On August 14, Judge Charles Breyer set what plaintiffs' lawyers call a "non-movable" December 21, 2026 trial in Zhen v. DraftKings. The trial is about whether DraftKings can keep running paid DFS in California. The players' bid to get their losses back is already gone. What's left is a fight over an injunction and fraud claims. Nothing has changed in your DraftKings app yet, but California fantasy players now have a date to circle. Outside California, this case changes nothing directly.
What Happened on August 14
The case is Zhicheng Zhen et al. v. DraftKings Inc., Case No. 3:25-cv-04618-CRB, in the U.S. District Court for the Northern District of California. On August 14, 2026, the court set a merits trial for December 21, 2026. According to the plaintiffs' law firm, the trial will decide whether DraftKings is barred from continuing its daily fantasy sports operations in California.
Plaintiffs' counsel describes the date as firm and "non-movable." That's their wording, not the court's order, but either way the timeline is short. Federal civil cases often take years to reach trial. This one will get there about four months after the date was set.
The plaintiffs are two California DFS players, Zhicheng Zhen and Jonathan Smith. They sued in June 2025. U.S. District Judge Charles Breyer is presiding.
Before we get to what the trial means for you, it helps to know how a California fantasy lawsuit got this far. It starts with the state's top lawyer.
How We Got Here: The 2025 Attorney General Opinion
On July 3, 2025, California Attorney General Rob Bonta released a formal legal opinion, numbered 23-1001, at the request of Assemblymember Tom Lackey. Its conclusion was blunt:
- "California law prohibits the operation of daily fantasy sports games with players physically located within California, regardless of where the operators and associated technology are located."
- "Such games constitute wagering on sports in violation of Penal Code section 337a."
- The opinion said that "daily fantasy sports games, including both pick'em and draft style games, are prohibited by section 337a because they involve betting on sporting events."
Two details matter here. First, the opinion covered both formats: classic salary-cap "draft style" contests and pick'em. It wasn't aimed at one product type. Second, it turned on where the player is physically located. An operator based out of state, running servers out of state, is still covered if the player is in California.
The reaction was split. According to Covers, Governor Gavin Newsom's office said the governor disagreed with the opinion. The industry's coalition also pushed back, saying "AG Bonta got it wrong." Attorney general opinions are also only advisory. They aren't binding law, and that's why a courtroom matters so much.
Bonta didn't treat it as a purely academic exercise. On July 23, 2025, he said: "The next step is our enforcement, and laws are meant to be enforced." Asked whether that meant going after operators, he answered: "Absolutely." He didn't give a timeline.
How the operators responded
Operators didn't all react the same way. In July 2025, Underdog replaced its Pick'em product in California with a peer-to-peer format called Champions. In August 2025, PrizePicks moved to a peer-to-peer-only model nationwide. DraftKings kept running its DFS contests in California. Plaintiffs' counsel said as recently as August 14 that "DraftKings continues to operate in California, despite the Attorney General's 2025 opinion concluding that daily fantasy sports violate California's Penal Code."
That gap between the AG's opinion and what was actually offered in the app is what the lawsuit targets.
The Lawsuit: From Dismissal to Trial
Zhen and Smith originally sued under two California consumer-protection laws: the Unfair Competition Law (UCL) and the Consumers Legal Remedies Act (CLRA). The core theory was simple. DraftKings told Californians its contests were legal, the state's attorney general says they aren't, and players relied on those representations.
Their amended complaint added more: RICO claims under the federal racketeering statute, plus a request for declaratory relief, which is a court declaration about what the law is.
In December 2025, Breyer dismissed the case with leave to amend. That means the plaintiffs could fix the complaint and try again. His concern, as reported by Courthouse News, was that the plaintiffs were seeking equitable relief without showing that money damages alone would be inadequate. He contrasted their request for money with an injunction, a form of relief that doesn't involve money.
The plaintiffs came back. This summer the case moved fast.
The July 23 Hearing: "Why Advertise It?"
At a July 23, 2026 hearing, Breyer signaled the case was likely to move forward, and he pressed DraftKings on its marketing.
DraftKings attorney Richard Patch argued the players weren't harmed in the way the law requires. "They got a game that they wanted to participate in, and it went by the exact rules that were represented; it did work, they either lost or they won and they took the money," Patch said.
Breyer wasn't persuaded on whether the legality claims mattered to players. "The fact is your client spent a lot of money telling people in California that it's legal, when in fact the attorney general has said the opposite … It's hard to believe it's not material; if it's not material, why advertise it?" he said, adding: "Some people do care about not engaging in conduct that is illegal."
According to a hearing transcript excerpt published by plaintiffs' counsel, Breyer also laid out what an injunction could look like. It could prohibit "two things: One, on the lesser note, prohibiting misrepresentations. But, two, prohibiting the game itself. Because if the game is unlawful, the injunction would say you can't play the game in California."
That's the line every California DFS player should read twice.
