After Being Fined, PrizePicks Seeks State Approval for New Fantasy Contest

After Being Fined, PrizePicks Seeks State Approval for New Fantasy Contest
Fact Checked by Pat McLoone

Daily fantasy operator PrizePicks told EmpireStakes.com that it is working with the New York State Gaming Commission (NYSGC) to get a new version of its pick’ em-style contest approved in the state. That comes a day after the Georgia-based company agreed to pay nearly $15 million after the state regulator found it operated illegally in the state for almost five years.

The NYSGC keeps an eye on New York sports betting and in-state casinos as well. There are no legal New York online casinos.

According to the settlement agreement, the commission said PrizePicks violated rules requiring fantasy sports operators that started offering contests in the state after Nov. 10, 2015, to register with and have contests reviewed and approved by the state body.

The agreement calls on PrizePicks to “cease and desist” from operating its single-player contest and provide the NYSGC with evidence of abiding by it.

The settlement amount was determined after figuring out the revenue PrizePicks generated in New York between June 4, 2019, and Nov. 3, 2023, an estimate of what it made for the rest of 2023, and the length of time PrizePicks operated in the state.

Free Game Debuts in New York Thursday

PrizePicks plans to switch to its free-to-play game in New York on Thursday, a spokesperson told EmpireStakes.com.. At the same time, it is seeking a New York license for its new game, PrizePicks Arena. The contest is still pick ‘em-based. However, instead of it being a single-player game, contestants are pooled. They still can earn a payout if their picks are all correct, but they also will receive points for the performance of their selections.

According to the rules, the contestant with the most points within the pool of entries can win up to 10 times their entry fee, and if there’s a tie, that prize is split among all entries with the same amount of points. If a contestant qualifies for both prizes, they will receive the higher of the two payouts.

The peer-to-peer real-money game launched in Alabama, Tennessee, West Virginia and Wyoming late last month.

“Our team is pleased to have reached a resolution with the Gaming Commission, and we look forward to continuing our work with the State to modernize New York’s daily fantasy sports laws,” the spokesperson said. “As safer, skill-based DFS contests like ours rise in popularity, we will work constructively with policymakers on thoughtful legislation that allows New Yorkers to play the contests they love, ensures strong consumer safeguards, and generates tax revenue for the state.”

New York Changes Fantasy Rules

Last October, the NYSGC voted to amend its fantasy sports rules. The changes included a ban on so-called proposition betting contests, where contestants select athletes for their entry and determine if those athletes will or won’t hit a certain statistical threshold in a game or event. Critics of the fantasy pick ’em games say those contests are no different from sportsbooks offering player prop parlays, except that fantasy operators offering those games do not pay the same taxes and fees as licensed sports betting operators.

But even the new rule could be open to interpretation. 

The rule, in part, states: “Contests in which a contestant chooses whether an individual athlete or a single team will surpass an identified statistical achievement would be prohibited.” However, pick ’em contests offered by fantasy providers require contestants to select multiple athletes for their entry, not just one athlete or team.

There are fantasy operators licensed in New York with pick ’em contests among their options. That includes Brooklyn-based Underdog Sports, which also offers fantasy draft contests.

A spokesperson for Underdog told EmpireStakes.com that the company, like all other approved fantasy operators in New York, has a temporary license. Underdog communicates regularly with the NYSGC and plans to seek a permanent license when that becomes available.

Follow NYCasinos.com for any developments and for information for the future on New York casino bonuses.

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Author

Steve is an accomplished, award-winning reporter with more than 20 years of experience covering gaming, sports, politics and business. He has written for the Associated Press, Reuters, The Louisville Courier Journal, The Center Square and numerous other publications. Based in Louisville, Ky., Steve has covered the expansion of sports betting in the U.S. and other gaming matters.