California's Crackdown on Fantasy Sports and Betting

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00:00let's start off in california they're in the news a lot for sort of taking a step back away from not

00:06just sports betting but all of the other different elements that go along with it prediction markets

00:11and i guess daily fantasy is potentially the next one i know sam if i'm not mistaken i read somewhere

00:17correct me if i'm wrong by the way that underdog was uh was the one that was the most outspoken

00:22about this because a lot of their business came from cal or comes from california's dfs industry

00:28so i would guess that they're going to have to try to figure out some pivot if this happens

00:33yeah no you're spot on with that assessment craig underdog was the only company that sued to stop

00:39this opinion from coming out from attorney general rob bonta it's been this thing actually that he's

00:45been working on or had been working on for the past two years and lawmakers all the way back to 2015

00:512016 and basically asked the attorney general in the state um hey we don't have uh our law says

00:58that sports betting is not legal here this thing called daily fantasy sports is existing it sure

01:03looks a lot like sports betting to us this is of course not a new argument we've heard in this space

01:08uh they've asked the attorney general to kind of figure out the law interpret the law and see what he

01:13thinks underdog sued to stop that opinion from coming out the judge ruled that they you know they

01:19couldn't do that and the opinion came out anyway so now the big question is what's next the attorney

01:24general issued this opinion saying that companies like underdog prize picks fanduel draft kings uh all

01:30offering fantasy sports um it's illegal and shouldn't be allowed those companies have not exited the

01:36state they're very much still there now underdog and prize picks uh did change the mechanism of their

01:41games which we talked about a few weeks ago from player versus house to pure to peer fantasy which has

01:47satisfied concerns in other states but it remains to be seen whether that will satisfy concerns in

01:53california you know if i had to bet on it i wouldn't think so because the opinion itself talks about

01:58all forms of daily fantasy sports not just how the mechanism mechanism is but again back to what is

02:05actually going to happen here bonta came out this week and said oh yeah i fully intend to enforce

02:09this opinion i didn't just issue this opinion for fun but we really don't know what enforcement looks

02:15like here we've had attorney generals in states like texas come out with opinions and then not be

02:20able to enforce them we actually have the judge um in the lawsuit the underdog filed to stop this from

02:25coming out say that okay the attorney general can't really do anything or change the law here it's

02:30non-binding it doesn't carry the weight of a law suggesting that maybe there would need to be a law

02:34put in place to kind of codify this interpretation now he could send cease and desist those companies

02:40might not comply with them um but again california huge state like you mentioned for these fantasy

02:45sports companies we haven't seen them exit the state after this opinion like they did in other

02:50places like wyoming um where they kind of just said okay it's not worth um you know it's not worth it

02:55for us again the state without sports betting so it's a huge business for these um you know pick

03:00them fantasy companies as well and kind of underneath this whole thing is why the opinion came out now why

03:06this fight is going on um bonta is running for re-election in 2026 and uh campaign records show

03:12that 70 000 was donated from tribal gaming groups to his campaign tribal gaming groups obviously really

03:19want uh fantasy sports or daily fantasy sports companies out of the state as they also see them

03:25like illegal forms of sports betting which is infringing on their rights they've been instrumental

03:29in the prediction markets battle as well filing filing a lawsuit earlier this week uh that would

03:35kind of get these sports betting quasi sports betting industries out of the state so um it's going to

03:42be a really interesting political fight uh we're talking about here with the ag with the tribal groups

03:48with fanduel draft kings their fantasy providers and then prediction markets baked in as well it's

03:53going to be a really interesting report um it's quite a mess in california right now

03:54it's quite a mess in california right now

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