Underdog Shifts to Peer-to-Peer Fantasy in California Amid Legal Pressure

This shift is part of a broader movement in the DFS industry.

Ziv Chen

Last Updated: July 18, 2025 11:16 AM EDT • 2 minute read

Underdog Shifts to Peer-to-Peer Fantasy in California Amid Legal Pressure — Pictured: Computers. Photo by DIRK WAEM/Belga/Sipa USA.

Underdog Fantasy has pulled its house-based pick'em games in California, opting instead for peer-to-peer-only fantasy formats. The change took effect Wednesday afternoon, meaning California players can now only access Champions Pick'em options, which are structured as peer-vs-peer contests, and traditional draft-style games. The company's against-the-house pick'em product is no longer available in the state.

This shift is part of a broader movement in the DFS industry. Companies like Underdog and PrizePicks have come under increased scrutiny in several states for offering pick'em-style games that regulators say closely resemble sports betting. To keep operating, some have started pivoting to peer-to-peer models.

That said, California's legal stance remains hazy. A recent opinion from the state Attorney General (AG) briefly touched on both peer-to-peer and house-banked fantasy contests but didn't separate the two in terms of legality. Underdog tried to challenge the AG’s opinion in court, but the claim was rejected.

Underdog's move follows a similar one from PrizePicks, which just two weeks ago pulled its house-based Pick'em games in California in favor of its Arena product, a peer-to-peer platform. Operators have employed similar strategies in complex legal environments, such as Florida, where house-based formats have also been subject to challenges.

Now, only Champions and draft contests appear on Underdog's California site - a sign that the company is proceeding cautiously. At the same time, the legal picture around fantasy sports in the state continues to shift.

California AG Calls DFS Illegal

California AG Rob Bonta recently released a legal opinion that the DFS versions of drafts and Pick'em are illegal because they represent unlawful sports betting. The games, the opinion stated, constitute betting on actual sports outcomes, and under existing laws, they are illegal.

Even though the AG objected, gaming industry insiders such as DraftKings, FanDuel, and Underdog did not acquiesce immediately. FanDuel declared it is willing to negotiate its case with the AG's office. DraftKings reiterated that fantasy games are games of skill rather than games of chance, and are legal under 24 state standards and federal code.

While the AG's opinion is not a law, it's a compelling declaration of what the state will do regarding enforcement in the future. It has far-reaching implications for what will be done with DFS in California.

California Gov. Gavin Newsom, on the other hand, appears not to agree with the AG's assessment. He has criticized Bonta's findings and promoted a culture of mutual collaboration among all stakeholders. This divergence between the executive and the state's supreme legal authority adds another layer of ambiguity to an already murky situation around regulation.

DFS operators are holding firm in California until the state takes clearer legal action or offers a formal path forward.

Written by:
Ziv Chen

Ziv has over two decades of experience in the igaming and sports betting industry, having served in senior marketing and business development positions with both B2C and B2B companies, including Playtech and Microgaming. In 2019, Ziv decided to pursue his passion for writing and became a fulltime industry journalist, covering casino, sports, and gambling business news. He’s specialties include casino games and technology, US state gambling regulation, company performance, as well as gambling affiliates and marketing. As a Pitt graduate, Ziv is a diehard fan of all Pittsburgh sports teams, with the Steelers at the top of the list. In his free time, he enjoys reading crime fiction, biographies (mainly of sports personalities, but not only) and American history. Ziv’s Favorite quote: “We're going to pursue perfection, knowing full well we won't catch it, but we're going to relentlessly chase it," Mike Tomlin, Pittsburgh Steelers Head Coach.