Pick'em Fantasy Operators Call For Clearer State Guidelines

January 8, 2024
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Operators of pick’em-style fantasy sports games continue to make their case for improved clarity when it comes to what type of offerings states will permit.
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Operators of pick’em-style fantasy sports games continue to make their case for improved clarity when it comes to what type of offerings states will permit.

During a panel discussion at the National Council of Legislators from Gaming States (NCLGS) winter meeting last week, representatives from leading operators PrizePicks and Underdog Fantasy told an audience of lawmakers and regulators about the need for clear definitions of the types of games operators can offer on a state-by-state basis.

“We want to work with regulators and legislators to make sure that we have a legal framework in place that gives certainty so that we know where the boundaries are and we comply with state requirements, state laws, rules and regulations,” said Derek Schmidt, a former Kansas Attorney General and partner at Husch Blackwell law firm which represents PrizePicks.

“Let’s find a common ground, let’s find good sound legislative policy that regulators can then take and build a framework for, but let’s not bury our head in the sand and take contests away from people and don’t allow them to play,” added Stacie Stern, vice president of government affairs for Underdog. “They’re going to go find something similar on their phone; it’s easy to do.”

The pick’em or single statistic fantasy category has been under fire in recent months, with about a dozen states taking some kind of regulatory action over the last year to try to curtail the popular fantasy games, either through rule changes, sanctions or letters from regulators urging PrizePicks, Underdog and other companies to stop offering the games and proclaiming the games illegal.

One of the regulators that sent notice to three prominent pick’em operators was the Florida Gaming Control Commission (FGCC), which ordered the companies last September to cease offering the games in the Sunshine State, calling them “illegal bets and wagers”.

Immediately following the fantasy sports panel, FGCC executive director Louis Trombetta appeared on a separate panel to discuss the proliferation of illegal skill game machines, but quickly drew a parallel between the two conversations.

“Popularity does not equal legality,” Trombetta said. “One of the things we’re finding is that when we send cease and desist letters or when we physically go in and seize machines and conduct some type of criminal activity, we get complaints from people, we get complaints and called from different representatives and legislators saying, ‘Hey, what are you guys doing.’

“We’ve kind of become fun police, which is something that I don’t say in a bad way,” he added. “I think that is our role.”

One regulator that drew a clear early line in the sand on fantasy sports was the Ohio Casino Control Commission, which began regulating fantasy sports in 2018 and sports betting in 2022 and does not permit the single-statistic offering.

Andromeda Morrison, general counsel and director of skill games for the commission, said the decision was the result of strong communication between the regulator and legislators to determine legislative intent.

“It was working with the policymakers to understand we're going to have a demarcation here and then being able to work with applicants or interested applicants before they made a decision whether or not they wanted to stay in the Ohio market now that it was becoming regulated. 

“Or if they wanted to come into Ohio to know that, hey, there's a demarcation, these will not be permitted and then when sports gaming came around, an opportunity presented itself for them to come in and get that additional license.”

Underdog operates season-long fantasy games in the state, and has a separate sports-betting license, but does not offer against-the-house fantasy games in Ohio.

“Ohio's a really good example of we knew what products would be allowed and regulated and we knew which products would not be,” Stern said. “We understand that delineation and differentiation between the products and we don't operate our single player contests there. 

“It's a really good example of a state where we knew which lanes to stay in and to operate in.”

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