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The California Nations Indian Gaming Association (CNIGA) has submitted a letter to the state attorney general contending that popular pick’em fantasy contests are illegal and violate the state’s prohibition on banking games.
CNIGA chairman James Siva submitted the letter dated January 31 to California attorney general Rob Bonta on behalf of the association’s 52 members.
Depending on how a fantasy sports contest is operated, Siva wrote that wagers on such contests may be prohibited under the California Constitution for at least two reasons. One reason is that fantasy sports wagers can, depending on how they are operated, fall under the state's constitutional prohibition on lotteries.
Certain types of pick’em games may also be operated as a type of prohibited casino-style gaming.
“The operator provides performance statistics for various athletes that participants then bet for or against,” Siva wrote about pick’em games. “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,” Siva wrote, “these DFS games run afoul of the state’s prohibition on banking games, which has been elevated to constitutional standing.”
Siva added that pick'em contests do not fall under one of the limited exemptions under the state constitution’s prohibitions on lotteries, such as the state lottery, wagers on horse races or tribal gaming.
“Many fantasy sports contest operators, therefore, are likely accepting consideration for such contests in violation of the prohibition on lotteries,” states the CNIGA letter, which also questions the legality of more traditional daily fantasy sports (DFS) games.
As reported by Vixio GamblingCompliance, Bonta is preparing a formal opinion regarding the legality of daily fantasy sports in their entirety under state law. The attorney general has not made public the comments submitted to his office, which were due by the end of January.
Vixio obtained CNIGA’s 16-page letter on Wednesday (February 7).
The Sacramento-based tribal gaming association also argues that pick’em games violate California Penal Code 337a(a), which prohibits entities and individuals from accepting bets upon the result of any contest of skill, speed, power, or endurance of a person or between persons.
“The state has not yet taken any actions against or made any determinations regarding the legality of the operation of pick’em games within the state,” Siva wrote.
“However, even assuming fantasy sports wagering is legal under the laws of the state, the pick'em games offered by major operators of said games, such as Underdog Fantasy and PrizePicks, do not qualify as lawful fantasy sports or contests but illegal sports wagering.”
In CNIGA’s comments, the association claims that participants of pick’em games are not managing a fantasy sports team but instead are placing parlay bets that involve the performance statistics of two athletes who participate in at least two different sporting events.
“Moreover, 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.”
Fantasy sports is currently unregulated in California but not explicitly illegal, with DraftKings and FanDuel, as well as Underdog and PrizePicks, all active in the state.
California's review of fantasy sports is part of a series of moves by states to scrutinize the pick'em fantasy contests offered by operators such as PrizePicks, Underdog, Sleeper and Betr.
Last year, New York and Michigan gaming regulators both adopted regulatory changes to prohibit the games, while Florida regulators sent cease-and-desist notices to prominent pick’em-style contest operators.
Bonta asked for comments from interested parties on the subject after Republican state Senator Scott Wilk submitted a letter requesting an opinion on the legality of DFS under California law in October.
In his request, Wilk argued that fantasy sports appear to be a game of chance, rather than a game of skill, reigniting the most common argument since daily fantasy games became popular nearly a decade ago.
As of Wednesday, it was still unclear when Bonta would release his opinion on the legality of daily fantasy sports.
