When a popular daily fantasy sports site decided to stop offering paid games in New York, the intention was to still operate in the Empire State.
Settling is a good start at obtaining a future license.
PrizePicks paid $15 million to the New York Gaming Commission after regulators said the DFS site was operating illegally, according to a report from ESPN.
"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," a spokesperson told ESPN in a statement. "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, ensure strong consumer safeguards, and generates tax revenue for the state."
'Good-faith belief'
The DFS operator announced Monday that it is ending buy-in contests on Thursday.
According to the legal document obtained by ESPN, PrizePicks agreed to end paid games as the other stipulation to the settlement.
The document also states that PrizePicks violated New York law for several years with its pick ’em-style game. PrizePicks argued that it operated in a “good-faith belief” that it could do so in New York.
The gaming commission disagreed, saying that PrizePicks “has not been, and is not, authorized to offer (interactive fantasy sports)” in the Empire State.
The $15 million payment is based on revenue that PrizePicks generated from June 4, 2019, through Dec. 19, 2023.
A gaming commission spokesperson told ESPN that the settlement “speaks for itself.”
Cracking down
PrizePicks isn’t barred, according to the settlement, from seeking an operating license in New York, which clarified its DFS laws last October.
Michigan and Florida regulators have cracked down on what they see as fantasy operators mimicking sportsbooks by offering prop bets and paid games. Other states are looking more intently into the legality of DFS operations.
“We are in the process of applying for a permanent license to operate in New York under the state’s new rule,” PrizePicks said in a letter to customers on Monday. “We look forward to resuming paid contests in New York as soon as possible, including introducing new fantasy games with larger prizes and more exciting ways to play and win.”
Peer-to-peer game in N.Y.?
PrizePicks, which operates in 30 U.S. states, is hoping to switch to its peer-to-peer game that launched in West Virginia, Tennessee, Alabama, and Wyoming in January.
PrizePicks Arena allows players to compete against each other, not “the house,” in a picks contest that matches users to each other based on several criteria, including buy-in fee and experience level.
PrizePicks plans to roll this game out in New York, pending gaming commission approval.
“We're focused on expanding PrizePicks' reach by creating new, innovative game types that push the PrizePicks brand and truly put sports fans at the center of gameplay,” Brian Huss, PrizePicks vice president of innovation, said last month. “PrizePicks Arena is an exciting new twist on the PrizePicks experience that paves the way for future product innovations."
