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SportsTranscript
00:00 (upbeat music)
00:02 - All right, updates on California.
00:04 We seem to be getting these every day,
00:07 but they really don't add up too much,
00:09 just more delays, more we'll sees,
00:12 more fighting in between lawmakers and tribal members
00:17 and things of that nature.
00:19 But now, even without sports wagering being legal,
00:23 daily fantasy is coming under some fire,
00:25 which is surprising to me because generally speaking,
00:27 a lot of this has happened
00:28 where sports betting is legalized
00:31 in the markets that they are.
00:32 Like the fighting goes on where,
00:34 hey, we're paying taxes, we're paying fees, you should too.
00:37 Why is California under fire here?
00:39 - Yeah, Craig, it's a great thing to point out.
00:42 You know, you speak about the fact
00:44 that we seem to have these investigations
00:46 into daily fantasy sports,
00:47 like pretty much every show I'm talking about a new state,
00:50 but you're absolutely right.
00:51 It's been mostly all states with sports betting
00:55 that want those companies to start paying taxes and fees
00:59 that sports betting operators pay.
01:01 But this is really interesting
01:02 'cause it's the largest market in the country
01:04 for daily fantasy sports,
01:06 about $200 million in contest entry fees
01:10 every year from California,
01:12 which has largely been a gray, unregulated market for years.
01:16 But now you have the California attorney general
01:19 coming out saying, hey, I'm gonna investigate
01:21 whether or not daily fantasy sports
01:23 is actually in our eyes, less skill-based
01:27 and more of a game of chance,
01:29 which would then likely make it illegal
01:32 under California's gambling laws.
01:33 Obviously, California is notorious
01:36 for not having sports betting.
01:38 The inquiry comes from a state senator who wrote a letter,
01:42 Senator Scott Wilk, to the AG's office about a month ago
01:46 saying, hey, you know, we just had these two propositions
01:48 that failed last year to get sports betting legalized,
01:51 but people clearly don't want it
01:53 or want whatever form of it exists.
01:55 But these daily fantasy sports apps seem to be very similar
01:59 and might violate our law.
02:01 So that's where the inquiry comes from.
02:02 Now the attorney general's looking into it.
02:04 Unlike those recent crackdowns in other states,
02:07 it would seem to involve all fantasy sports apps
02:10 that operate in California, including DraftKings,
02:13 including FanDuel, as well as the PrizePix
02:16 and Underdogs of the World,
02:17 which have gotten sort of in hot water
02:19 for their Pick'Em games,
02:20 which a lot of states have said are basically de facto
02:23 prop betting or parlay prop betting
02:26 that a sports book would offer.
02:27 So a similar inquiry actually came in 2015.
02:32 Basically another assemblyman said,
02:35 hey, Kamala Harris, who was the attorney general at the time,
02:38 this is the same thing.
02:39 Like this looks like it's sports betting.
02:41 Why have we not cracked down on it?
02:42 And her office never released an opinion on it.
02:44 So since then, it's just gone unregulated and untaxed
02:48 and there's been no movement.
02:49 But now all of a sudden you have the new attorney general
02:52 looking into this.
02:53 And I caught up with the Senator a little bit who said,
02:55 basically because we have a new attorney general now,
02:57 they might be more inclined to look into this
02:59 than the past one was.
03:01 And because of everything that's going on
03:03 with all this talk of legalizing sports betting
03:05 in California, it seems to be an especially prevalent issue.
03:09 So the investigation could take about nine months to a year,
03:13 maybe longer, based on the past kind of length
03:15 of investigations that the AGs in California have done
03:19 over the past year.
03:20 So it's a while before anything changes,
03:22 but boy, if this comes down and says no fantasy sports
03:26 or no daily fantasy sports in California,
03:28 that would be a huge blow,
03:30 mostly to the prize picks and underdogs
03:32 because they don't offer sports betting.
03:34 FanDuel and DraftKings, I'm sure would be fine.
03:36 I'm not happy about it,
03:37 but they'd be okay losing California fantasy sports
03:40 because they have such a hold
03:41 on the sports betting market elsewhere.
03:43 So definitely one of the more interesting developments
03:46 within this whole fantasy space in a while.
03:49 (upbeat music)
03:51 [MUSIC]