Prize Picks Fined $15M in New York, Shuts Pick ‘Em Games Down in State

Article ByDavid Weir

February 14, 2024

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Posted in: New York Daily Fantasy Sports, New York Gambling News, US Gambling News, US Sports Betting News

PrizePicks this week announced it will cease offering Pick ‘Em style contests in New York from February 15. Now it has been revealed it was also hit with a $15 million fine from the New York Gaming Commission over the controversial games.

The regulator said the Pick ‘Em games amounted to New York sports betting when it banned the practice in October 2023. At the time, PrizePicks said it would fight the issue, and has continued to offer its primary game in New York.

Now, that is over. From February 15, PrizePicks will only offer its free-to-play arena game in New York.

The ruling says the operator broke sports betting laws between 2019 and 2023.

Prior to the announcement of this $15 million fine, it had been rumored that popular DFS operator PrizePicks intended to apply for a full New York sports betting license. However, now that the NYGC has come down firmly on the operator for breaking its rules, a full license could be in jeopardy.

“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,” said PrizePicks in a statement to media outlets.

“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.”

Details of the Fine

The New York Gaming Commission’s $15 million fine was based upon the revenue PrizePicks generated during nearly four years of illegal operation in the Empire State between June 2019 and December 2023. Over that time, it operated Pick ‘Em games, which the regulator refers to as Interactive Fantasy Sports or IFS.

PrizePicks “has not been, and is not, authorized to offer IFS in New York pursuant to Article 14 of the Racing Law,” the ruling said.

“PrizePicks does not hold a temporary permit from the Commission to operate IFS in New York.”

The ruling does not explicitly bar PrizePicks from entering the nation‘al‘s leading U.S. sports betting market in the future. However, the fine and the infractions that led to it will be almost guaranteed to come up in discussions with regulators should it apply for a license.

In the settlement filings, PrizePicks defended its position pursuant to operations in the grey area of the law that were previously undefined.

The company always “operated in New York in a good-faith belief that it had the ability to do so,” it said.

Pick ‘Em Games Scrutinized

This fine for PrizePicks is the biggest fine in recent time for DFS operators. But it isn’t the first time regulators and operators have clashed over the controversial Pick ‘Em games.

In October last year, operator Underdog Sports was fined $390K over its offering of Daily Fantasy Sports in Maine, shortly before the market for full Maine sports betting opened.

New York was not the only regulator to ban the games last year. Regulators for Massachusetts sports betting and lawmakers in Florida both moved against the Pick ‘Em format and operators that offer it.

In response, some DFS operators have decided to jump on the legal sports betting train.

PrizePicks was the most popular DFS app in New York, ahead of previous market leaders DraftKings and FanDuel, who have now pivoted to focus on full sports betting.

PrizePicks has reportedly been looking into starting a full sportsbook. But that plan could now be derailed by this fine.

However, Underdog Sports’ fine from regulators in Maine seemingly did not hinder its recent license applications. The operator was successfully granted full licenses for sports betting in Ohio and the upcoming North Carolina market.