Sports betting marketplace WagerWire has announced that it has submitted a letter to California’s Attorney General outlining the company’s support for Daily Fantasy Sports (DFS) in the Golden State.
In a social media post, the company confirmed its support for The Coalition for Fantasy Sports, a group of fantasy sports providers that includes Underdog Fantasy, PrizePicks, and Betr.
The letter came in response to California State Senator Scott Wilks’ call for an investigation into the legality of DFS contests in California. Wilks suggests that DFS contests are games of chance and should therefore be considering a form of gambling as sports wagering is. In his letter to the Attorney General, Wilks said:
“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.”
Following Wilks’ letter, Attorney General Rob Bonta launched an investigation and is now reviewing whether the state’s gambling law prohibits Daily Fantasy Sports.
As part of that investigation, the Attorney General’s Office opened a “Request for Comments Regarding Attorney General Opinion 23-1001.” The request reads,
“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?”
Based in California and founded by three UCLA graduates, Zach Doctor, Travis Geiger and Guy Dotan, WagerWire suggests that prohibiting DFS in the state would have a detrimental effect on the economy. WagerWire’s letter notes that startups based in the state would be heavily impacted by any prohibition while its own operations could also be impacted. The company is headquartered in California and could move to relocate if DFS contests are found to be in breach of the state’s gambling code.
WagerWire also calls upon other companies in the state to follow suit and respond to the Attorney General’s request for comments.
2015 Request
Former Assemblyman Marc Levine (D) made a similar request for an investigation into the legality of DFS contests in California in 2015. However, then-Attorney General Kamala Harris never released an opinion on the industry.
The California DFS market is the largest in the USA and records entry fees in excess of $200 million each year. However, as the industry is currently unregulated, the state collects no taxes on those fees or company revenues.
There is no timeline for California’s investigation.
Michigan, New York Ban Pick’em Games – Maine Fines Underdog
In October of last year, the states of Michigan and New York moved to ban DFS pick’em contests on the basis that they were too similar in nature to sports wagers. This meant that DFS operators were offering illegal and unlicensed sports wagering products despite being licensed for DFS.
In the same month Maine fined DFS operator Underdog for offer what it termed as ‘illegal daily fantasy games’. While the state stopped short of banning pick’em games outright, the fine resulted in Underdog pulling its pick’em games from Maine.
An experienced iGaming commentator and analyst based in New York City - Jenny reports on regulation and gambling industry news and events.