FanDuel Class Action Lawsuit Alleges Fantasy Games Constitute Illegal Sports Gambling

Lawsuit seeks to stop FanDuel from offering fantasy sports contests in California, and recover money for users who were misled into placing illegal sports bets.

A new class action lawsuit alleges that FanDuel has been illegally offering fantasy sports contests in California for years, despite the state’s ban on online sports gambling.

The complaint (PDF) was filed by Martin Beltran in the U.S. District Court for the Northern District of California on July 2, seeking class action status to pursue damages on behalf of all California users of the popular gambling site.

Although platforms like FanDuel and DraftKings are only permitted to operate in states that have legalized online sports gambling, the lawsuit claims FanDuel has been running daily fantasy sports contests in California under the guise of legality. According to the complaint, these contests are not games of skill, as FanDuel suggests, but rather disguised forms of illegal gambling that violate state law and mislead consumers.

The allegations mirror a broader wave of legal action targeting sports betting platforms nationwide. In addition to claims of illegal operations in certain states, companies like FanDuel and DraftKings are also facing a growing number of gambling addiction lawsuits, which accuse them of fueling compulsive gambling through manipulative app designs and aggressive marketing tactics. 

Plaintiffs argue these practices are especially harmful to students and young adults, who are more susceptible to addiction and financial harm.

Beltran’s lawsuit claims that FanDuel, Inc. and Flutter Entertainment, PLC are conducting illegal sports gambling operations in California, and have been since at least 2015, primarily through its “FanDuel Fantasy” games.

These daily games involve participants assembling imaginary teams based on real professional sports rosters, and betting money against their performances.

“FanDuel represents to its customers that “FanDuel Fantasy” is legal in the state. It is not. Put simply, a company violates California Penal Code Section 337a when it engages in pool selling, bookmaking, or accepts or records any bets or wagers on the result of any contest and/or any unknown or contingent event whatsoever – including, without limitation, bets associated with the performance of persons, such as in fantasy sports.”

–Martin Beltran v. FanDuel Inc. et al

Beltran indicates he started using the site several years ago, despite being a resident of Contra Costa County, in California. He claims FanDuel advertises itself as legal in the state, deceiving consumers. According to the California Business Bureau, state residents spend about $200 million on fantasy sports betting every year, despite the ban.

State lawmakers rejected a 2022 proposal to legalize sports betting in California, despite heavy lobbying from companies like FanDuel. However, the lawsuit claims FanDuel has continued promoting daily fantasy sports contests to California consumers, in direct violation of the state’s gambling laws.

The lawsuit seeks compensation for all California residents who placed a bet on FanDuel while a resident of California. It presents claims of violations of California’s Unfair Competition Law, California’s Consumer Legal Remedies Act, and calls for a declaratory judgment on the plaintiffs’ behalf.

FanDuel and DraftKings Gambling Lawsuits

Most lawsuits against sports betting sites like FanDuel and DraftKings have primarily centered on claims that the companies intentionally foster sports betting addiction in consumers by using aggressive marketing tactics, such as misleading “risk free” promotions, and features designed to encourage high-frequency betting.

In states where online gambling is legal, plaintiffs argue that companies like DraftKings have prioritized profits over consumer protection, using real-time data to identify and retain users that have shown signs of compulsive behavior. Rather than offering support or safeguards, these platforms allegedly target inexperienced users with personalized promotions, loyalty perks and psychological triggers that normalize betting while masking its financial consequences.

Amid the growing evidence linking sports betting platforms to rising rates of addiction and financial harm, lawyers are now reviewing sports betting addiction lawsuits for individuals between the ages of 18 and 25, who developed gambling addictions and lost $10,000 or more after using sports betting apps like DraftKings, FanDuel, BetMGM and Caesars. 

These claims focus on college age users who were encouraged to place high-frequency bets, even after showing signs of addiction. Some continued to receive personalized incentives and marketing offers after requesting account closures or appearing on self-exclusion lists, raising serious concerns about how platforms exploit vulnerable behavior.

If you or someone you love suffered financial harm from compulsive gambling on these apps, contact a sports betting lawyer to see if you are eligible to recover losses and hold companies accountable for their addictive design and predatory targeting practices.