It's totally fake. There is an awkward cut where they tried to make it all one shot. (After he casts and then the camera turns to the dock while the one guy screems "over there!") They had to make it look like the shark was taking the bait somehow. Unfortunately it was poorly edited.
Also, the acting of the surfer isn't very great if you ask me. I think I would be a tad more physiqued then he was.
Either way though it was freakin' awesome! I want to do that on my lake up here. It would be so funny!