There seems to be some hand-wringing over just what to do with the wayward cousin of sports betting: fantasy sports.
Take Colorado.
The state’s Division of Gaming is involved in developing regulations for fantasy sports. But a representative from PrizePicks has objected to the state’s approach. The division evolved from one of the “most progressive to one of the most restrictive regimes” within the last year, the company’s Vice President of Legal and Government Affairs Josh Kirschner told the agency during a hearing on October 30.
Colorado is the latest state where fantasy operators seek to have specified pick’em contests included in rules across the country. In the last month, regulators in Michigan and New York have canceled some pick’em contests for resembling sports betting, according to Sports Handle.
Indeed, the proposed changes seem to indicate Colorado will prohibit all fantasy pick’em contests, both single and multi-player. The sticking point— the perception that customers are not playing against other players but against the house. The latest draft prohibits fantasy versus the house.
In Michigan and New York, regulators barred single player pick’em contests, but it appears Colorado wants to ban them all.
The latest changes in Colorado favor major sports betting operators like DraftKings and FanDuel—each started out as daily fantasy companies and still operate fantasy contests across the U.S. But for companies such as PrizePicks or Underdog, changes could cut into what they consider a growing sector of fantasy sports.
Kirschner also asserted the division shift seems at odds with the current law, which requires the state to develop specific rules for fantasy. To Kirschner, the division is trying to apply rules from sports betting to fantasy instead of independent regulations for fantasy.
Another concern? Under current proposed rules, fantasy contests require “adding together the fantasy points from two or more players or positions” rather than standard definition, based on an “accumulation” of points.
FanDuel’s Director of Regulatory Affairs Andrew Winchell thanked the regulators for the more specific changes in fantasy versus the house but worried the wording left the door open too much over what is and is not allowed.
“Is this interpreted to mean that all single-player fantasy contests against the operator are prohibited? Or only a specific subdivision of contests or specific types of contests that are played against the fantasy contest provider are being prohibited,” Winchell asked, per SBCAmericas.
Kirschner agreed with Winchell but also criticized FanDuel for its push in Wyoming against PrizePicks and Underdog Fantasy.
“As we’ve recently learned in an LSR article on Wyoming, FanDuel might not necessarily concern itself with what the rules are, since they seem to get their way no matter what,” he said.
Kirschner questioned the legality of the division approach compared to the 2016 fantasy laws. The act defines a “fantasy contest” as a game or contest in which:
- The value of all prizes offered to winning participants is made known to the participants in advance of the contest;
- Winning outcomes reflect the relative knowledge and skill of the participants;
- Are determined predominantly by accumulated statistical results of the performance of athletes in fully completed sporting events;
- And are not based on randomized or historical events or on the score, point spread, or any performance of any single actual sports team or combination of such teams or solely on any single performance of an individual athlete in any single actual sporting event.
Kirschner also asked what might happen to operators who find their businesses affected by these new regulations.
“The question becomes for a current licensee offering games that were previously in line and licensed by the division, but might not fit into these new rules, what procedural due process will be afforded to those folks?,” he said, per SBC. “What will they be allowed to offer contests until their current license expired?”
The gaming commission is set to meet next on November 16.
