California Has Banned Commercial Gambling For Over 150 Years. FanDuel Ignored All Of It.

California’s gambling prohibitions are not fine print. They are among the oldest statutes in the state’s criminal code, and they cover exactly what FanDuel does.

• Since 1872, California Penal Code Section 330 has made it a crime to operate any “banking or percentage game” for money. A banking game is one where the house takes on all contestants; a percentage game is one where the house takes a cut of the wagering pool. FanDuel’s rake model fits both definitions.
• California Penal Code Section 337a prohibits pool selling, bookmaking, receiving or holding money wagered on any contest of skill or any unknown contingent event, recording bets, and accepting wagers. California courts have confirmed that entry fees in online fantasy sports are legally “bets” and “wagers.” The taking of a single bet is enough to constitute bookmaking under California law.
• Penal Code Sections 319, 320, and 321 prohibit lotteries: any scheme to distribute property by chance among people who paid for that chance. When multiple contestants choose the same players on a given day, chance determines who wins and how much. California courts have confirmed this dynamic directly applies.
• Penal Code Section 337j requires anyone operating a “game of chance” to first obtain all required federal, state, and local licenses. FanDuel holds no California gambling license because California has not issued any for this type of product.
• California Business and Professions Code Section 19801(d), reaffirmed by the state legislature in 2008, states plainly: “no person in this state has a right to operate a gambling enterprise except as may be expressly permitted by the laws of this state.” FanDuel has never been expressly permitted.

These laws have a specific carve-out that makes FanDuel’s situation worse, not better. The partial decriminalization for small-scale gambling in California explicitly excludes online betting: the reduction “does not apply to any bet, bets, wager, wagers, or betting pool or pools made online.” There is no loophole. There was never a loophole.

Californians Voted No. FanDuel Kept Operating Anyway.

The gambling industry tried to buy its way into California law in 2022. California voters stopped it by one of the largest margins in state ballot history.

• Proposition 26 in November 2022 would have legalized in-person sports betting at tribal casinos and introduced new table games like roulette and craps. It was rejected by approximately 67% of voters.
• Proposition 27 would have legalized online sports betting in California, created a new licensing division within the California Department of Justice, imposed a 10% revenue tax, and funded homelessness prevention. The online sports betting industry — which includes FanDuel’s parent company Flutter Entertainment — spent $150 million on political ads to pass Prop 27. It was rejected by 82% of voters, one of the largest defeat margins for any California ballot measure in modern history.
• Despite these clear democratic rejections, FanDuel did not exit California. It continued operating its daily fantasy sports product and continued collecting money from California residents, simply by relabeling sports wagering as “fantasy” and insisting the legal analysis was different.
• The industry spent $150 million arguing online sports betting was safe and beneficial. Californians said no anyway. FanDuel’s response was to keep running the same core product under a different name.

FanDuel’s Rake Machine: How They Took Your Money Bet By Bet

FanDuel Fantasy is not a competition between friends. It is a commercial gambling operation with FanDuel acting as the house, taking a guaranteed cut of every dollar wagered regardless of who wins or loses.

• Users pay an entry fee to join a “contest.” FanDuel collects all entry fees from all participants, pools them into a single prize pool, records every bet in its digital ledger (its “betting book”), and then determines winners by comparing users’ fantasy team performance against real-world athlete statistics. This is textbook pool selling and bookmaking under California Penal Code 337a.
• FanDuel then pays out winners from the prize pool — but only a portion of it. The difference between what FanDuel collected and what it paid out is the “rake.” The rake is FanDuel’s profit extracted directly from the losing players’ entry fees.
• On June 28, 2025, a WNBA single-game tournament collected $4,761 from 529 participants but only paid out $4,000, giving FanDuel a rake of 19% on the total wagering pool.
• A second WNBA contest the same day collected $2,376 from 264 participants and paid out only $2,000, a rake of 18.8%.
• A “1K Sat MLB Grand Glam” contest collected $1,155 from 35 participants with a $33 minimum bet and paid out only $1,000, a rake of 11.5%.
• A “MLB Full Roster” mobile app contest collected $222 from 11 participants at a $2 minimum and paid out only $200, an 11% rake.
• Users had no control over the outcome. The result of every contest was determined entirely by real athletes’ in-game performances during real sporting events — events the user could not influence in any way.

