California Attorney General Archives - CasinoBeats http://casinobeats.com/tag/california-attorney-general/ The pulse of the global gaming industry Thu, 17 Jul 2025 13:04:36 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.1 https://casinobeats.com/wp-content/uploads/2025/01/cropped-favicon-32x32.png California Attorney General Archives - CasinoBeats http://casinobeats.com/tag/california-attorney-general/ 32 32 Underdog Fantasy Shifts to Peer-to-Peer Format in California Following AG Opinion on DFS http://casinobeats.com/2025/07/17/underdog-fantasy-california-champions-dfs/ Thu, 17 Jul 2025 13:04:30 +0000 https://casinobeats.com/?p=157712 As the legal status of daily fantasy sports (DFS) in California remains uncertain, Underdog Fantasy has quietly altered its offerings in the state, replacing its Pick ‘Em contests with a peer-to-peer “Champions” format. The change follows a July legal opinion issued by California Attorney General (AG) Rob Bonta, which deemed DFS illegal in the state. […]

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As the legal status of daily fantasy sports (DFS) in California remains uncertain, Underdog Fantasy has quietly altered its offerings in the state, replacing its Pick ‘Em contests with a peer-to-peer “Champions” format.

The change follows a July legal opinion issued by California Attorney General (AG) Rob Bonta, which deemed DFS illegal in the state. Although the opinion does not change the law, it signals increased scrutiny and potential enforcement risks for DFS operators.

The switch by Underdog is not surprising. Rival PrizePicks made a similar transition in anticipation of Bonta’s decision. The two companies, along with other DFS operators, have made changes to the formats in various states under regulatory scrutiny regarding player-vs-house DFS.

How’s “Champions” Different Than Pick ‘Em?

The most significant difference between the two formats is the user’s opponent.

In Pick ‘Em, players compete against the house by predicting over/under outcomes on individual player stats. For example, whether Patrick Mahomes will throw over or under 300 yards.

The house determines Pick ‘Em contest odds. Winnings are based on fixed multipliers, which depend on the number of correct picks. For example, two correct picks award a 3x multiplier, while eight correct picks result in the player winning 120 times their stake.

There are also additional options, such as Flex picks (which offer lower payouts but allow for missing a pick) and “Rivals,” where users select which of two athletes will outperform the other.

In contrast, in the “Champions” format, users compete against each other in a pool. The entire funding comes from entry fees. Participants create a roster of 2-8 athletes and predict whether each athlete will perform higher or lower than a benchmark statistic.

Correct stat predictions earn Champions Points, and the entry with the most points wins. The amount each participant wins depends on their performance compared to their peers.

As the Champions format removes the house as a participant, it could offer a stronger legal defense in states like California, where playing against the house is classified as illegal gambling.

It’s the same legal rationale behind the cardrooms in the state employing third-party dealers, known as Third-Party Proposition Player Services, something Bonta wants to change.

DFS’ Uncertain Status in California

The Attorney General’s opinion does not change the law in California. It serves as an advisory interpretation of the law, intended to guide lawmakers and enforcement agencies.

For DFS to be classified as illegal, lawmakers must pass a new law or the courts must intervene. Still, some observers note that California courts traditionally side with the Attorney General’s legal opinions.

Until a regulatory or legislative change occurs, DFS platforms will likely continue operating in California.

Bonta is not the first AG to grapple with the legality of DFS. In 2016, attorneys general in Hawaii, Alabama, and Texas declared DFS illegal under their respective state laws. However, the response varied.

Hawaii has remained off-limits for anything gambling-related, including daily fantasy. In Alabama, PrizePicks continues to offer Pick ‘Em, while Underdog has switched to the Champions format. Meanwhile, multiple platforms, including Underdog and PrizePicks, offer Pick ‘Em in Texas.

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California Attorney General Declares DFS Illegal: What It Means for Fantasy Sports Fans http://casinobeats.com/2025/07/04/california-ag-declares-dfs-illegal/ Fri, 04 Jul 2025 10:58:15 +0000 https://casinobeats.com/?p=150330 California Attorney General (AG) Rob Bonta has issued his highly anticipated legal opinion on daily fantasy sports (DFS), and it confirms what many expected: DFS contests are illegal under state law. Bonta’s office released its opinion on July 3. It categorizes DFS contests as illegal wagering under Penal Code section 337a. It falls foul of […]

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California Attorney General (AG) Rob Bonta has issued his highly anticipated legal opinion on daily fantasy sports (DFS), and it confirms what many expected: DFS contests are illegal under state law.

