You can look at daily fantasy sports (DFS) operators as the precursors of today’s sports betting. Just look at FanDuel and DraftKings. They rank 1 and 2 in sports betting revenues and their business began as DFS.
Fast-forward to today. Underdog Fantasy could well be issued a license in North Carolina. And Georgia is moving towards regulating DFS, including the questionable pick’em variations.
But in reality, most of the pick’em games face life with cease and desist letters this past year in Mississippi, Massachusetts and North Carolina.
Underdog Fantasy has notified its customers in North Carolina that its pick’em product has been turned off in the state, after earlier in the week shutting down its Mississippi platform and modifying its Massachusetts platform as more states are viewing some fantasy sports products as gambling.
Just to recap. Georgia sports betting bills may go down for the count. Again. But hope springs eternal for DFS.
And now for the details…such as they are.
Rep. Ron Stephens introduced House Bill 1329 February 21. The bill seeks to come up with regulations for DFS, including pick’em operators considered the bane of many states.
The bill could end up nailed to the sports betting bill, but a committee hearing on DFS may spell out more details, especially on the fate of sports betting, believe it or not.
“This is a bill looking to create parity between sports betting and fantasy,” a source said. “It is meant to be the most inclusive bill possible, except maybe not sweepstakes.”
HB 1329 ties DFS regulation to the Georgia Lottery. Here are the details:
- All winning outcomes reflect the relative knowledge and skill of the participant.
- The participant assembles, owns or manages a fictional entry or roster of actual professional or amateur athletes who participate in real-world sports events.
- A participant competes for prizes awarded by the fantasy contest operator based on terms of conditions published by the fantasy contest operator and made known to the participant in advance of the contest.
- Winning outcomes are determined solely by clearly established scoring criteria based on one or more statistical results of the performance of individual athletes in sporting events including, but not limited to, a fantasy score or single-statistical measure of performance.
- The proposal splits DFS operators into two types: large operators and others. Georgia would tax DFS revenue at 20 percent
Large organizations—more than $5 million in gross receipts over 12 months—pay a $100,000 application fee and $1 million for an annual license. Other organizations pay $5,000 for a license. It isn’t cheap.
The recent announcement in North Carolina comes amid Underdog’s pending application for a sportsbook license with the North Carolina Lottery, where sports betting is due to launch on March 11 eight yet-to-announced sportsbooks.
Earlier in February, the Massachusetts Attorney General’s office cited 10 DFS operators that offer pick’em games in the state, demanding they stop offering pick’em, parlay and similar games considered sports wagering.
Although Underdog wasn’t among the companies that received the letter, it removed player vs. house pick’em competitions from its platform in the state, leaving only the peer-to-peer version for now. Pick’em contents are the company’s most popular product.
“In consultation with the Massachusetts Attorney General’s office, we’ve moved to our peer-to-peer pick’em product in Massachusetts,” said Stacie Stern, Underdog Fantasy’s vice president of government affairs and partnerships.
The company shut down its Mississippi pick ’em contests after the Mississippi Gaming Commission sent a letter to Underdog and several other DFS operators in October, stressing that the state doesn’t allow player vs. house daily fantasy sports competitions, including pick’em. However, similar to North Carolina, the move comes now in light of Mississippi legislators contemplating legalizing online sports betting in the state and DFS operators’ potential to get a sports betting license.
The Massachusetts Attorney General sent cease and desist letters to 10 operators. PrizePicks and Underdog Fantasy were not among them, not yet at least.
“In Massachusetts, we have laws on the books that demand safe and responsible conduct from gaming operators, and when those laws are ignored, my office will not hesitate to enforce them as a matter of public health and consumer protection. I want to thank the MGC for their partnership in prioritizing these matters,” Massachusetts attorney general Andrea Joy Campbell said in a statement.
Underdog switched from player vs. house —the no-no—to peer-to-peer pick’em games in Massachusetts.
“In consultation with the Massachusetts Attorney General’s office, we’ve moved to our peer-to-peer pick’em product in Massachusetts,” Underdog Fantasy vice president of government affairs and partnerships Stacie Stern said in a statement.
PrizePicks issued a statement with its future plans.
“PrizePicks has reached an agreement with regulators to offer our peer-to-peer Arena game starting March 8th. We appreciate the Massachusetts regulators willingness to work with us to make sure PrizePicks members and fantasy sports fans have no interruptions in their access to our contests,” a company spokesperson said.
Regulators told the operators that pick’em games rank as a parlay wager, which is “expressly included in the definition of sports wagering.”
“I don’t intend to put the executives at PrizePicks in jail. We would like to explore civil enforcement in this area to see if it can be effective,” Massachusetts first assistant AG Pat Moore told the state gaming commission.
The MGC agrees with the approach.
“To ensure a safe, legal and regulated sports wagering market, every operator in Massachusetts must play by the same rules. The Attorney General is a critical partner in these efforts as the MGC implements its regulations and takes action to disrupt and eradicate illegal sports wagering in the Commonwealth. We thank Attorney General Campbell for her leadership and partnership,” MGC chair Cathy Judd-Stein said in a statement.
Multiple pick’em companies recently agreed to exit major markets like New York and Florida.