The July 29 Ruling: What Survived and What Didn't
Six days after the hearing, Breyer issued a written order that cut the case down considerably. It also kept alive the claims that matter most to whether contests keep running.
| Claim | Result (July 29, 2026) |
|---|---|
| Recovering players' losses (damages or restitution) | Dismissed |
| Declaratory judgment | Dismissed |
| RICO claims against subsidiary Crown Gaming and company officers | Dismissed |
| Public injunctive relief under the UCL and CLRA | Survives |
| Fraud claims | Survives |
The loss-recovery piece is the headline for anyone hoping for a check. Breyer wrote: "The public policy against gambling loss recovery bars plaintiffs' claims to the extent they seek recovery of their losses in any form, whether it is damages or restitution." For the RICO claims against Crown Gaming and the officers, he found that "amendment would be futile."
The surviving claims are forward-looking. Breyer noted that the plaintiffs "may be tricked into engaging in future online gambling if DraftKings continues to represent that its games are legal." That's the legal hook for an injunction. The case is about stopping something going forward, not paying people back for the past.
What the December 21 Trial Will Decide
The trial is about what happens next in California. From the hearing and the July 29 order, three broad outcomes are possible:
- DraftKings wins. No injunction, and paid DFS continues in California as it does today.
- A narrow injunction. DraftKings is barred from telling Californians its contests are legal, but the contests themselves aren't shut down. This is the "lesser" option Breyer described.
- A broad injunction. The court finds the game unlawful and bars DraftKings from offering it in California. That's the outcome Breyer put into words at the July 23 hearing.
We won't predict the result. Trial outcomes depend on evidence and arguments we haven't seen. What we can say is that the judge has openly described both kinds of injunction as on the table, and the claims that could produce one are the ones that survived.
A trial ruling also isn't always the last word. Whatever happens in December, read the first headlines carefully. Check whether a ruling takes effect right away or whether there's a delay.
What It Means If You Play DFS in California
Right now, nothing has changed in the app. As of August 14, DraftKings was still operating in California, according to plaintiffs' counsel. The trial is four months away.
That said, a few practical steps make sense if you're a California player:
- Don't park a big balance. This is just good bankroll hygiene. Keep what you plan to play in your account, and keep the rest in your own bank. If access to contests ever changes, you want as little as possible tied up in a pending withdrawal.
- Read your emails from the platform. If anything changes for California users, the operator's notices and updated terms will tell you before any blog will.
- Don't assume other apps are in the clear. The AG's opinion covered daily fantasy in general, "both pick'em and draft style." This lawsuit names DraftKings, but the legal question isn't about one brand.
- Don't chase losses expecting the lawsuit to make you whole. Loss recovery has already been ruled out.
What It Means If You Play Outside California
The case is about California law and conduct in California. A ruling in December would not, on its own, change whether paid DFS is offered in your state. Contests in states with their own fantasy sports laws run under those laws.
It still matters, for two reasons.
First, California is a huge market. Any outcome that limits paid DFS there would affect how the biggest operators think about the product.
Second, it's a test of the AG's theory. Bonta's opinion has been on the books for over a year, but it's advisory. A federal trial on whether DraftKings' California contests are lawful is the closest thing yet to a court ruling on that question. Other states and operators will be paying attention.
FanDuel is not a party to this lawsuit. It's worth saying clearly because "DFS on trial" headlines tend to blur that line. The case is against DraftKings, and the trial outcome binds DraftKings.
Key Dates at a Glance
- June 2025: Zhen and Smith file suit in federal court in San Francisco.
- July 3, 2025: AG opinion 23-1001 concludes DFS in California violates Penal Code section 337a.
- July 23, 2025: Bonta says enforcement is "the next step."
- December 2025: Breyer dismisses the case with leave to amend.
- July 23, 2026: Hearing. Breyer questions DraftKings' legality marketing and describes possible injunctions.
- July 29, 2026: Order dismisses loss-recovery, declaratory and RICO claims; public injunctive relief and fraud claims survive.
- August 14, 2026: Court sets the merits trial.
- December 21, 2026: Trial on whether DraftKings can continue paid DFS in California.
How We'd Play It Until December
If you're outside California and in a state where paid DFS is available, this case doesn't change your strategy. Keep playing the contests that fit your bankroll, and treat any "DFS is illegal" headline with care. Read which state it's about before reacting.
If you're in California, keep playing small and stay informed. The worst position is a large balance, no plan, and a sudden change in what the app lets you do. NFL season is about to start, and that's exactly when people deposit the most. Be deliberate about it.
Either way, the best defense against legal uncertainty is the same as the best defense against variance: don't put more in play than you can afford to have stuck or lose. Our 1% bankroll rule is a good place to start.
The Bottom Line
The December 21 trial is the first real courtroom test of California's position that daily fantasy is illegal sports wagering. Money-back claims are out. What's left is whether DraftKings can keep telling Californians its games are legal and, more importantly, whether it can keep offering them at all. Judge Breyer has said out loud that an injunction barring the game itself is possible.
Until then, nothing changes in the app. California players should keep balances lean and watch for notices. Everyone else should keep playing where paid DFS is available and keep an eye on December. For more on where each platform operates, see our DraftKings review and FanDuel review.