Bonta’s office released its opinion on July 3. It categorizes DFS contests as illegal wagering under Penal Code section 337a. It falls foul of the code given participants pay money in exchange for a chance to win, based on the uncertain future performance of real-world athletes.

The AG emphasized that even though skill may be involved (an argument Underdog Fantasy raised in a lawsuit against Bonta), that does not exempt DFS from being considered illegal wagering.

Bonta Argues Draft-Style DFS is Not a Skill Game

In the 33-page opinion, Bonta says that draft-style DFS games violate state law. He argues that they function similarly to wagering on sports events rather than skill-based contests.

The AG draws a distinction between draft-style DFS and traditional season-long fantasy leagues. In both, users select a team of real-world athletes in upcoming sporting events. But, unlike season-long contests, draft-style DFS contests are decided by each athlete’s performance in a single game.

In draft-style DFS, participants select athletes using various methods, which may involve skill. Still, they do not compete in or influence sports events. Their success depends entirely on outcomes beyond their control, much like sports betting.

The AG emphasizes that the decisive factor remains the athletes’ on-field performance, which resembles wagering on horse racing or sports betting.

Furthermore, Bonta points out that operators collect fees and set prize structures that do not depend on the number of entrants. That makes the contests more similar to traditional gambling products than to recreational competitions.

Bonta concludes that under Penal Code section 337a, which prohibits betting on sports contest outcomes, draft-style DFS falls under the definition of illegal gambling in California.

All Pick’ Em DFS Deemed Illegal

Bonta also addresses Pick ‘Em-style DFS contests, which have surged in popularity but have attracted intense scrutiny.

In these contests, users select two to six athletes and predict whether each will exceed or fall short of a specific performance benchmark. An example is whether Steph Curry will score five threes in a game.

Bonta concludes that Pick’ Em contests are essentially proposition (or props) bets available at traditional sportsbooks. As with draft-style DFS, the AG concludes that Pick’ Em DFS is illegal wagering in California.

“As with many traditional sportsbook bets, pick ’em players place a bilateral wager against the game operator. The player and operator each ‘promise[] to give money…upon the determination of an uncertain or unascertained event’ (the sports competitions) being resolved ‘in a particular way'”

Bonta says his opinion falls in line with other state regulators, including in Arizona, Florida, Virginia, and Wyoming. These states have declared that Pick’ Em DFS is a form of parlay or props betting.

Furthermore, the California Attorney General addresses peer-to-peer Pick’ Em formats. Many operators, including recently PrizePicks in California, have adopted these newer contests to sidestep legal challenges and regulatory scrutiny.

In peer-to-peer contests, users play against each other. The odds and payouts are determined by each user’s performance relative to the other players in the pool.

However, Bonta’s opinion makes it clear that these contests are also illegal wagering, because players risk money on the outcomes of third-party sports performances.

Season-Long Fantasy Contests Not Addressed

Notably, Bonta did not address traditional, season-long fantasy sports contests as the request that prompted his opinion specifically asked for a decision on DFS.

Still, the AG emphasized the difference between DFS and season-long fantasy numerous times. The latter is often played among friends and small groups for entertainment, involving low or no financial stakes.

While Bonta does not explicitly address season-long fantasy contests, some legal experts believe his reasoning could extend to them in the future. According to Adjunct McGeorge School of Law Professor Chris Micheli, based on his DFS opinion, Bonta “would find the same way for the seasonal [fantasy contests].”

Governor and Operators Disagree

Shortly after Bonta released the opinion, according to his office, Gov. Gavin Newsom disagreed with it:

“The Attorney General, in his independent capacity, issued this opinion — not the Governor’s office,” noted Izzy Gardon, a spokesman for Gov. Newsom.

“While the Governor does not agree with the outcome, he welcomes a constructive path forward in collaboration with all stakeholders.”

J.T. Foley, Executive Director of the Coalition for Fantasy Sports, said the coalition agrees with the governor. He emphasized that the opinion does not change the law:

“The law has not changed, a fact the last two Attorneys General, Kamala Harris and Xavier Becerra, recognized as they specifically declined any similar action. We are hopeful the Attorney General heeds the Governor’s call to find a constructive solution that preserves the games that California sports fans love.”

