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California AG to Investigate Legality of Fantasy Sports

The California Attorney General’s Office is launching a new investigation into the legality of daily fantasy sports (DFS) in the Golden State. AG Rob Benta, at the behest of State Sen. Scott Wilk (R) will be taking on the question of whether or not DFS sites are operating legally as games of skill or in violation of California law as games of chance? The answer to that question could have a massive impact on Cali-facing DFS operators, who earn around $200 million annually from the state’s players.

DFS operators have been under fire in a number of states recently but the California inquiry is a different, and much more existential, threat to the business. In Michigan, for example, the debate over DFS centers on whether or not it pits players against the house. The California investigation is a much deeper dive aimed at determining the legality of the entire business model.

“Although the participant may utilize their knowledge of a particular sport in choosing their ‘team’ of players, how well those players perform during a game is completely out of the participant’s control. As such, daily fantasy sports appears to be a game of chance not otherwise permitted by the laws of California,” Wilk said in comments reported on by Legal Sports Report.

Wilk has never been an ardent opponent of regulated gambling and his district does not include any of California’s tribal casinos. That said, the findings of the investigation he’s requesting could potentially shut down a significant revenue for DFS operators.