The day the grey zone got smaller
On 3 July 2025, the California Department of Justice published Legal Opinion No. 23-1001, signed by Attorney General Rob Bonta and authored by deputy AG Karim J. Kentfield. Reading it cold, I knew the California daily fantasy landscape had just shifted. Not because it announced anything operationally new — DFS operators had been running California contests for over a decade under contested legal interpretation — but because the AG’s office had finally put a specific, sourced, four-paragraph answer onto the question that had been sitting open since the Murphy decision in 2018. Pick’em DFS and draft-style DFS, said the Opinion, are both forms of betting on sporting events in violation of Penal Code section 337a.
That sentence ended the grey zone. Not in operational terms — DFS operators were still accepting California entries the day after the Opinion was released — but in legal-position terms. There is no longer a defensible reading of California law under which pick’em or draft-style fantasy contests are clearly legal. There is only the gap between the Attorney General’s published view and the enforcement actions that have or have not followed.
This piece is about what the Opinion actually says, where it leaves UFC fantasy contests specifically, and what the enforcement environment has looked like in the months since.
What Opinion 23-1001 actually says
The Opinion is unusually direct for an AG product. Most AG opinions hedge, identify multiple legal pathways, and decline to issue conclusions on close calls. Opinion 23-1001 does the opposite. The text states explicitly: We conclude that participants in both types of daily fantasy sports games — pick’em and draft-style — are placing “bets” on sporting events in violation of section 337a.
The Opinion was preceded by a multi-year inquiry initiated by a request from a state senator, and the analysis works through the statutory text, case law, and operational mechanics of modern DFS contests to reach its conclusion.
The core argument runs as follows. Section 337a prohibits the placing of any “bet” on a sporting event. The legal definition of a bet under California law requires three elements: consideration paid, an outcome dependent on contingent events, and a prize. DFS contests, both pick’em and draft-style, meet all three. The entry fee is consideration. The outcomes of the underlying sporting events — including UFC fights — are contingent. The prize pool distributed to winning contests is the prize. The contest mechanic — assembling a lineup or making pick’em selections — does not transform the underlying activity into something other than betting on the sporting events.
Bonta supplemented the written Opinion with public remarks that left no ambiguity about how the AG’s office views the matter. It is a violation of the law, as we set forth in our official Opinion, to provide a platform in the state of California to California consumers for daily fantasy sports. The Opinion is the first thing we were asked to provide, and we provided it. Next step is our enforcement.
That last sentence — “next step is our enforcement” — is the line that DFS operators have been parsing carefully ever since.
Pick’em vs draft-style — and why the Opinion treats them identically
The reason the Opinion went out of its way to address both formats is that DFS operators had spent the previous several years trying to argue that pick’em contests were structurally different from draft-style contests in ways that should affect their legal treatment. The Opinion rejects that argument explicitly.
Pick’em DFS is the format popularised by PrizePicks, Underdog Fantasy and similar operators. The mechanic is simple: the operator publishes statistical projections for individual athletes (often UFC fighters), and the user selects whether each athlete’s performance will be “more” or “less” than the projected number. A user might pick “More than 60 significant strikes for Fighter A AND More than 1.5 takedowns for Fighter B AND Less than 25 minutes for the fight to end.” Get all three right and win a multiplier on the entry fee. The product looks and feels like a series of prop bets stacked into a single contest.
Draft-style DFS is the format associated with DraftKings and FanDuel’s fantasy products. The user “drafts” a lineup of athletes under a salary cap, with the lineup competing against other users’ lineups based on real-game statistical performance. The product looks and feels like fantasy sports as the format has existed since the 2000s.
The operator argument was that pick’em is essentially prop betting and should be regulated as such (illegal), while draft-style is genuine fantasy with a multi-athlete portfolio structure and should be exempt (legal). The Opinion declines to engage with that distinction. Its analysis focuses on the underlying transaction — the user is paying consideration to enter a contest where the outcome depends on sporting events and a prize is at stake — and concludes that both formats meet the section 337a definition. The structural differences between pick’em and draft-style do not, in the Opinion’s view, change the underlying legal character.