The complaint documents this rake pattern across multiple contest types, sports, and platforms (website and mobile app), on the same day. It was not a pricing error or an edge case. It is FanDuel’s business model.

FanDuel Built A System Specifically Designed To Make Illegal Gambling Look Legal

FanDuel did not accidentally mislead California users. The complaint documents a layered, intentional system for manufacturing false trust in the product’s legality.

• FanDuel’s main landing page features a “Where Can I Play” map that displays California as a green, approved state for FanDuel Fantasy. This map appeared at the end of television commercials and on the website. Plaintiff Gilbert Criswell specifically relied on this map when creating his account.
• For its traditional “Sports Betting” product, FanDuel correctly showed California as unavailable — the state is grayed out on that product’s map. This two-track display — legal for Fantasy, not legal for Sports Betting — was designed to signal to users that FanDuel had done the legal analysis and determined Fantasy was the lawful option.
• California users who tried to access FanDuel’s Sports Betting product were redirected by FanDuel to FanDuel Fantasy “in the meantime,” with language strongly implying Fantasy was already authorized while Sports Betting was pending approval. This framing was false. Neither product was authorized.
• FanDuel requires users to authorize location sharing before exploring the site and requires active location sharing to place any bet. The company presents this requirement as a compliance measure, reinforcing the impression that FanDuel monitors its users’ locations to ensure legal compliance. In California, it tracked users’ locations while running an illegal operation against them.
• FanDuel’s rules page lists different minimum age requirements by state. For Texas, FanDuel explicitly includes a disclaimer saying it makes no representations about legality. For California, no such disclaimer exists. This deliberate omission signaled to California users that the service was cleared for use.
• FanDuel describes itself as “America’s #1 Sportsbook and the premier mobile sports betting operator in the U.S.” on its own website. The complaint notes that users reasonably treated this self-presentation as expert authority on gambling law. FanDuel exploited that trust.
• Beyond the website, FanDuel spent approximately $500 million per year on advertising and saturated online resources with claims that daily fantasy sports are legal in California. This made it nearly impossible for ordinary users to discover the truth through independent research.

Ten Years of Operation: The Chronology of FanDuel’s California Extraction

What This Actually Cost The People Who Trusted Them

Gilbert Criswell is a San Francisco resident. He watched television ads featuring Rob Gronkowski and the Manning brothers. He saw FanDuel’s map with California highlighted in green. The map was on screen during the Super Bowl. He believed it. He made an account. He placed bets on football and baseball. He lost money.

He is not stupid. He is not careless. He is exactly the person FanDuel built its $500 million-a-year advertising machine to reach: a sports fan who trusts a brand that presents itself as legitimate because it acts like a legitimate business. It uses celebrity endorsements. It partners with the NFL, NBA, MLB, and NASCAR. It runs a website that looks like every other legal gambling site. It makes you enable location sharing so it can check whether you’re in the right state. You hand over your location, and it takes your money anyway. And you have no way to know that’s what is happening, because FanDuel buried the legal question under a decade of marketing and a green checkmark on a map.

There are hundreds of thousands of Californians who did the same thing Criswell did. The complaint estimates Californians contribute roughly 10% of all DFS entries nationally, with DFS platforms extracting approximately $200 million in entry fees per year from the state. That money came from people who were never told they were participating in an unlicensed gambling operation prohibited by the state’s criminal code.

The California legislature explicitly recognized, when re-examining gambling law in 2008, that “gambling can become addictive and is not an activity to be promoted or legitimized as entertainment for children and families.” The legislature wrote that into the California Business and Professions Code. FanDuel’s product is, by design, built for repeat engagement: short contest windows, multiple rounds per day, contests running simultaneously across MLB, NBA, WNBA, NASCAR, and NFL. The system is designed to feel like entertainment. It is designed to generate another entry fee.

The people who lost money to FanDuel in California were not told they were gambling illegally. They were not told the entity collecting their money had no license. They were not told California’s voters had rejected this exact product by a 4-to-1 margin just three years earlier. They were told to share their location, pick some players, and play.

