Maine Fines Underdog Fantasy $391K Over Pick ‘Em Games

Article ByDavid Weir

October 26, 2023

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Posted in: Maine Gambling News, US Fantasy Sports News, US Gambling News, US Sports Betting News

Underdog Fantasy, a popular U.S. daily fantasy sports operator, has been hit with a substantial fine of nearly $400,000 by the Maine Gambling Control Unit (MGCU) for offering what the state regulator has deemed illegal fantasy games.

As a result of this fine, the company has decided to halt its Pick ‘Em offerings in Maine.

“This is the first of its kind and is setting a precedent,” said the MGCU’s Executive Director, Milton Champion. “It sets the tone going forward, but any other violations will be looked at separately.”

The issue first came to light in May 2023, leading to an official complaint by the MGCU on July 11. Underdog has provided details of its DFS offerings in the state throughout the year, leading to this ultimate decision by Maine regulators.

Underdog, and DFS operators more widely, have been under increasing scrutiny for their alleged sports betting-like Pick ‘Em proposition games. Regulators for New York and Massachusetts sports betting have banned the games in recent months, as have lawmakers in Florida.

Underdog’s Response and Future Steps

In response to the initial investigation, Underdog Fantasy argued that their Pick ‘Em games were flexible fantasy products.

However, Milton Champion countered this claim, stating that fantasy games cannot be wagers made against the operator and must involve more than one contestant.

The $391,850 fine represents a $50 charge for every one of the 7,800 or so customers in Maine that had used the Pick ‘Em Service. Out of that Pine Tree State customer base, Underdog claimed net revenues of $1.4 million so far in 2023.

While they have now ceased their Pick ‘Em offerings in Maine, they will continue to provide other daily fantasy sports (DFS) games.

“This is just an initial step in the administrative process, and we now have the opportunity to be heard by the state in the coming weeks and look forward to receiving a final decision that ultimately agrees with our interpretation of Maine law,” said an Underdog Fantasy spokesperson.

Pick ‘Em Games Under Scrutiny Nationwide

Maine is not the only state scrutinizing Pick ‘Em offerings. In recent months, Michigan and New York have also moved to ban these games.

Florida had previously introduced its ban and sent cease and desist letters to fantasy sports operators, including PrizePicks, Underdog Fantasy, and Betr.

Wyoming followed suit in July, sending cease and desist letters to both PrizePicks and Underdog. The bans typically target over/under proposition wagers on individual athletes, where customers bet against the house. Such a model could force fantasy sports operators to exit states that have implemented bans on Pick ‘Em games.

Sports Betting in Maine and Other States

Milton Champion also confirmed that online sports betting in Maine is set to launch in November. He revealed that the Penobscot, Maliseet, and Mi’kmaq tribes have entered into agreements with Caesars Sportsbook for mobile sports betting. The Passamaquoddy Tribe is yet to announce its preferred partner, but is expected to choose a different operator.

Maine’s actions to rule out Pick ‘Em games from their upcoming market has broader implications for the fantasy sports industry.

North Carolina sports betting regulators recently approved initial rules for its upcoming regulated market, which look likely to include a prohibition on Pick ‘Em games.

In New York, new rules were approved in October to ban DFS, with the New York State Gaming Commission finalizing rules that likely include a ban on Pick ‘Em style games.

Despite these new rules, an Underdog Fantasy spokesperson stated that they have not received any order to shut down their Pick ‘Em games in New York, and will continue to offer them.

The company also recently launched its Guard Dog initiative, aiming to promote responsible gambling across its U.S. operations.