling proposition bets.
“In reliance on laws similar to those of the State, the Florida Gaming Control Commission determined popular pick’em game operators, including PrizePicks and Underdog Fantasy, violated applicable Florida law because those games resembled sports betting.”
Tribal legal analysis of fantasy pick’em games
CNIGA contends that pick’em games violate the state’s prohibition on banking games.
“The operator provides performance statistics for various athletes that participants then bet for or against. The participants are not competing against one another. The participants place various bets with the operator that serves as the bank and collects all the bets, and after the contest keeps the wagers from the bets that have failed and pays out those that have won. Thus, these DFS games run afoul of the State’s prohibition on banking games, which has been elevated to constitutional standing.”
CNIGA also argues that pick’em games violate California Penal Code 337a(a), which prohibits individuals and entities from accepting bets upon the result of any contest of skill, speed, power or endurance of a person or between persons.
CA tribes identify legal issues with regular DFS
Tribes also take aim at regular daily fantasy sports games, which they call illegal percentage games.
“To the extent participants in a fantasy sports game are playing and making wagers against other participants in the game, rather than the operator, and the operator is taking a percentage of the wagers made or the sums won in play, then exclusive charges or fees for use of space and facilities, make the game an illegal percentage game.”
California prohibits lotteries with a few exceptions, including the California State Lottery. Tribes argue that fantasy sports could fall under the state’s prohibition on lotteries.
CNIGA contends fantasy sports contests resemble lotteries in that:
- Operators compile collective wagers and then make prize distributions to winning participants
- Skill plays less of a role than chance in determining who wins the contest
- Wagers are relatively minor compared to the overall winnings.