Operator responses — partial exits, structural reshuffling
The DFS operator response to Opinion 23-1001 has been varied. The strongest response came from the pick’em operators most directly targeted by the Opinion’s reasoning. PrizePicks announced changes to its California offering in the months following the Opinion, shifting some California contests to a peer-to-peer structure where users are theoretically matched against each other rather than against the operator. Whether that structural change addresses the Opinion’s analysis is contested — the AG’s office has not signed off on it, and the underlying argument that pick’em remains a wager on sporting events appears to survive the peer-to-peer reframing.
Underdog Fantasy made similar adjustments to its California product, with some contest types modified and others maintained under the operator’s view that they fall outside the Opinion’s scope. The pattern across pick’em operators is a slow operational hedge — neither fully exiting California nor fully accepting the Opinion’s conclusions — that creates ambiguity for users and a continued exposure profile for the operators themselves.
DraftKings and FanDuel, which operate draft-style DFS rather than pick’em as their core California offerings, took a different posture. Both continued to operate California DFS contests after the Opinion, on the implicit position that their products remain legal under their own legal interpretation. Neither has issued formal disagreement with the AG’s reasoning in public. The operational reality is that draft-style fantasy continues to be available to California users at the time of writing, with the legal question deferred to whatever enforcement action might eventually test it.
UFC-specific DFS contests have continued across both formats throughout the post-Opinion period. The mechanics — picking strike totals, finish probabilities, fight outcomes — are exactly the activity the Opinion addresses. Operationally, very little changed in July or August 2025. Legally, everything changed.
Enforcement so far — patient, not absent
The state of California’s enforcement posture in the months following Opinion 23-1001 has been a study in patience. No DFS operator has been criminally charged. No mass cease-and-desist letters have been issued. No civil enforcement actions have moved to public docket. The Attorney General’s office has signalled that enforcement is the next step, but the timeline and method have not been disclosed.
The patient posture is, in some ways, the more interesting story than an aggressive one would have been. The AG’s office is functionally inviting operators to voluntarily comply with the Opinion’s conclusion, while reserving the right to enforce against those who do not. That posture serves several purposes. It reduces the political cost of enforcement by giving operators time to exit voluntarily. It avoids the spectacle of a sudden enforcement sweep against major operators with significant California user bases. And it forces the operators into the position of either complying without a fight or maintaining an exposure profile that grows with every passing month.
The risk for operators is asymmetric. The risk for California residents who continue using DFS products for UFC contests is more limited. Bonta’s enforcement language has focused on operators — “a platform in the state of California” — rather than individual users. Section 337a has historically been enforced against operators rather than bettors as a matter of prosecutorial practice. That does not mean users have zero exposure. It means user exposure, while not zero in theory, is operationally low. The deeper analysis of California’s broader gambling law architecture in 2026 — including how the Opinion fits with section 337a, AB 831, and the standing tribal-gaming framework — is in my overview of California sports betting law.
What it means for UFC fans in California
The practical effect of Opinion 23-1001 on a California UFC fan who has been using DFS products is more about clarity than about immediate disruption. The product is still available. The contests still settle. The deposits still process. What has changed is the legal posture of the activity from “contested grey zone” to “explicitly illegal under California law per the AG’s published opinion.” That shift matters even when enforcement has not arrived, because the legal posture affects how downstream institutions treat the activity — banks, payment processors, employer compliance programs, tax preparers handling related income.
The operators continuing to serve California users are running an exposure that grows over time. The users continuing to enter contests are operating in a jurisdictional space the state has now defined as unlawful, with the enforcement question deferred but not abandoned. For someone weighing whether to keep using DFS products for UFC contests in California, the calculus is not “is this legal” — the AG has answered that question. The calculus is “what is the practical risk that an enforcement action eventually reaches me as a user, and how do I value the entertainment relative to that risk.” That calculus will look different for different people. The honest read is that user-level enforcement risk is currently very low and operator-level enforcement risk is currently moderate and growing. Both numbers are subject to revision when the AG’s office decides to take the second step the office has already signalled.