The Coalition for Fantasy Sports represents companies like Underdog Fantasy, PrizePicks, Betr, Dabble Fantasy, and Splash Sports.

Is DFS Now Illegal in California?

Despite the strong language in Bonta’s opinion, Attorney General opinions do not alter the law. They act as an advisory interpretation of the law, intended to guide enforcement agencies and lawmakers.

In the court rejection of Underdog Fantasy’s lawsuit attempting to block the opinion, Sacramento County Superior Court Judge Jennifer Rockwell emphasized this as well:

“Further, the Attorney General’s issuance of an opinion of pursuant to Government Code section 12519 does not effect any change in the law,” citing case law stating that “the opinions of the California Attorney General are advisory only and do not carry the weight of law.”

For DFS to become illegal, the legislature or courts would need to act. That means a court ruling or an explicit statutory change. Still, legal experts, including Micheli, note that California courts traditionally grant “a fair amount of deference” to the Attorney General’s legal opinions.

Bottom Line: Daily fantasy sports contests are not yet illegal in California. Still, the Attorney General’s opinion increases the legal risk and sets the stage for potential enforcement or legislative action.

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California AG DFS Ban Opinion Expected Today as Court Blocks Underdog’s Challenge; PrizePicks Quickly Adapts http://casinobeats.com/2025/07/03/underdog-california-dfs-lawsuit-denied-prizepicks-pivot/ Thu, 03 Jul 2025 10:32:46 +0000 https://casinobeats.com/?p=149609 As California’s Attorney General prepares to issue a legal opinion on the future of daily fantasy sports (DFS) in the state, Underdog Fantasy has failed to block it, which could effectively ban its contests. At the same time, rival PrizePicks has already pivoted to a peer-to-peer model in anticipation of this shift. California Attorney General […]

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As California’s Attorney General prepares to issue a legal opinion on the future of daily fantasy sports (DFS) in the state, Underdog Fantasy has failed to block it, which could effectively ban its contests.

At the same time, rival PrizePicks has already pivoted to a peer-to-peer model in anticipation of this shift.

California Attorney General (AG) Rob Bonta is expected to issue a long-awaited legal opinion on DFS legality as soon as today. The opinion, although technically advisory, is likely to have a significant ripple effect on operators and potentially reshape the state’s multibillion-dollar DFS market.

Underdog Challenged Bonta’s Upcoming Decision

Underdog Fantasy, one of the biggest DFS operators in the country, filed a lawsuit on June 30. It asked the courts to block Bonta from issuing the opinion.

The operator argued that DFS contests are games of skill, not chance (which constitutes gambling).

The company also questioned Bonta’s authority to issue such an opinion. It pointed out that the opinion would be a response to a request made by Sen. Scott Wilk, who is no longer in office.

Furthermore, Underdog claimed that a potential DFS ban would only serve to benefit native tribes. The tribes, which have exclusivity over legal gambling in California, have long argued that unregulated sectors, such as fantasy sports, are illegal gambling.

Court Denies Underdog’s Lawsuit

On July 2, Sacramento County Superior Court Judge Jennifer Rockwell denied Underdog’s motion for a temporary restraining order.

One of the reasons Judge Rockwell refused to block Bonta’s upcoming opinion was that Underdog did not demonstrate that the opinion would cause them immediate, irreparable harm.

Additionally, the judge noted that since Sen. Wilk made the request in October 2023. That means Underdog had over a year and a half to challenge it. The delay weakened the operator’s argument for emergency relief.

Rockwell also emphasized that the AG’s opinion does not change the laws:

“Further, the Attorney General’s issuance of an opinion of pursuant to Government Code section 12519 does not effect any change in the law,” citing case law stating that “the opinions of the California Attorney General are advisory only and do not carry the weight of law.”

As a result, Rockwell concluded:

“Accordingly, Petitioners have not established that they will suffer any harm as a result of the issuance of Opinion No. 23-1001. The Ex Parte Application is denied. No hearing will be held.”

It remains unclear whether Underdog will appeal the decision.

PrizePicks Changes Offerings in California

Underdog’s rival, PrizePicks, took a different approach in anticipation of Bonta’s anticipated opinion.