The Documents That Prove It: Verbatim From The Court Filing And Government Record

These are direct quotes from the class action complaint and from official California government sources. Nothing below is paraphrased.

“California law prohibits the operation of daily fantasy sports games . . . . Such games constitute wagering on sports in violation of Penal Code section 337a.”

“Although sports wagering in all forms remains illegal in California, online daily fantasy sports betting is proliferating throughout the state. Through these online platforms, a participant pays to enter a contest in which they may win a prize depending on how well athletes perform. Although the participant may utilize their knowledge of a particular sport in choosing their ‘team’ of players, how well those players perform during a game is completely out of the participant’s control. As such, daily fantasy sports appears to be a game of chance not otherwise permitted by the laws of California.”

“FanDuel intentionally and strategically leads — in fact, misleads — consumers into believing that its operation of the Gambling Websites in California is legal.”

“FanDuel knew (or should have known) that its gambling operations in California were illegal, but despite that induced Plaintiff and the Class to gamble and lose money through its Gambling Websites while in California. As the California legislature has repeatedly made clear, ‘no person in this state has a right to operate a gambling enterprise except as may be expressly permitted by the laws of this state.'”

“[T]he online sports betting industry, with the Washington Post reporting that ‘the industry ultimately spent $150 million on political ads’ in an attempt to legalize online gambling in California.”

Who Owns This Operation: Flutter, FanDuel Inc., And FanDuel Limited

• FanDuel, Inc. (Delaware) and FanDuel Limited (UK) are both named as operators in FanDuel’s own Terms of Use. Both are defendants. FanDuel Limited is not registered with the California Secretary of State.
• Flutter Entertainment PLC is an Irish corporation and the parent company of both FanDuel entities. It is also not registered with the California Secretary of State. All three entities are named defendants.
• The lawsuit also names Does 1-10, which are currently unidentified individuals or entities who facilitated FanDuel’s unlawful practices. Plaintiff reserves the right to identify and name them as discovery proceeds.
• The amount in controversy exceeds $5,000,000, exclusive of interest and costs — the legal threshold that gives the federal court jurisdiction under the Class Action Fairness Act.

The Broader Damage: Who Gets Hurt When Illegal Gambling Goes Unregulated For A Decade

Public Health

The California legislature embedded public health concerns directly into gambling law. The complaint flags these documented harms to California residents.

• California Business and Professions Code Section 19801(c) states explicitly that “gambling can become addictive and is not an activity to be promoted or legitimized as entertainment for children and families.” This legislative finding is part of the same code FanDuel violated by operating without authorization.
• The complaint notes that online sports betting operators are currently facing lawsuits across the country specifically related to the addictive design of their platforms. Those addiction-centered claims are separate from this lawsuit, but the lawsuit’s factual record acknowledges the addictive architecture as background context.
• FanDuel Fantasy is built for repeat short-cycle engagement: contests reset daily or within a single game, and users are encouraged to enter multiple contests across multiple sports simultaneously. This structure is designed to maximize re-entry, which is the behavioral loop that enables compulsive gambling.
• California consumers had no regulatory body overseeing FanDuel’s operations, no responsible gambling requirements enforced by a licensed regulator, and no mandatory disclosures about odds or house edge. They had no consumer protections because FanDuel was operating outside the legal framework entirely.

Economic Inequality

The financial extraction from California is not evenly distributed. The people most targeted by gambling advertising are typically lower-income sports fans, and the rake model guarantees the house always wins.

