Are Daily Fantasy Sports Pick ‘Em Games Legal From My State?

PrizePicks and Underdog Fantasy have become the market share leaders in the world of Daily Fantasy Sports, mainly a result of offering popular new contests that closely mirror sportsbook player prop bets. 

Sports pick ‘em games have come under scrutiny by, not only some state regulators, but also competitors like FanDuel and DraftKings.

Last week, Underdog Fantasy General Counsel Nicholas G. Green spoke to SBC in regard to their competitors bellyaching.

“The suggestion that the incumbents (e.g., DraftKings and FanDuel) would offer Pick’em fantasy if it were legal is an excuse for being caught flat-footed by innovators like Underdog, who continued to focus on fantasy sports when the incumbents shifted overnight to being sportsbooks. 

“These are not risk-averse companies. Without a competitive fantasy product, they have adopted convenient legal arguments that should not be immediately accepted as good-faith disagreements on the law.”

Green expressed bewilderment as to why the two companies do not offer a pick'em type model.

“I’ll confess to not knowing why DraftKings and FanDuel do not have fantasy contests that are similar to Pick’em fantasy; I do not have any public or non-public information on that issue. Even though they have said publicly that they do not believe the contests fit within the definitions of state law, there is nothing legally binding them from reconsidering their conclusion now.

“What I do know is what is obvious from their public statements, shareholder filings, and activities in the past several years. The incumbents shifted their focus and resources rapidly from fantasy sports to the much greater revenue opportunities in mobile sports wagering. If you believe that the future of your business is sports betting, why bother innovating in fantasy sports?”

The Underdog Fantasy "pick 'em" model is coming under fire in some states.  The DFS site could opt to simply stop offering these contests and focus more on the traditional fantasy model or pull out completely. 

Underdog Fantasy does not operate in Connecticut, Delaware, Hawaii, Idaho, Iowa, Nevada, Louisiana, Montana and Washington based on those states language, or lack thereof, pertaining to the legality of fantasy sports.

Underdog pulled out of Michigan last year after the state created licensing requirements for DFS operators.  That state has proposed a rule that would prohibit “proposition selection or fantasy contests that have the effect of mimicking proposition selection.”

Michigan, we would note, has become especially protective of its online betting sector.  It is one of just a handful of states that has legalized both sports and online casino gambling.

Last week, the Michigan Attorney General announced it had forced a sweepstakes online casino out of the state.

State gaming regulators began investigating Golden Hearts Games in August 2021 and found Golden Hearts’ activity constituted illegal gaming, as they did not hold a license to offer gaming in the state of Michigan.  State regulated online casinos must pay a licensing fee and a specified tax rate.

In 2022, the Department of Attorney General issued a cease-and-desist letter to Golden Hearts advising that it was illegally operating

PrizePicks has opted to stay clear of a much larger number of US states.  These include Arizona, Delaware, Hawaii, Idaho, Indiana, Iowa, Louisiana, Maine, M Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, Pennsylvania, Tennessee, and Washington.

PrizePicks also stopped offering its products in Maryland and West Virginia following regulator concerns.

Wyoming recently filed a cease and desist order, demanding Underdog Fantasy and PrizePicks to stop doing business in Wyoming.

“The Wyoming Gaming Commission became aware that your business offers gambling on sporting events to Wyoming residents,” both letters read, “Specifically, your business purports to offer fantasy sports contests but, in reality, the offering appears to fall under the exact definition of “sports wagering” as defined in Wyo. Stat. Ann. § 9-24-101(a)(xii). This offering may violate Wyoming’s gambling laws found inWyo. Stat. Ann. §§ 6-7-101 through -104, §§ 9-24-101 through -106, and Wyoming Gaming Commission’s Online Sports Wagering Rules, Chapters 1 through -9.”

Prizepicks is now reaching out to its own customers to stand up and fight back.

They just sent out emails in New York urging customers to help stop a “fantasy sports ban”.

- Alejandro Botticelli, Gambling911.com