The company changed its product format in California, discontinuing the popular against-the-house Pick ‘Em games on June 30. It now offers only its peer-to-peer “Arena” contests in the state.

In both formats, users select performance projections for two to six players. For example, if a quarterback will throw over a certain number of yards. The difference is that in the now-discontinued format, users play against the house, which determines the odds and payouts.

Meanwhile, in the “Arena” peer-to-peer, the odds and payouts are determined by each user’s performance relative to the other players in the pool, similar to traditional fantasy contest leaderboards. The prize pool is distributed among the top finishers.

PrizePicks’ pivot is not unprecedented. The company introduced peer-to-peer contests as a response to regulatory scrutiny in several states over the past few years.

As a similar scenario is unfolding in California, PrizePicks is likely aiming to position itself on firmer legal ground. California is the largest DFS market in the US, making the stakes particularly high.

In its lawsuit, Underdog Fantasy stated that the state accounts for approximately 10% of its revenue. That suggests that PrizePicks may face a similar level of exposure.

If California were to ban DFS, it would result in severe financial consequences for PrizePicks, Underdog, and other operators, such as DraftKings and FanDuel.

AG’s Opinion Could Come Today

Bonta’s office has not confirmed when he will release his opinion. Still, Sacramento news outlet KCRA 3, which first broke the news, claims multiple sources have indicated the AG would deliver it by today.

When Underdog filed its lawsuit, some speculated that it might delay Bonta’s decision. However, with Judge Rockwell denying the lawsuit, it now appears to remain on schedule.

Still, if Underdog files an appeal, it could mean additional delays.

It’s important to note that, as the judge emphasized, Bonta’s legal opinion does not change the law.

Still, McGeorge School of Law adjunct professor Chris Micheli notes that California courts traditionally grant “a fair amount of deference” to the Attorney General’s legal opinions. That means they can strongly influence future enforcement and policy decisions.

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Underdog Fantasy Sues California AG to Stop DFS Ban, Cites Lack of Authority and Tribal Interests http://casinobeats.com/2025/07/01/underdog-fantasy-sues-california-ag-dfs-ban/ Tue, 01 Jul 2025 15:56:40 +0000 https://casinobeats.com/?p=149393 Underdog Fantasy has filed a lawsuit against California Attorney General Rob Bonta to block his forthcoming opinion that could ban daily fantasy sports (DFS) in the state. The company argues that DFS contests are games of skill; therefore, they are legal in California. It also claims Bonta is overreaching his legal authority by attempting to […]

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Underdog Fantasy has filed a lawsuit against California Attorney General Rob Bonta to block his forthcoming opinion that could ban daily fantasy sports (DFS) in the state.

The company argues that DFS contests are games of skill; therefore, they are legal in California. It also claims Bonta is overreaching his legal authority by attempting to issue a statewide ban.

Underdog also claims that prohibition would not protect consumers. Instead, it would serve the interests of California native tribes, who seek to eliminate competition.

The operator warns that banning DFS would result in severe financial consequences for the company and the state. Meanwhile, it would deprive millions of California players of a game that has been around for decades.

While unconfirmed, multiple sources expect that Bonta will deliver his opinion by July 3.

Underdog Argues DFS Are Games of Skill

The operator emphasizes that DFS contests rely on skill, not chance. According to the lawsuit, participants’ skills influence their success in DFS. They include their ability to analyze player statistics, matchups, and other factors.

Underdog claims that participants who utilize those factors and build the most competitive roster are similar to a general manager in traditional sports.

The company further claims that DFS participants do not wager on the outcome of a single event. Instead, they create lineups of athletes from different teams, with points awarded based on the combined performance of these athletes over time, rather than in a single game.

The plaintiff supports its position by citing an Illinois Supreme Court case (Dew-Becker v. Wu), in which it ruled that DFS contests are predominantly determined by skill. The court rejected the state’s Attorney General’s opinion that DFS is illegal gambling.

Moreover, Underdog cites studies by statistical and economic experts. The studies concluded that DFS outcomes depend on the contestant’s skill in assembling the best fantasy roster.

AG Lacks Authority, Says Underdog

One of the central arguments of the DFS operator lawsuit is that Bonta lacks the legal authority to issue an opinion on a DFS ban.

