The California attorney general said last week that daily fantasy sports are considered illegal sports betting under state law. But rather than ending the debate, the ruling may spark a broader conversation among Native American tribes, sportsbook operators, and regulators about how to handle the issue moving forward.

The declaration from California AG Rob Bonta was made via a 33-page advisory opinion that had been expected for some time. In fact, Underdog Sports sued to try to stop Bonta from issuing the opinion, arguing the mere issuance of it represented an “imminent, existential threat” to its business—but on Wednesday the company was rejected in that attempt.  

On Thursday, the AG issued his opinion, which is clear that daily fantasy sports contests—including pick’em and draft-style games—are prohibited under the California penal code (sports betting in general is banned in California, which is one of 11 states in which the practice is still completely illegal). Bonta rejected the argument that daily fantasy sports should be viewed as distinct from traditional sports betting because they are games of skill, not chance, saying the California Supreme Court has found that “betting or wagering ‘may involve skill or judgment.’”

“The essential requirement of a ‘bet’ or ‘wager’ is that participants win or lose based on the outcome of an uncertain future event, such as a sports competition, even if skilled bettors consistently come out ahead,” the opinion says.

Notably, in the court ruling that rejected Underdog’s request for an immediate ruling prohibiting Bonta from issuing the opinion, the judge wrote “the opinions of the California Attorney General are advisory only and do not carry the weight of law.”

Attorney Dan Wallach, a U.S. gaming law expert, tells Front Office Sports that while Bonta’s advisory opinion “does not have the force of law,” it “should give pause to operators moving forward.”

“They are now on notice that the California AG has taken the view that these contests are illegal and there is a potential for enforcement action,” Wallach says.

Individual bettors would not be at risk if enforcement actions are taken. The defendants would be the sportsbook operators offering daily fantasy sports contests, Wallach tells FOS. Still, users will be affected if Bonta’s opinion results in enforcement actions that cause operators to stop offering daily fantasy sports contests, because they would no longer have a legal outlet to play the games.

The California Department of Justice would not tip its hand on whether it might seek to bring enforcement actions if companies don’t cease their daily fantasy sports offerings, telling FOS last week that it “expects companies to come into compliance with the law,” but “any specific action beyond that is premature.”

Despite the potential for future enforcement actions if they continue offering daily fantasy sports contests, at least two operators are staying steadfast. Underdog and DraftKings have both made clear in statements to FOS that they intend to continue offering daily fantasy sports games for now. DraftKings offers daily fantasy sports in most states, with few exceptions including Nevada, Montana, and Washington; the same goes for Underdog, which offers daily fantasy sports in more than 40 states, with exceptions including New York, Connecticut, and Hawai‘i. 

A spokesperson for Underdog on Monday confirmed it has no immediate plans to stop offering daily fantasy sports contests. A spokesperson for DraftKings told FOS last week that the company “respectfully disagrees” with Bonta’s interpretation and said “we intend to continue offering them—as we have done without challenge or issue for over 13 years.”  

DraftKings also said the company plans to “work with stakeholders, including the Office of the Attorney General, to try to find an amicable resolution.” That mirrors what a spokesperson for FanDuel told FOS last week: “We look forward to meeting with the Attorney General’s office to talk through our next steps.”

It’s also in line with what California Gov. Gavin Newsom thinks—a spokesperson for the governor says he “does not agree with the outcome” of Bonta’s opinion and that he “welcomes a constructive path forward in collaboration with all stakeholders.”

Wallach expects the various stakeholders—sportsbook operators, policymakers, and Native American tribes—to use this as an opportunity to open up discussion and attempt to find some middle ground.

“The perception is that tribes were influential in having the AG move forward with this legal opinion, so it makes sense to engage in dialogue about what they may or may not be comfortable with,” he says. “The red line may be against-the-house contests, anything that looks like a sportsbook.

The larger discussion to be had on the issue could be contentious. James Siva, chairman of the California Nations Indian Gaming Association (CNIGA) said in a statement that the group “commends Attorney General Rob Bonta for standing up for the rule of law in California,” but he noted “it is also very clear that California has long turned a blind eye to illegal gambling—at the direct expense of tribal governments.” 

“Untold millions if not billions have been illegally wagered over the past decade,” Siva said. “Where is the enforcement? Where is the accountability? It is now imperative that the state back up this legal opinion with strong enforcement and that lawbreakers be held to account.”

Well-heeled surfers in New York searching for consistent waves may soon need to look no further than Crest Surf Clubs, which touts itself as the first and only private member surf club in the U.S.

Crest is seeking about $45 million to help support the build-out of its first location on a 3.5-acre site in Shirley, Long Island, founder and CEO Brett Portera told Front Office Sports. If Crest secures funding by the end of the summer, Portera anticipates the New York club will be operational by spring.

The capital raising, which may take the form of convertible debt, comes as Crest collects average initiation fees of about $100,000 from its 500 founding New York members, more than half of which have been sold, says Portera, who began surfing at the age of 8. Wedbush Securities is advising Crest Surf Clubs on the capital raising effort, and proceeds may be used to fund future projects, Portera says. Membership fees will be $20,000 a year, on average.

