Empire State regulators are taking a stand against fantasy contests that look a little too much like legal sports betting.
The New York State Gaming Commission met Tuesday and approved new rules for paid fantasy sports that target pick ‘em contests resembling prop betting.
Those pick 'ems have become popular in the U.S., including in states that lack sports betting sites. Regulators, though, are cracking down on that form of DFS, and New York is now the latest to formally do the same.
“Contests shall not be based on proposition betting or contests that have the effect of mimicking proposition betting,” the new rules state. “Contests in which a contestant must choose, directly or indirectly, whether an individual athlete or a single team will surpass an identified statistical achievement, such as points scored, are prohibited.”
Getting picked on?
The new rules from the New York sports betting regulator could encourage other states to follow suit and increase the pressure on pick 'em operators. Regulators in states such as Florida and Ohio have recently taken action of their own against certain fantasy operators for those offerings, arguing they constitute illegal wagering.
But pick ‘em proponents claim they are operating legally and that they are being singled out by the big boys in the industry. Those operators are pushing back against the pushback, even as state regulators try to make it clear they are not welcome.
The Coalition for Fantasy Sports (CFS), which is made up of PrizePicks, Sleeper, and Underdog, opposed New York’s proposed rule targeting prop-like contests, arguing that pick ‘ems are not gambling because they meet the definition for games of skill.
Those contests typically involve players playing picking two or more outcomes, such as players in a game going over or under their point totals, and receiving a payout if they are correct.
“CFS stated that ‘a variety of contest styles encourages innovation,’” a memo to the commission added. “CFS stated that the proposed regulations ‘would serve to solidify the IFS market domination by DraftKings and FanDuel.’”
The New York State Gaming Commission is set to meet this afternoon to consider proposed rules prohibiting fantasy contests "that have the effect of mimicking proposition betting."
— Geoff Zochodne (@GeoffZochodne) October 3, 2023
Also on the agenda is discussion of Fanatics' purchase of PointsBet's U.S. business, among other… pic.twitter.com/50Mwj1arH3
The New York commissioners decided to approve the policy anyway. Other rules adopted on Tuesday require DFS operators to get their contest types approved by regulators and to identify “any highly experienced player” who enters a contest by attaching a symbol to their username.
Commissioners tackled more than just daily fantasy regulations on Tuesday, such as granting their approval to the acquisition of PointsBet’s U.S. assets by Fanatics. Still, further tweaks to the state’s fantasy rules are possible.
“I do want to note that the commission continues to receive some comments and concerns regarding interactive fantasy sports well outside the public comment period,” Executive Director Robert Williams told commissioners. “And we're going to continue to review those and should we determine any of them are appropriate we'll advance additional amendments in the future.”