Underdog asserts that the AG’s role does not involve making determinations that lead to new regulatory decisions. Instead, it only provides legal interpretations to current state officials on “any question of law relating to their respective offices.”

The plaintiff points out that the original request for Bonta’s opinion was by former Senator Scott Wilk, who is no longer in office. That, the company says, further invalidates Bonta’s authority to act.

Underdog emphasizes that determining whether DFS violates California law requires extensive fact-finding. That includes analyzing whether skill outweighs chance in contest outcomes, which goes beyond a straightforward legal interpretation:

“Ultimately, the Attorney General cannot determine whether DFS contests are prohibited under California law without some consideration and ascertainment of the relevant facts. In other words, at the core of the requested opinion, the Attorney General is being asked ‘whether the facts satisfy the [relevant legal] standard,’ which is not a purely legal question.”

Moreover, the lawsuit highlights that several previous attorney generals, including former Vice President Kamala Harris, declined to issue opinions on the legality of DFS, acknowledging the need for legislative or judicial resolution.

Underdog Claims a Ban Would Only Benefit Tribes

Underdog claims the ban would primarily benefit California’s tribal gaming industry rather than protecting consumers:

“The opinion, which Bonta’s predecessors declined to issue, will satisfy only one constituency, a small handful of the powerful tribes that maintain a monopoly on gaming in the State. On information and belief, the tribes have met numerous times with Attorney General Bonta and his representatives and lobbied for the opinion to be issued.”

Underdog further emphasizes that former Senator Scott Wilk made the original request prompting this opinion. The company claims Wilk “has notably been a supporter of tribal gaming-backed initiatives in the past.”

California’s tribal groups have historically sought regulatory interventions to eliminate competition from DFS operators and cardrooms, arguing that these entities infringe on the tribes’ exclusivity under their gaming compacts.

Moreover, Bonta is also facing backlash due to his recent proposals targeting California’s cardroom industry. The AG argues the changes aim to redefine operational rules for cardrooms. However, opponents claim they will have a detrimental effect on municipal budgets. They say that the changes will also result in the loss of thousands of jobs.

Critics of these changes echo Underdog’s argument that Bonta’s actions are a regulatory overreach.

In contrast, organizations representing California tribes, such as the California Nations Indian Gaming Association (CNIGA) and the Tribal Alliance of Sovereign Indian Nations (TASIN), have publicly supported the Attorney General’s move to ban DFS.

Tribal representatives maintain that the opinion is crucial to addressing what they call “illegal and unregulated gaming.”

Economic Consequences and Broader Impact

Underdog warns that a DFS ban in California would result in severe economic consequences for the company and the state’s broader gaming market. The company claims that 10% of its revenue comes from California. A potential ban would cause immediate and lasting financial harm.

“Specifically, the issuance of the opinion would severely and irreparably impair Underdog’s relationships with service providers, business partners, and investors, both in California and nationally. It would also cause many of Underdog’s customers in California to withdraw money from their accounts and irreparably damage the Company’s reputation and goodwill among its customers in the State. None of these harms would be compensable through monetary damages.”

Underdog also warns that a ban could trigger widespread job losses and shutter legitimate businesses, further harming California’s economy.

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California May Soon Ban Online Fantasy Sports Platforms http://casinobeats.com/2025/06/26/california-dfs-ban-expected-attorney-general-opinion/ Thu, 26 Jun 2025 15:50:10 +0000 https://casinobeats.com/?p=148666 California may soon ban daily fantasy sports as AG Rob Bonta prepares to declare DFS contests, including pick ’em games, illegal gambling.

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Daily fantasy sports (DFS) contests are under threat in California, as Attorney General Rob Bonta is expected to issue an opinion declaring all DFS platforms illegal. That includes controversial pick-’em style contests that resemble sports betting.

While Bonta’s office has not confirmed this, Sacramento news outlet KCRA 3 reports that multiple sources have confirmed that a formal opinion should arrive within days.

A potential ban could force operators such as DraftKings, FanDuel, PrizePicks, and Underdog Fantasy to withdraw from the nation’s largest market, jeopardizing hundreds of millions in annual handle.

Bonta Was Asked For a Legal Opinion

A decision by Bonta stems from a request by lawmakers and tribal gaming leaders. They argue that DFS is unregulated gambling and undermines tribal exclusivity, following voters’ rejection of sports betting in 2022.

