DraftKings California Lawsuit: Is Betting Illegal in the Golden State?

Case Overview: A class action lawsuit alleges DraftKings operates an illegal gambling operation in California through Daily Fantasy Sports and Pick6, claiming the company misled users about the legality of its contests.

Consumers Affected: California residents who placed a bet or wager on DraftKings while in California.

Court: U.S. District Court for the Northern District of California

DraftKings is facing new legal trouble in California, where a new class action lawsuit accuses the online betting giant of running an illegal gambling operation under the guise of Daily Fantasy Sports and a newer feature called Pick6. 

According to the lawsuit, the company has knowingly misled users by claiming its contests are legal in the state, even though California law broadly prohibits commercial gambling.

The plaintiffs say they were lured in by those assurances, spending thousands of dollars on bets they never would have placed had they known the contests weren’t above board. The complaint alleges DraftKings acted with malice and fraud, continuing to advertise and operate in California despite knowing its games likely ran afoul of state laws.

Californians Say They Were Deceived into Unlawful Wagering

Three California residents—Brandon Moore of San Francisco, ZhiCheng Zhen of Oakland, and Jonathan Smith of Napa County—are leading the lawsuit. Each began using DraftKings after seeing advertisements claiming its services were legal in the state. Between them, they say they’ve lost nearly $6,000 on the platform.

The plaintiffs claim they relied on DraftKings’ promises when they signed up and placed bets on games like Daily Fantasy Sports and Pick6. Now, they argue any contracts they agreed to with the company should be considered void, since the core purpose of the agreement—online gambling—was illegal under California law.

"Fantasy Sports" or Just Another Betting Scheme?

The lawsuit dives into how DraftKings’ products operate, arguing they look a lot more like traditional gambling than fantasy sports. Participants pay to bet on how professional athletes will perform in real games. The company pools all the bets, takes a cut, and distributes winnings based on outcomes completely outside the control of players.

Despite California’s laws against so-called “percentage games”, where a company profits by skimming a slice from pooled bets, DraftKings has continued to run these contests, according to the complaint. The company also poured hundreds of millions into advertising, including in California, where plaintiffs say it targeted consumers with misleading messages and even co-branded products that could appeal to minors.

DraftKings Faces Legal Firestorms in Multiple States

This isn’t DraftKings’ only legal headache. The company is also facing lawsuits in multiple states over other alleged deceptive practices. 

In Texas, a man claims the platform deactivated his account and kept his remaining balance. In New York, a 2024 lawsuit alleged a “risk-free” bet promotion was anything but, misleading new users. And in Massachusetts, a class action challenged a $1,000 sign-up bonus as intentionally deceptive—a case backed by a well-known attorney who previously targeted Big Tobacco.

DraftKings has also faced allegations of misleading investors in connection with its NFT offerings. All told, the California lawsuit is just the latest example of mounting legal pressure on one of the industry’s biggest players.

In this lawsuit, the plaintiffs want to represent anyone in California who placed a bet or wager on Draftkings while in California. They are suing for violations of California’s Unfair Competition Law and Consumer Legal Remedies Act and are seeking injunctive relief, damages, fees, costs, and interest.

Case Details

• Lawsuit: Moore, et al. v. DraftKings, Inc., et al.
• Case Number: 3:25-cv-04618 
• Court: U.S. District Court for the Northern District of California 

Plaintiffs' Attorneys

• Wesley M. Griffith, John R. Parker, Jr. and Christopher Nienhaus (Almeida Law Group LLC)

Have you used DraftKings in California? What are your thoughts on its legality? Share your opinion below.