A lawsuit was filed last week against Underdog Fantasy, PrizePicks, and Yahoo Fantasy Sports, alleging that the companies are operating as Daily Fantasy Sports (DFS) platforms in Massachusetts, while offering and accepting illegal sports bets.
The 33-page suit, filed in the Massachusetts Superior Court, claims that the operators generate more than $10 million per month from prop and pick ‘em bets. The plaintiff, Joseph Curran, explained that while operators such as DraftKings and FanDuel are licensed to offer both DFS and sports betting in the state, the defendants are only licensed to provide the former.
However, Underdog Fantasy dismissed the claims.
“It’s a completely transparent fishing attempt by a plaintiffs lawyer, and it will get dismissed sooner rather than later,” a spokesperson for the company told Front Office Sports. “Just a press release searching for a legal theory, trying to extract a settlement. We continue to offer our product in compliance with Massachusetts law.”
Bettors have three months to join Curran in seeking to reclaim their funds. Any unclaimed funds would go to charity.
A blurry line between DFS and sports betting
The lawsuit against PrizePicks, Underdog Fantasy, and Yahoo Fantasy Sports highlights a persistent gray area: when do DFS contests become illegal sports betting?
Pick'em-style games – where users make predictions about player performances, similar to prop bets – sit at the heart of this debate. Unlike traditional DFS contests, where participants compete against each other, these newer formats often involve playing against the house, blurring the line between fantasy sports and gambling.
At the National Council of Legislators from Gaming States (NCLGS) winter meeting, industry experts and lawmakers discussed the growing challenges posed by evolving DFS formats.
“I personally root for DraftKings, for FanDuel, and for PrizePicks, and obviously Underdog – all of us as competitors – to win over customers and continue to serve them with innovative and fun contests,” said Stacie Stern, SVP of government affairs and partnerships at Underdog Fantasy. “I hope that we can find a way to find that middle ground and come together as an industry and just be a stronger voice for the consumer.”
Reaching a compromise
Earlier this year, the Massachusetts Attorney General’s Office sent cease-and-desist letters to 10 DFS operators offering pick ‘em style games in the state. Among these were Yahoo Fantasy Sports, StatHero, and Parlay Play. However, PrizePicks and Underdog Fantasy avoided formal action by voluntarily adjusting their operations.
As part of the agreement with state regulators, PrizePicks and Underdog now only offer free-to-play or peer-to-peer games in MA, in which participants compete against one another instead of the house.
With several states cracking down on DFS operators, PrizePicks now offers its Pick’ Em Arena game in 12 states. The company launched the product in Florida in April after receiving a cease-and-desist letter from the Florida Gaming Control Commission (FGCC) for operating illegally.