Earlier this week, the California Nations of Indian Gaming Association and the Tribal Alliance of Sovereign Indian Nationals sent a letter to California lawmakers, warning them that DFS operators might be working to push legislation regarding their legal status in the state.

McGeorge School of Law adjunct professor Chris Micheli feels that if Bonta believes that DFS operators violate the Penal Code, he would file a lawsuit to enforce his interpretation of the law.

The courts will ultimately decide the matter. Still, Micheli notes that California courts traditionally grant “a fair amount of deference” to the Attorney General’s legal opinions.

Tribal leaders have welcomed the news of a potential ban. In contrast, the Coalition for Fantasy Sports stated that the opinion would be devastating to millions of Californians who enjoy playing fantasy sports.

It is expected that the California Department of Justice will release the opinion by July 3rd.

Several States Have Questioned Pick-’Em DFS

California is far from alone. Several other states have already taken action against one of the fastest-growing DFS formats: pick ’em contests.

These contests, available at platforms like PrizePicks and Underdog Fantasy, allow users to predict individual player stats. For example, whether an NBA player will have more than five rebounds in a game.

Critics claim that this type of DFS contest closely resembles player prop bets available at regulated sportsbooks, classifying it as illegal gambling.

States that have cracked down on pick ’em DFS include:

  • Arkansas: In 2024, the state’s gambling regulator deemed that the contests violated gambling laws.
  • Florida: In 2023, the state sent cease-and-desist letters to operators deeming pick ’em contests illegal.
  • Illinois: In April this year, the gambling regulator sent cease-and-desist letters to operators.
  • Michigan: Passed a law in 2023 banning pick ’em DFS contests.
  • Kansas: Sent cease-and-desist letters in 2024.
  • New York: In 2023, it adopted regulations to ban DFS contests that mimic sports betting.
  • Wyoming: In 2023, it warned operators of felony and multi-million dollar charges.

In addition to these states, Colorado lawmakers are debating whether the contests are legal. The actions by the state gambling regulators have forced platforms to stop offering the controversial contests in these jurisdictions.

Despite the challenges, DFS operators have begun adapting to the scrutiny by adjusting their products. That includes the introduction of peer-to-peer props or parimutuel-style contests.

Last month, Underdog Fantasy relaunched draft-style DFS in New York after reaching a $17.5 million settlement with the state.

Cardrooms and Sweepstakes Casinos Are Also Under Threat in CA

Daily fantasy sports aren’t the only target. California is also moving against two other gaming sectors that have long operated in legal gray areas: cardrooms and sweepstakes casinos.

Recently, Bonta proposed changes to the state’s gaming laws governing cardrooms. Those include changes to rules concerning third-party dealers, known as Third-Party Proposition Player Services (TPPPS), and restrictions on blackjack-style games.

Cardrooms and native tribes have long clashed as the tribes have exclusivity over gambling in the state, but California gave a compromise to the cardrooms through TPPPS.

By using a third-party dealer, cardrooms technically do not offer banked games (where players play against the house), which are exclusive to native tribes. The tribes, however, argue that the cardrooms offer illegal gambling.

Bonta’s changes include that only seated players can act as TPPPS, and they must rotate. He also proposes changes that essentially ban the game of blackjack. His proposals have met significant backlash from city officials, business owners, and the general public.

Meanwhile, a proposal to ban sweepstakes casinos in California surfaced earlier this week. In addition to prohibiting the platforms, the proposed legislation makes it illegal to promote sweepstakes casinos. That could get several celebrities in hot water.

They include Drake, who has a deal with Stake.us, Paris Hilton, who promotes WOW Vegas, Ryan Seacrest, who endorses Chumba Casino, as well as John Daly, who has been featured in Modo’s social media posts and promotions.

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Attorney General Bonta’s Proposal to Restrict Blackjack in California Cardrooms Sparks Backlash http://casinobeats.com/2025/06/02/attorney-general-bontas-proposal-to-restrict-blackjack-in-california-cardrooms-sparks-backlash/ Mon, 02 Jun 2025 11:08:35 +0000 https://casinobeats.com/?p=111247 California Attorney General Rob Bonta’s recent proposed changes to the state’s gaming laws governing cardrooms have sparked opposition among city officials, business owners, and the general public.  At the heart of their concern is the potential loss of 5,000 jobs and up to 50% of local tax revenue. Bonta’s office claims the changes intend to […]

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California Attorney General Rob Bonta’s recent proposed changes to the state’s gaming laws governing cardrooms have sparked opposition among city officials, business owners, and the general public. 