“Our broader vision is to scale Crest,” he says, adding that the company aims to build out as many as 20 stand-alone private clubs in the U.S., including some that are a part of residential communities. Crest has identified potential sites in Florida, North and South Carolina, Arizona, California, and Texas, and is in discussions with potential development partners for sites in Central America and the Caribbean, Portera says.

Crest members will have access to a luxury clubhouse that includes dining, gym and spa services, coworking space, and importantly, artificial waves in controlled water temperature—meaning they can surf year-round. In New York, up to 20 surfers can be in the water in a single session, where about 120 full-size waves as high as 6.5 feet will be generated per hour.

The company’s proprietary wave technology was developed by CTO Alex Poirot, a former engineer at Kelly Slater Wave Co., which pioneered the technology used to make waves at the largely invite-only KSWC Surf Ranch in Lemoore, Calif., which is owned by the World Surf League. The same tech is used at Surf Abu Dhabi, where advanced open surf sessions cost around $950 per person.

Surfers have shown they’re increasingly willing to pay for access to man-made waves both in the U.S. and abroad. The Palm Springs Surf Club in California, which is open to the public, offers hour-long sessions for $200, while in Brazil, family memberships to two new clubs featuring wave pools start at roughly $125,000 and $184,000, respectively, according to Bloomberg. 

Residential projects helmed by wave pools have gained traction, with Drew Brees and Tony Hawk among those with ties to Austin Surf Club, a Discovery Land Co. development set to include some 140 condominiums. Similarly, Cabo Real Surf Club in Mexico, promises 240 waves per hour and is developing homes that start at $2.5 million. 

Major League Baseball is putting Guardians pitcher Luis Ortiz on paid leave amid a league investigation that is reportedly related to gambling infractions.

Ortiz, a 26-year-old righthander, was scheduled to start Thursday night against the Cubs in Chicago, until MLB issued a statement saying he has been “placed on non-disciplinary paid leave through the end of the All-Star break due to an MLB investigation.” Joey Cantillo is reportedly being promoted from Triple-A Columbus to start instead.

“We will not comment further until the investigation has been completed,” the statement said.

Cleveland also issued a statement saying the team has been “notified” by MLB” about the leave, “per an agreement with the Players Association due to an ongoing investigation.”

“The Guardians are not permitted to comment further at this time and will respect the league’s confidential investigative process,” the team said.

The MLB Players Association did not immediately respond to a request for comment. While the statements did not specify what the probe is about, multiple reports say it is related to “gambling.”

ESPN reported the investigation relates to two individual pitches thrown by Ortiz, one during a game on June 15 and another on June 27. The first, per ESPN, is when Ortiz opened the second inning with a slider “well outside the strike zone,” and the second when he opened the third inning with a slider “ever farther outside the strike zone.”

IC360—which monitors potentially illicit gambling activity—flagged the pitches for sportsbook operators in Ohio, New York, and New Jersey, ESPN said. Some sportsbooks offer so-called microbets on events like the outcome of the first pitch of an inning. According to ESPN, there was unusual betting activity on those two pitches.

IC360 did not immediately respond to a request for comment.

Issues related to players being involved in sports betting has become a growing trend of late.

NBA free agent Malik Beasley, 28, is reportedly under federal investigation over betting allegations related to wagers made on games during the 2023–24 season, when he was with the Bucks, and “prop” bets—which are bets not tied to the outcome of a game, but instead something else, such as how many three-pointers a player will hit in a given game. Beasley was the third NBA player to face gambling-related accusations in under two years, with the other two being Terry Rozier and Jontay Porter. Beasley and Rozier have not been charged with any crime or penalized by the league at this point, while Porter was banned from the NBA for life last April.

MLB has also had its issues with sports betting. Last June, the league announced that an internal investigation resulted in then-Padres infielder Tucupita Marcano being banned for life, while then–Oakland Athletics pitcher Michael Kelly and three minor leaguers received one-year bans.

In 2023, five NFL players were suspended for violating the league’s gambling policy. Before that, Falcons wide receiver Calvin Ridley was suspended for the entire 2022 season after being caught betting on games.

In October 2023, the NHL suspended Senators player Shane Pinto for about half the season due to violations of the league’s sports betting rules. 

It’s not only the players getting into trouble. Last year Ippei Mizuhara, the former interpreter of Dodgers superstar Shohei Ohtani, was found to have stolen more than $16 million from Ohtani to fund his gambling addiction. Mizuhara pleaded guilty to bank and tax fraud last June, and in February was sentenced to 57 months in prison. Also in February, MLB fired umpire Pat Hoberg for sharing betting accounts with a friend who bet actively on the sport. 

All these issues have come after the 2018 U.S. Supreme Court decision striking down the Professional and Amateur Sports Protection Act (PASPA), which had effectively prohibited sports betting outside Nevada and a handful of states with sports lotteries.