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California remains the largest U.S. state without legalized sports betting, and that fact sits at the center of a class-action lawsuit accusing DraftKings of running illegal gambling operations there.
U.S. District Judge Charles Breyer told attorneys in San Francisco on July 23 that his initial view is that two DraftKings customers have standing to sue and that the daily fantasy sports, or DFS, contests they wagered on are likely prohibited under state law. The Clinton appointee said the plaintiffs adequately alleged economic injury by paying to play games the company allegedly misrepresented as legal.
“If in fact [the plaintiff] can establish that he wouldn’t have parted with the money but for the misrepresentation, then it is material,” Breyer said. “And if it’s material … he’s been injured.”
Amended complaint adds racketeering claims
Plaintiffs Zhicheng Zhen and Jonathan Smith sued DraftKings in June 2025, alleging the company violated California’s Unfair Competition Law and Consumer Legal Remedies Act by advertising its DFS contests as legal despite a state ban on commercial gambling.
Breyer dismissed the case in December, with leave to amend, after finding the plaintiffs hadn’t shown that money damages alone would be inadequate. Their amended complaint added racketeering allegations and a request for declaratory relief, though Breyer indicated Thursday those claims are less likely to survive than the consumer-protection counts.
DraftKings attorney Richard Patch, of Coblentz Patch, argued the case should be dismissed because the plaintiffs received exactly the games they paid for, regardless of the platform’s legal status.
“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,'” Patch said.
Breyer pushed back, asking why DraftKings spends heavily to advertise the legality of its games in California if that claim carries no weight with consumers. Plaintiffs’ attorney Wesley Griffith, of Almeida Law Group, made a similar point, contrasting DraftKings with companies like Amazon that don’t need to reassure customers their products are lawful.
California AG opinion adds pressure, but isn’t binding
The dispute is complicated by a July 2025 opinion from California Attorney General Rob Bonta, which found that state law “prohibits the operation of daily fantasy sports games with players physically located within California.” Attorney general opinions carry no binding legal force, but Breyer indicated it gives the court a basis to move the case forward.
If the claims survive dismissal, Breyer said the next step would be weighing a preliminary injunction that could block DraftKings’ fantasy contests statewide — though he cautioned that question was “not for today.”
Breyer said he expected to rule on the dismissal motion within a week of the hearing. As of July 29, no decision had been issued, according to Law360. Case details, including the amended complaint’s added claims, were confirmed via Almeida Law Group, which represents the plaintiffs. DraftKings did not respond to a request for comment.
