The Takeaway: Could DFS Operators Just Stay In California?
Gambling news roundup: MLB player is under investigation for unusual betting on two pitches; federal bill with changes to income tax for gambling winnings and losses set to become law.
Every Thursday in The Takeaway, The Closing Line provides commentary on trends and news in the gambling industry.
Just a short newsletter from me today before the Fourth of July holiday. God bless you if you are reading this with the long weekend coming up.
It’s late morning on Pacific time on July 3; we’ve been told to expect an opinion deeming real-money fantasy sports illegal from the California attorney general before July 4th. There’s still plenty of time for a news dump! (I’ll probably put something out later if that opinion does drop today.)
One outcome I previously downplayed could be picking up steam. Could the opinion from AG Rob Bonta come out, and the status quo persists? Meaning PrizePicks, Underdog, and others just keep doing business in the state?
The chances seem to be higher than zero, although I am not sure I could handicap it beyond that. Let’s take a second look at a statement from an Underdog spokesperson, with emphasis added by me:
“The court stated that the Attorney General’s forthcoming opinion on fantasy sports “does not effect any change in law” and does “‘not carry the weight of law.’” As a result, the court explained that the protective relief we sought was not necessary. We thank the court for that clarity and look forward to continuing to offer our fantasy contests in California.”
In reality, the court didn’t tell Underdog or anyone anything new. We already knew that an AG opinion doesn’t carry the force of law. It’s given a lot of weight in the courts, but an opinion =/= the law. That’s why it’s called an “opinion.” That statement doesn’t suggest we’ll see further legal action from Underdog.
So let’s game theory this out with a specific scenario that seems somewhat likely:
The AG opinion comes out today or sometime soon.
AG doesn’t do anything other than release an opinion (ie it doesn’t issue cease-and-desist letters or take any other legal action).
Would DFS operators leave if that’s what happens? I am not so sure as we sit here. Operators could still go to court to try to stop enforcement of the opinion, but that could end up being more fraught than doing nothing. Perhaps it turns into a giant game of chicken. The opinion comes out, but will the state do anything to enforce the opinion?
We learned this from Underdog’s court filing (again, emphasis added by me):
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.
Also, remember we’re still operating under the understanding that an opinion is coming, but we don’t know exactly what it says, and it still hasn’t been released! I have not heard anything firm about any potential enforcement. The “threat” of enforcement action doesn’t mean we’re guaranteed to get enforcement action.
Ignoring the opinion would mean some risk for operators, but the alternative of leaving a state that accounts for a huge part of their addressable market is pretty terrible too.
If/when the opinion comes out, it will be interesting to see how operators react. We already have some dissonance between the two largest operators. While Underdog went to court before the opinion came out, PrizePicks decided to change to peer-to-peer only in California. And that’s just two out of dozens.
If you want some more words on this topic, check out this post from Legal Sports Report.
Ifrah Law has been at the center of advancing iGaming in the U.S., shaping groundbreaking legislation, leading precedent-setting cases, and guiding clients that span the iGaming ecosystem through every phase of their business journey. Learn more at IfrahLaw.com.
Gambling news roundup
Sources: Guardians' Luis Ortiz under investigation over alleged gambling (ESPN): “Cleveland Guardians right-hander Luis Ortiz is under investigation by Major League Baseball after a betting-integrity firm flagged a pair of pitches that had received unusual gambling activity, sources told ESPN on Thursday.
Sources said betting-integrity firm IC360 sent two alerts in June to sportsbook operators regarding Ortiz, whom MLB has placed on "non-disciplinary paid leave" through July 17. The first alert, according to sources who reviewed them, was sent June 15 and triggered by action on Ortiz's first pitch against the Seattle Mariners in the bottom of the second inning to be a ball or hit batsman. Ortiz opened the inning with a slider well outside the strike zone. The second alert, sent June 27, referenced Ortiz's first pitch against the St. Louis Cardinals in the top of the third inning being a ball or hit batsman. Ortiz opened the inning with a slider even farther outside the strike zone. Both alerts flagged bets in Ohio, New York and New Jersey. Betting on the result of first pitches is offered by some sportsbooks, which such wagers commonly referred to as microbets.”
All the news from the world of prediction markets:
A ‘Big Beautiful’ Blow? Here Are the New Ways U.S. Sports Bettors Could Get Squeezed (Covers): In the span of just a few weeks, state and federal lawmakers from across the U.S. have apparently decided it’s time to squeeze sports bettors and gamblers just a little bit more. The decision that could have the broadest impact is the amendments recently slipped by the U.S. Senate into President Donald Trump’s baby, the ‘One Big Beautiful Bill Act.’ That change to the Internal Revenue Code would make it so gamblers can only deduct losses equal to 90% of their winnings, rather than 100%. Gambling-related expenses would now be lumped in with losses as well. In other words, a gambler who eked out a profitable year could still find themselves in the red come tax time.
This is now all but a done deal; the bill is going to pass the House today unaltered and will be signed by Trump tomorrow.
