Class action over DraftKings’ legality in California likely to advance

A California court has indicated that a class action lawsuit challenging the legality of DraftKings' paid daily fantasy sports may proceed, with the possibility of an injunction blocking the company's operations in the state.

In a significant development for the daily fantasy sports industry, a California judge has signaled that a class action lawsuit against DraftKings is likely to advance. The lawsuit, which challenges the legality of DraftKings' paid daily fantasy sports in California, may result in an injunction blocking the company's operations in the state.

The lawsuit in question was filed by several plaintiffs who claim that DraftKings' paid daily fantasy sports violate California law. The plaintiffs argue that the games constitute illegal gambling under California Penal Code § 326.1, which prohibits betting on sporting events with prizes exceeding $500. DraftKings has maintained that its operations are legal and compliant with state regulations.

The judge's indication that the lawsuit will proceed is significant for several reasons. Firstly, it suggests that the court may be willing to consider the plaintiffs' arguments that DraftKings' paid daily fantasy sports violate California law. Secondly, the possibility of an injunction blocking DraftKings' operations in the state could have far-reaching implications for the company's business model and revenue streams.

The outcome of this matter has not yet been reported, but it is clear that the class action lawsuit against DraftKings will continue to be closely watched by industry stakeholders. Practitioners should monitor developments in this case as they may have implications for the daily fantasy sports industry and the regulation of online gaming more broadly.