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A federal judge has indicated that a class-action lawsuit challenging DraftKings’ paid daily fantasy sports contests in California will move forward, a development that could keep pressure on one of the state’s biggest unresolved gambling questions.
According to reporting cited by Iredell Free News, U.S. District Judge Charles Breyer said he is likely to deny DraftKings’ motion to dismiss the case. The lawsuit, filed in June 2025 by plaintiffs Zhicheng Zhen and Jonathan Smith, alleges the company runs illegal gambling operations in California through paid DFS contests.
Breyer previously dismissed the complaint in December 2025 but allowed the plaintiffs to amend it. The revised filing added Racketeer Influenced and Corrupt Organization Act claims and a request for declaratory relief, alongside earlier claims under California’s Unfair Competition Law and Consumer Legal Remedies Act.
At a July 23, 2026 hearing, Breyer reportedly said “the plaintiffs are right to sue” and that the paid daily fantasy sports contests are “likely prohibited by state law.” He also said the plaintiffs appear to have suffered economic harm because they paid money for contests DraftKings described as legal.
DraftKings argued the case should be dismissed because customers received the contests they paid for. Attorney Richard Patch said the company had “operated DFS contests openly, honestly, and permissibly in California for over 14 years.” As of the source article’s publication, DraftKings’ paid DFS contests were still active in California.
The dispute lands in a murky California market. The source article noted that California permits tribal casinos, the state lottery, horse racing, and participation in daily fantasy sports, while the legality of paid DFS remains unsettled. It also pointed to a July 2025 opinion from California Attorney General Rob Bonta concluding that daily fantasy sports contests are illegal under state law regardless of where the operator is located.
For California players, the immediate takeaway is procedural rather than final: no final ruling had been issued as of the source report, but the case appeared likely to continue instead of being thrown out early. The next key question is whether Breyer formally denies the dismissal bid and whether the lawsuit advances toward discovery and a broader fight over possible injunctive relief against DraftKings’ contests in the state.
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Source: As reported by iredellfreenews.com.
