Underdog Files Lawsuit to Stop California AG Publishing Opinion on Fantasy Sports Legality

Underdog Sports has filed a lawsuit in the California Superior Court to stop the office of Attorney General Rob Bonta from releasing a legal opinion on whether fantasy sports are legal in the state. 

Recent reports suggest Bonta intends to declare fantasy sports illegal, while Underdog’s filing also indicated that its discussions with the AG’s office confirmed those reports. Underdog Sports is also challenging whether the attorney general can declare fantasy sports legal or not. 

According to its filing, 10% of Underdog’s revenues comes from California, where it operates Underdog Fantasy. 

“The Attorney General’s office confirmed that after releasing the opinion, the goal would be to use the threat of an enforcement action—under the interpretation of California law that the Attorney General will impermissibly announce in the opinion—to pressure Underdog into agreeing to leave California entirely,” read the legal brief.

Underdog California Case Built on Three Points

The Underdog Sports appeal is based on three major points. The first of these is that an AG’s opinion should be an opinion, and not involve extensive fact finding to reach a conclusion. Underdog points out that Bonta’s opinion has not been revealed 18 months after its request from Senator Scott Wilk, indicating a significant period of fact finding which didn’t align with what should be required from an AG’s opinion. 

The legal brief claims that with such an extensive fact finding mission, the AG has extended beyond their scope of providing opinions on matters of law. 

“Legal opinion as to whether California law prohibits 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,” is how Sen. Wilks requested the opinion.

Which leads into Underdog’s second point that Sen. Wilks no longer holds office in California after serving his term limits. Underdog argues that as Wilks is no longer in office, his opinion request is no longer valid. 

The final point was that Wilks had no right to ask the question in the first place, as the question of whether or not to prosecute a company, person, or vertical falls under the executive branch's authority. 

Underdog Diversifying Business and Eyeing Missouri Launch

While 10% of the company’s revenue currently comes from California and is under threat with AG Bonta’s fantasy sports opinion, Underdog is trying to diversify by adding new verticals in other US markets. The operator was one of the first, along with DraftKings, to apply for a sports betting license in Missouri.

The Missouri Gaming Commission did not announce what type of license Underdog applied for, meaning it’s unknown whether the company intends to partner with a local casino or professional sports team, or claim a standalone sportsbook license. Sports betting in Missouri must go live by December 1.

Currently, Underdog Sportsbook is only available in North Carolina.