At the heart of their concern is the potential loss of 5,000 jobs and up to 50% of local tax revenue.

Bonta’s office claims the changes intend to clarify gaming laws and enhance cardroom regulation. 

However, critics argue the measure will significantly cripple municipalities, which hevily rely on the tax revenue for community programs such as public safety projects and senior programs.

In California, only native American tribes can run “banked games.” These are casino games where the player plays against the dealer, such as blackjack and baccarat. 

However, cardrooms have found a loophole where third-party providers, not casino employees, act as dealers.

What Changes to California Cardrooms Are Proposed?

Bonta’s changes are centered around third-party dealers, known as Third-Party Proposition Player Services (TPPPS), and restrictions on blackjack-style games.

According to the proposal, only players seated at the table can act as TPPPS. They must rotate every 40 minutes. Also, TPPPS would not be allowed to settle wagers unless they’re occupying the player-dealer seat directly.

While not banning blackjack, Bonta’s proposal calls for significant changes to the game:

  • Elimination of the “bust” feature, where the player or dealer automatically loses if their score is higher than a certain number.
  • Prohibition of the target point count of 21.
  • Removal of terms “blackjack” and “21” from the games offered.
  • In a “push,” the player would automatically win.

If implemented, the new rules will significantly slow down the pace of the games.

New Law Would Cripple Local Economies

After Bonta introduced the proposals, the Attorney General’s office began holding public meetings to explain the changes and to hear feedback from stakeholders.

At one meeting last week at the Gardens Casino in Hawaiian Gardens, concerned business leaders, local politicians, and cardroom employees voiced their opposition to the changes.

One of them was Hawaiian Gardens Mayor Dandy De Paula, who said that cardrooms contribute 78% of the city’s general fund:

“We strongly oppose the Attorney General introducing unwarranted regulations to games that have been played legally for decades, and that will devastate—and worst yet—potentially bankrupt our city,”

“We rely on our cardroom not only to provide high-quality jobs but for the tax revenue generated that makes up over 78% of our city’s general fund.”

Other municipalities, like Commerce and Bell Gardens, where cardrooms account for 50% of their general fund, also face economic uncertainty under the new rules.

Meanwhile, local businesses would also suffer as they would lose the business of cardroom players.

The Standardized Regulatory Impact Assessment (SRIA) report, prepared by Berkeley Economic Advising and Research, supports these claims. SRIA was commissioned by the attorney’s office and the California Department of Justice.

According to SRIA, the new rules would result in losses of $464 million for card rooms. Meanwhile, tribal casinos would gain $232 million.


The report’s conservative estimate also indicates that card rooms will lose 364 full-time jobs per year over the next decade. That equals over 3,600 full-time jobs lost.

A Growing Legal Battle Over Gaming Rights

Bonta’s proposed regulatory changes are part of the ongoing legal and political conflict between cardrooms and tribal casinos.

California gave tribes exclusivity over casino games in 2000. At the same time, it gave cardrooms a compromise through the TPPPS rule. However, as time passed, new laws expanded the types of games cardrooms can offer. That now includes versions of blackjack, table poker, and pai gow.

The tribes have long protested against this and claim that cardrooms are illegally offering games with tribal exclusivity. 

Following the 2016 tribal gaming compact, three tribes sued the cardrooms, but the U.S. District Court dismissed their claims, ruling that they lacked the necessary sovereignty to bring the lawsuit.

Meanwhile, in the 2022 midterm elections, two cardrooms filed a lawsuit in the Los Angeles Superior Court, challenging a ballot initiative to legalize sports betting. Nine tribes led the initiative, which would’ve allowed roulette and craps at tribal casinos.

The native tribes did score a small victory. In 2024, after a two-year effort, California passed the Tribal Nations Access to Justice Act (TNAJA). TNAJA grants the tribes sovereignty to sue cardrooms for violating state restrictions on banked games.

The tribes initiated the lawsuit shortly after TNAJA took effect on January 1.

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