Class action over DraftKings' legality in California likely to advance

SAN FRANCISCO (CN) — A federal judge said Thursday a class action claiming fantasy sports website DraftKings is conducting illegal gambling in California is likely to move forward, queuing up a legal fight over whether the court can prohibit paid daily fantasy sports in the state.

U.S. District Judge Charles Breyer revealed his initial impression is that the plaintiffs have standing to bring the case and the games at issue are prohibited by state law. The judge appeared to agree with DraftKings users’ claims that they suffered economic injury by putting their money toward fantasy sports contests misrepresented to them as legal in California.

“If in fact [plaintiff] can establish that he wouldn’t have parted with the money but for the misrepresentation, it then is material. And if it’s material, misrepresentation in which he parted with money, he’s been injured,” the Bill Clinton appointee said.

The lead plaintiffs, two DraftKings users, sued the fantasy sports website in June 2025, claiming the company misrepresents the lawfulness of their daily fantasy sports contests in California, a state that prohibits commercial gambling.

Breyer noted for the dismissal motion, he would assume the challenged games were unlawful in California, a claim that DraftKings denies.

Attorney Richard Patch of Coblentz Patch, representing DraftKings, argued the case should be dismissed because the plaintiffs didn’t suffer economic injury. Patch said arguments that the users would not have played the game if not for DraftKings’ supposed misrepresentation about the legality of the games were not material to the case because they got the game they paid for.

“They got a game that they wanted to participate in, and it went by the exact rules that were represented; it did work, they either lost or they won and they took the money,” Patch said. “They did that for 10 years in this state, and now they say, ‘We suffered economic injury because when we were doing it we thought it was legal and now we may not think it is legal.’”

Breyer questioned Patch on why DraftKings heavily advertises the legality of its games in California if representations about its legal status were immaterial to consumers’ decision to play the games.

“The fact is your client spent a lot of money telling people in California that it’s legal, when in fact the attorney general has said the opposite … It’s hard to believe it’s not material; if it’s not material, why advertise it?” he asked, adding: “Some people do care about not engaging in conduct that is illegal."

In July 2025, California Attorney General Rob Bonta issued an opinion saying that state law “prohibits the operation of daily fantasy sports games with players physically located within California, regardless of where the operators and associated technology are located.” However, attorney general opinions are only advisory and not legally binding.

Wesley Griffith of Almeida Law Group, an attorney for the plaintiffs, noted other service providers in the state such as Amazon don’t have to repeatedly make statements about the legality of their platform.

“You don’t spend a bunch of time on your website assuring consumers what you’re offering is legal unless you believe that is a sticking point that you’re going to lose transactions for,” he said. “Reasonable consumers understand gaming is highly regulated and the representations here were clearly material to the transaction.”

In their complaint, lead plaintiffs Zhicheng Zhen and Jonathan Smith argue DraftKings violated the state’s Unfair Competition Law and Consumer Legal Remedy Act. In their amended complaint, they tacked on additional violations of state law, RICO claims and requested declaratory relief.

While Breyer seemed unconvinced by the plaintiffs’ RICO and stolen property claims, he indicated the plaintiffs’ claims under the California Consumer Legal Remedies Act and Unfair Competition Law would likely move forward and may allow injunctive relief.

He added if he concludes the plaintiffs have standing and their claims avoid dismissal, the next step would be to consider a preliminary injunction blocking the games in the state of California.

“If there is standing, and the game falls within the statute, I don’t understand what the argument is about a general injunction that says you can’t do it here,” Breyer said. However, he noted the issue was “not for today.”

Breyer said he was likely to rule on the motion to dismiss within a week.

Representatives for either party did not respond to a request for comment.

In December 2025, Breyer dismissed the case with leave to amend because the plaintiffs were seeking equitable relief without demonstrating that monetary damages alone would be inadequate.

The judge contrasted their request for equitable monetary relief with an injunction — a common form of equitable relief that does not involve money.

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