California AG Plans Ban on DFS Contests by July 3rd

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00:00So a report on legalsportsreport.com that you contributed to and it's a big story we led with

00:05it out of California obviously is that the Attorney General Rob Bonta has announced his

00:10decision to ban all DFS daily fantasy sports contests in the state and plans to do so before

00:17July 3rd. You know I guess for one how surprising is this to you and two because there's so much

00:25pushback in the belief that this should be up to the voters not one singular member of office

00:31is this going to hold is this going to happen? Yeah well first I just want to preface this with

00:37saying that he's expected to make this decision on July 3rd nothing official has actually happened

00:42yet but you know how news goes once you know sources come out and say something everyone

00:47kind of gets behind it and his office has given us no reason to believe that that won't be the case so

00:52it is very much expected that on July 3rd the Attorney General will come out with this opinion

00:56saying that all daily fantasy sports contests are basically illegal gambling and sports betting which

01:03we know isn't allowed in California. Now the surprise factor you know California has had a very strong

01:10stance against sports betting for a long time. We saw in 2022 that the sports books spent a tremendous

01:16amount of money I think over 220 million dollars to get sports betting legalized on the ballot that

01:24failed tremendously mainly because of a huge pushback from the state's tribes which spent almost 200 million

01:29against that ballot proposition so the tribes have exclusivity over sports betting in California which

01:37basically means unless they say so it won't get legalized they have tremendous lobbying influence and

01:42tremendous power and they've had pretty much looked at daily fantasy sports these are companies like

01:47prize picks and underdog fantasy which offer these pick'em style parlay contests you know very similar to

01:55parlays where you put $10 to win 50 or something if you get two combinations right on a player prop

02:00they've come out and said this is illegal gambling which a lot of other states have done as well

02:05the tribes see this as something that infringes on their rights so it's no surprise that this is kind of

02:10what ended up happening because the tribes have so much power but it is a little surprising the timing

02:17of it you know we can go all the way back to 2015 when Kamala Harris was the attorney general of the

02:22state this issue was presented before her as well her office was tasked with reviewing whether or not

02:28these daily fantasy sports apps even back then you know much less of what they are now whether that was

02:33legal gambling her office didn't do anything about it they kept reviewing it never made a decision her

02:38predecessor after that didn't do anything about it and Rob Bonta who's now the attorney general has been

02:43reviewing this for about two years so the timing you know why now there was recently a bill that was that had been

02:52pushed in the legislature it never got introduced but it would have legalized daily fantasy sports and basically

02:58made protections for these companies like prize picks and underdog which really looked to California as their major

03:03market this is again a state without sports betting it's a huge state so a lot of people go to you know

03:09other options there that are very similar to sports betting that bill fell apart kind of at the last

03:13minute it came right as the tribe sent a letter to the legislature and presumably used their lobbying

03:19influence to get this done so yeah we've been waiting on this opinion for a while and all of a sudden

03:24it's happening at a time when the tribes are again in contact with the state and apparently there's going

03:30to be some sort of deal worked between the tribes and the sports betting companies which also don't

03:36like the DFS companies they see them as competitors who basically don't have to follow the same rules

03:40they do you know they're in California the sports betting companies are not so they're apparently

03:45working on a deal that would legalize sports betting so the timing of this kind of all makes sense

03:49when you look into what's going on behind the scenes with the other parties now again you know sports

03:55betting is not going to be legal in California for some time even if they do get a deal it couldn't be on the

04:00ballot until at least 2026 which means that it probably wouldn't get implemented until 2028 and it might not

04:06even be on the ballot until 2028 if they do get a deal done there so this could create a vacuum where there's

04:11really no similar sports betting options available in California you got to wonder if that means you know

04:17offshore sports books will do better business in the state whether companies like Calci which we'll talk about in a

04:23minute will do more business in the state you know these adjacent sports betting models that

04:27haven't been cracked down on yet but so far it's not looking good for the fantasy sports companies

04:32that have tried really hard to stay in the state July 3rd we'll know more but it's expected that

04:37they'll be out soon

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