Underdog is asking the Sacramento Superior Court to stop California Atty. Gen. Rob Bonta from releasing his opinion on the legality of DFS.
The lawsuit, filed Monday and first reported by SBC Americas, notes that 10% of Underdog’s business comes from California.
Underdog is basing its case on the fact the attorney general’s office lacks the authority to issue the opinion that could shut down the state’s daily fantasy market. That opinion is expected this week.
“Without this Court’s immediate intervention, this unlawful gambit may succeed,” reads a memorandum of points supporting the request for a temporary restraining order. “Underdog faces imminent irreparable harm—from fleeing customers, risk-averse banks and payment processors, and the loss of investment and goodwill—if the Attorney General issues the opinion as planned.
“Because Underdog received only days’ notice of the legal tidal wave that will arrive by Thursday, it timely seeks an ex parte temporary restraining order (TRO) to preserve the status quo that has persisted in California for decades.”
Underdog: Bonta ‘certainly’ wrong on DFS legality
Underdog is confident that the attorney general’s office has two things wrong: its opinion on daily fantasy and its authority to give that opinion.
“Absent relief from this Court, Attorney General Rob Bonta will issue an opinion later this week that will decimate fantasy sports in California,” reads the memorandum supporting the TRO request. “Attorney General Bonta should be enjoined from doing so, not because he is wrong in his views on the legality of fantasy sports—though he certainly is—but because by statute, the Attorney General can only issue opinions on questions of law and can only answer questions that relate to the duties of the official requesting the opinion.
“Neither is true here. Thus, Attorney General Bonta lacks authority to issue the opinion and should be enjoined from doing so.”
DFS companies would feel ‘pressure’ to leave
One of Underdog’s lawyers, David Gringer of Wilmer Cutler Pickering Hale and Dorr LLP, supplied a declaration in support of the temporary restraining order concerning his discussions with the AG office.
“The representative further stated that after releasing the opinion, the goal of the Attorney General’s office would be to use the threat of an enforcement action—that would rely on the interpretation of California law announced in the opinion—to pressure Underdog into agreeing to leave California entirely,” the filing reads.
“The representative reported that the California Attorney General’s office is looking to the release of a similar opinion on fantasy sports from Texas Attorney General Ken Paxton, which led to a company pulling its paid fantasy sports products from the state, as its model.”
The Texas ruling is from January 2016 when Paxton ruled daily fantasy counted as gambling under state law.
Cites AG office guidelines
Gringer notes he asked the AG office’s representative about specific guidelines that explain when an attorney general must issue opinions:
“When asked about the limits imposed by Section 12519, the representative responded that the California Department of Justice believes the Attorney General is obligated to answer all questions posed by legislators regardless of whether they are questions of law in requests for opinions under Section 12519.”
That is not true, suggests Gringer. He included a link from the attorney general’s office that outlines what those guidelines are.
According to the guidelines, an AG must issue written opinions when asked by a legislator, but only when that opinion relates “to their respective offices.”
