Underdog Fantasy Accused of Running Illegal Sports Betting App in California

Case Overview: A California class action claims Underdog Fantasy ran illegal sports betting contests under the guise of Daily Fantasy Sports, violating state gambling laws and misleading consumers.

Consumers Affected: California residents who played or lost money on Underdog’s “Pick’em” or “Drafts” fantasy contests.

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

Underdog Fantasy has been running an illegal sports betting platform while promoting itself as a harmless Daily Fantasy Sports (DFS) site, a new lawsuit alleges. The complaint, filed in California, accuses Underdog Sports, LLC of violating state gambling and consumer protection laws by offering unlicensed sports wagers under the guise of fantasy contests.

California law explicitly prohibits sports wagering, and a recent opinion from Attorney General Rob Bonta confirmed that “pick’em” and “draft-style” DFS contests qualify as illegal bets. 

The lawsuit argues that Underdog ignored these rules, misleading players into thinking they were participating in lawful fantasy competitions when they were actually placing bets against the house.

Plaintiff Says He Lost $2,200 Playing “Pick’em” Contests

Monterey County resident Sander Koning filed the lawsuit after seeing Underdog’s ads on social media and television. Believing the games were legitimate, he joined the platform in late 2023 and played for nearly two years, wagering about $2,200 through its “Pick’em” and “Drafts” contests.

Koning says he relied on Underdog’s assurances that the games were legal in California and had no idea he was effectively betting on real-world sports outcomes, a practice the state has long banned. The complaint says Underdog never disclosed the true nature of its games, and that Koning would not have joined had he known they were unlawful.

Contests Allegedly Mirror Traditional Sports Betting Structures

The lawsuit describes Underdog’s games as classic sports betting dressed up as fantasy play. Instead of competing against other players, users bet on how real athletes will perform against benchmarks set by Underdog itself. 

These thresholds act as betting lines, ensuring the company profits regardless of players’ success.

The filing argues that the contests are “materially indistinguishable” from traditional proposition or parlay bets. Players deposit money, make predictions on athlete performance, and win or lose based on outcomes beyond their control. Underdog, the lawsuit claims, retains a guaranteed share of every entry fee while the majority of players lose money.

California’s gambling laws, first enacted in 1909, were designed to curb addiction and financial harm, risks the lawsuit says are revived through mobile fantasy apps. The rapid-fire contests and real-money stakes, it argues, mirror the same social harms that led the state to outlaw sports betting more than a century ago.

Other Fantasy and Casino Apps Face Similar Legal Challenges

Underdog isn’t the only company accused of blurring the line between gaming and gambling. WOW Vegas is facing claims it operates an illegal online casino disguised as a “social casino,” misleading players into wagering real money. 

Another app, Moozi Casino, has been sued for luring users with free virtual coins before pushing them toward real-money play.

Meanwhile, industry giant DraftKings faces accusations of improperly freezing player accounts and keeping customer funds. Even tech titans Apple and Google have been dragged into similar lawsuits for allegedly enabling unregulated gambling apps on their platforms.

In his lawsuit, Koning aims to represent all California residents who lost money on Underdog’s paid fantasy contests. 

The proposed class action seeks restitution and damages for players’ entry fees, an injunction to stop Underdog from running unlicensed betting contests, and broader accountability under California’s consumer protection and gambling laws.

Case Details

• Lawsuit: Koning v. Underdog Sports, LLC D/B/A Underdog Fantasy,
• Case Number: 3:25-cv-07211-CRB
• Court: U.S. District Court for the Northern District Of California

Plaintiffs' Attorneys

• Scott Edelsberg (Edelsberg Law, P.A.)
• Edwin Elliot (Shamis & Gentile, P.A.)

Have you played Underdog Fantasy’s “Pick’em” games? Do you think they qualify as gambling? Share your opinion in the comments below.