The ‘Arbitrage Consultants’ Promising Risk-Free Sports Betting (WSJ, paywall): “Meet the sports-betting whizzes who use math and first-time user credits to help bettors win big.”
Fewer Fourth of July visitors anticipated for Las Vegas (Las Vegas Review-Journal): Las Vegas is projected to see fewer Fourth of July tourists and slightly lighter hotel occupancy rates for the upcoming three-day holiday weekend, according to the Las Vegas Convention and Visitors Authority. Las Vegas is expected to see 340,000 visitors over the long weekend with a hotel occupancy rate of 93.1 percent Friday compared with visitation of 344,000 and an occupancy rate of 94.4 percent a year ago, said LVCVA Research Center Director Kevin Bagger.
Hasbro Strikes New Multi-Year Casino Licensing Partnerships (press release): “Hasbro, a leading games, IP, and toy company today announced a new slate of multi-year licensing partnerships aimed at transforming and expanding its most popular brands across the casino category. After a comprehensive review and market evaluation, Hasbro has selected Aristocrat Technologies, Evolution, Galaxy Gaming, and Bally’s as its newest partners in casino licensing. The new partners join existing licensee Sciplay. The announcement underscores Hasbro’s “Playing to Win” strategy, revealed in February 2025, which focuses on innovation, partnerships, and bringing beloved brands to life across more formats than ever.”
“We’re all about play—and that means meeting our fans wherever they are, from the game table to the casino floor,” said Claire Hunter Gregson, Director, Gaming Relationships. “These visionary new partners have the expertise and imagination to reimagine our brands in bold, exciting ways for adult audiences.”
Following is the list of partners:
Aristocrat Technologies – B2B manufacturer land-based slot machines (MONOPOLY)
Evolution – B2B developer for online slots and live casino (MONOPOLY, Hasbro Games)
Galaxy Gaming – B2B developer and manufacturer for casino table games (MONOPOLY, YAHTZEE, BATTLESHIP)
Bally’s – B2C Online casino operator (MONOPOLY)
Bragg Gaming Expands U.S. Content Footprint with Fanatics Casino Tri-State Launch (press release): “Bragg Gaming Group is pleased to announce the launch of its newest games and Remote Gaming Server (RGS) technology with Fanatics Casino across New Jersey, Michigan and Pennsylvania. Fanatics Casino is America’s fastest growing online casino and is available in Michigan, New Jersey, Pennsylvania and West Virginia on iOS, Android and desktop. Players are invited to dive into a world of thrills as Fanatics Casino brings the casino floor directly to a customer's fingertips, whether on-the-go or in front of a computer. Players can explore a wide array of classic and modern casino games, including slots, blackjack, roulette, progressive jackpots and video poker.”
“Players in these states will benefit from access to Bragg’s full catalogue, including titles from Bragg’s in-house proprietary content development studios, a roster which includes Atomic Slot Lab and Indigo Magic and Wild Streak Gaming, all through Bragg Gaming’s Remote Games Server (RGS) technology, delivered via the Bragg HUB platform.”
“In addition, titles from Bragg’s multiple studio partners, including Incredible Technologies, Bluberi, King Show Games and Sega Sammy Creation will also be available to players in all three regulated markets along with top-performing titles like ‘Cai Fu Emperor Ways’ and ‘Queenie’ and a host of other elevated content from Bragg’s Atomic Slot Lab studio.”
WNBA’s Chicago Sky Announces First-of-Its-Kind Partnership with Moonshot to Protect Players from Online Threats and Abuse (press release): “Today (July 1), the WNBA’s Chicago Sky announced an innovative partnership with Moonshot, a global leader in countering online threats, to leverage national security technology to keep the team’s full roster safe. As the first team in the league to deploy this type of technology, the Chicago Sky is setting the standard for how sports organizations can proactively address online hate, harassment, and abuse targeting athletes. Moonshot’s goal is not just to understand the problem, but to solve it. Moonshot’s dedicated team of online security experts will use advanced technology to identify and remove concerning content, assess credible risks, take actions to mitigate harm, and help the Sky interpret the underlying drivers of online abuse.”
“Hate and harassment have no place in sports,” said Nadia Rawlinson, Co-owner and Operating Chairman of the Chicago Sky. “Our partnership with Moonshot is about proactively tackling online hate, harassment, and abuse across social media and on the dark web, so our players and coaches can focus on the game of basketball and delighting our fans around the world.”
Want to sponsor The Closing Line?
You can email dustin@closinglineconsulting.com for more information.
FanDuel’s Trusted Voices: Conversations About Betting is designed to equip adults, including parents and coaches, with tools and resources to talk to young people about gambling, including information on warning signs, risks and proxy betting. The program is led by retired professional basketball player Randy Livingston and his wife, basketball agent Anita Smith, who share their personal stories related to problem gambling, with the hope of preventing others from experiencing similar harms. Learn more and join the conversation here.
