A coalition of top consumer protection law firms has launched a significant legal offensive against four major daily fantasy sports (DFS) operators—FanDuel, DraftKings, PrizePicks, and Underdog Fantasy—by filing a series of class action lawsuits in California federal court. These lawsuits accuse the companies of violating state gambling laws by operating DFS contests that allegedly amount to illegal sports wagering.
The lawsuits were filed on behalf of California residents who participated in DFS contests while located within the state. The plaintiffs argue that the platforms, although marketed as fantasy sports services, in fact function as unlicensed sports betting operators. Accordingly, they seek both monetary compensation and injunctive relief, calling for the cessation of such services in California.
Attorney General Opinion Backs Plaintiffs’ Central Argument
Shortly after the lawsuits were filed, California’s Attorney General issued a decisive opinion that reinforced the core argument behind the class actions. On July 3, 2025, the Attorney General’s Office of Legal Opinions determined that offering DFS games to individuals physically located in California constitutes illegal wagering under state law—regardless of where the companies or their servers are based.
“California law prohibits the operation of daily fantasy sports games with players physically located within California, regardless of where the operators and associated technology are located. Such games constitute wagering on sports in violation of [the] Penal Code,” the legal opinion stated.
Lawyers Say Companies Misled Consumers
Several attorneys involved in the litigation expressed support for the Attorney General’s opinion and stressed that the lawsuits are about consumer protection and legal transparency.
“We’re glad to see the California Attorney General stepping in to confirm the core theory of our cases—daily fantasy sports are gambling, plain and simple. And gambling is illegal in California,” said Wesley M. Griffith, a lead counsel in the case.
Margot Cutter of Cutter Law P.C. emphasized that the issue boils down to honesty in how these services are represented to the public. “These lawsuits are about fairness and truth in advertising. Californians deserve to know when they’re engaging in gambling—and when companies call it something else to skirt the law, that’s a problem not just for consumers but for the integrity of our legal system,” she said.
Weitz & Luxenberg partner James Bilsborrow accused the companies of creating a misleading narrative around DFS legality: “These companies intentionally created the false impression that what they were doing was lawful, and they banked on no one stopping them.”
Peter Silva of Tykco & Zavareei added that the lawsuits are aimed at re-establishing accountability and ensuring legal compliance: “This litigation is about securing justice, restoring accountability, and aligning conduct with the law.”
Allegations Include Unfair Competition and Misleading Practices
The legal complaints cite violations of California’s Penal Code and further allege breaches of the state’s Unfair Competition Law and the Consumer Legal Remedies Act. Plaintiffs are demanding restitution for funds lost by Californians who participated in the DFS contests, asserting that they were unknowingly involved in illegal gambling operations.
Despite the Attorney General’s strong statement, the opinion does not alter the legal status of DFS operations in the state. Because California law does not explicitly prohibit DFS, companies such as DraftKings, FanDuel, Underdog, and PrizePicks continue to operate in what many describe as a legal grey area.
DFS Legal Controversy Persists Amid Fresh Investment
As California intensifies its scrutiny of DFS legality, the broader fantasy sports sector continues to attract investor interest. Fantasy Life, a fantasy sports startup co-founded by fantasy football expert Matthew Berry, has recently secured a $7 million seed funding round. The new capital will support company growth, acquisitions, and the development of new features.
The round was led by LRMR Ventures, the investment firm of NBA legend LeBron James and entrepreneur Maverick Carter, with additional backing from SC Holdings, Wasserman Ventures, SUM Ventures, and others. Carter stated, “We’re always looking for opportunities to invest in smart, creative people and businesses that share our values. What Matthew, Eliot and the team are building with Fantasy Life hits on everything we look for.”
Individual investors in the round included high-profile names such as NFL great Larry Fitzgerald Jr., musician John Legend, and YouTube co-founder Chad Hurley. The company plans to use the funding to expand its offerings, including the integration of FantasyHQ, a new player data hub sponsored by Mike’s Hard Lemonade, and to support its recent acquisition of Guillotine Leagues.
While one part of the industry faces intense legal scrutiny, another continues to evolve and expand, highlighting the complex and fast-changing landscape of fantasy sports in the U.S.
Source:
‘’Class Action Lawsuits Target Major Online Fantasy Sports Operators in California and Seek Justice for Consumers, Says the Almeida Law Group’’, prnewswire.com, July 03, 2025.
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