• Approximately $200 million in entry fees is extracted from California DFS players annually, according to the California Business Journal. This money flows to FanDuel and its parent Flutter Entertainment, an Irish corporation. None of it was taxed as gambling revenue, because FanDuel was not licensed to operate and paid no California gaming tax.
• The rake on individual contests ranged from 11% to 19% on documented June 2025 contests. By comparison, legal regulated gambling is typically required to maintain specific minimum payout percentages under state law, and those requirements exist to protect consumers. FanDuel operated with zero such obligation in California.
• The class potentially includes hundreds of thousands to millions of California residents. The lawsuit documents the harm as “all amounts paid to FanDuel and/or total of net losses” — meaning the recovery model is designed to address the actual financial extraction, not just a token amount.
• FanDuel’s arbitration clause — which it attempted to enforce — includes a one-year statute of limitations on all claims, a provision that Plaintiff argues is void. If enforceable, this clause would have stripped most California users of any ability to recover money lost before late 2024, protecting nearly a decade of illegal profits.
• FanDuel spent approximately $500 million per year on advertising according to MediaRadar reporting cited in the complaint. California is the single largest DFS market in the country. A significant portion of that advertising spend was directed at Californians to maintain and grow an illegal revenue stream.

Putting The Numbers In Human Terms

Who To Contact, What To Demand, And How To Fight Back

The lawsuit is filed. Here is every lever available to California residents right now.

The Defendants: Corporate Leadership

• FanDuel, Inc.: Delaware corporation, headquartered in New York, NY. [REDACTED – Specific executive names not in source material]
• FanDuel Limited: UK corporation, US headquarters in New York, NY. Not registered with the California Secretary of State. [REDACTED – Specific executive names not in source material]
• Flutter Entertainment PLC: Irish parent corporation, US headquarters in New York, NY. Not registered with the California Secretary of State. [REDACTED – Specific executive names not in source material]

Regulatory Watchlist

• California Department of Justice / Attorney General’s Office: The AG has already issued Opinion No. 23-1001 confirming DFS is illegal. Contact the AG’s office to demand enforcement action against all DFS operators currently running paid contests in California. Website: oag.ca.gov
• California Bureau of Gambling Control (DOJ): The state body responsible for licensing and regulating gambling. FanDuel holds no license. File a consumer complaint at oag.ca.gov/gambling.
• Federal Trade Commission (FTC): FanDuel’s deceptive legality maps, misleading state-availability representations, and false advertising directed at California consumers are potential FTC Act violations. File at ftc.gov/complaint.
• Consumer Financial Protection Bureau (CFPB): FanDuel’s collection of money for an illegal service is a potential consumer financial protection issue. File at consumerfinance.gov/complaint.
• California State Legislature: Contact your state senator and assembly member. The Attorney General’s opinion is legally binding guidance. Demand legislation that either clearly criminalizes DFS operations without a license or creates an enforcement mechanism with teeth and restitution requirements.

If You Are In The Class

• If you are a California resident who placed paid bets on FanDuel Fantasy while inside California at any point since 2015, you are potentially a member of the class as defined in Criswell v. FanDuel, Inc. et al., Case No. 3:25-cv-10473, filed in the U.S. District Court for the Northern District of California.
• Contact Plaintiff’s counsel directly. Lead counsel: Margot Cutter, Cutter Law P.C., 401 Watt Avenue, Sacramento, CA 95864, mcutter@cutterlaw.com, 916-290-9400. Additional counsel: Almeida Law Group LLC, Tycko & Zavareei LLP, and Weitz & Luxenberg PC.
• Preserve your records. Your FanDuel account history, transaction records, deposit confirmations, and any promotional emails you received are potential evidence. Download and back up everything now.
• Do not agree to arbitration with FanDuel without legal advice. The complaint argues FanDuel’s arbitration clause and its one-year limitations period are void. Do not waive your rights by accepting any settlement or process FanDuel offers outside the class action.

Mutual Aid and Grassroots Action

• If you or someone you know is struggling with compulsive gambling that was enabled by FanDuel or similar platforms, the California Office of Problem Gambling provides free treatment referrals and support: 1-800-522-4700.
• Share this case widely in California sports fan communities, Reddit, Discord servers, and social media. Most California DFS players have no idea their bets were illegal. The people most harmed are the least likely to know they have legal recourse.
• Support local legal aid organizations that provide consumer protection services to lower-income Californians who lost money to FanDuel but cannot afford private counsel. The class action only works if the people harmed actually join it.
• Demand that your elected representatives hold public hearings on DFS enforcement. The AG issued an opinion. Two senators have written letters. Nothing has stopped the operation. Political pressure is the mechanism that turns legal opinions into enforcement actions.