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PrizePicks CEO Adam Wexler has said his company is looking to protect its fantasy-sports turf despite efforts in multiple states to curtail the company’s pick’em-style games, even as it prepares to launch a peer-to-peer product.
The daily fantasy sports (DFS) company has been at the center of a multi-state lobbying battle over the legality of the pick’em-style game, which sees players compete against the house in selecting multiple player, single-stat over/unders.
The product differs from traditional fantasy sports games in that entrants compete against each other and enter line-ups of players that receive points based on statistical output.
State regulators in Michigan and New York adopted new rules in 2023 to curtail the increasingly popular games, while officials in other states including Florida, Arizona and Maine have declared in various forms that the games are not permitted.
Wexler told Vixio GamblingCompliance in an interview that the increased scrutiny is a result of the company’s success and a push from industry leaders DraftKings and FanDuel to impede growing competitors.
“They know we’re formidable,” he said. “They’ve tried to hit us from a lot of directions, and not just us. This is the category as a whole.
“It’s not like the regulators woke up in our seventh football season and said they have an issue with our product,” he said.
“If anything, I would’ve thought there were bigger issues in states where we don’t possess [licenses] and don’t have the ability to get licensed.
“But all of a sudden the states where we already possess licenses, where we already pay taxes, became an issue. That’s kind of crazy to me.”
In the few states where market-share data is available, it is evident that PrizePicks has become a dominant player in the fantasy-sports landscape.
In the first half of 2023, PrizePicks accounted for 53 percent of fantasy sports market share in Arizona, Massachusetts and Michigan, according to Vixio data, well ahead of DraftKings at 23 percent and FanDuel at just over 10 percent.
Underdog Fantasy, another operator that offers pick’em-style games, also clocked in at just under 11 percent market share.
While pledging to defend its position, Wexler said his company will adapt as needed in states if the product hits legal barriers.
“We’re never going to get banned from a state, we’re just going to pivot our offer,” Wexler said, citing Michigan, where the company has begun offering a free-to-play product rather than its standard offering following a change in rules.
“I think [FanDuel and DraftKings'] hope and expectation may have been that they’re just going to crush us out of existence, and that’s far from the reality of what’s going to happen and what has happened.”
Wexler said that part of that pivot will be offering a peer-to-peer product that “certain states” will have access to in the first quarter of 2024. He declined to provide specifics on the new offering.
Although many operators in the daily fantasy space either offer a separate sports-betting product or are looking to do so, Wexler said a PrizePicks sports-betting offering is not on the company’s current roadmap.
“We love our lane, we’re trying to protect our lane at all costs, we’re spending eight figures to try to protect our lane,” he said.
“Fantasy sports, with the way the laws are drawn up over the last decade, has a lot of room for innovation, and just because we’re innovating and being successful does not mean we should have to move into sports betting.”
Critics have argued that the similarities between PrizePicks’ offering and a same-game parlay show that pick’em games are a form of sports betting, but Wexler argues that, historically, individual player-based outcomes have been a fantasy product.
“I think that one of the narratives that is not being properly told out there in the world these days is that fantasy sports has always been about player predictions,” Wexler said.
“Sports betting, for the longest time, was about which team was going to win. Only when it got to America did it kind of converge right in the middle.”
PrizePicks effectively began in 2017 as a venue for players to project whether players would exceed their fantasy point projections on popular season-long fantasy sites like Yahoo.
But in 2019, Wexler said the company noticed single-statistic predictions being popularized by the now-defunct Monkey Knife Fight and pivoted to a similar offering.
“Not only were they doing single-statistic offerings, but they were also signing deals with professional teams across [Major League Baseball] and NFL and more, and they were kind of paving the path in front of us,” Wexler said.
“When they weren’t getting slapped on the wrist for doing single-statistic, we always knew that was going to be a bigger opportunity, so we finally opened that up around the beginning of 2020.”
In states where arguments have been made public, much of the debate centers around provisions of state laws and regulations governing fantasy sports.
These discussions include whether the single-statistic format satisfies legal definitions, how many participants are required to participate in a contest, and — in states where at least two participants are required — whether the operator counts as a game participant.
Wexler said many state laws on fantasy sports were derived from the Unlawful Internet Gambling Enforcement Act of 2006, which included a carve-out for fantasy games.
“If they were focused on what they now seem to be focused on, they would have clearly stated that it needs multiple participants in these fantasy contests in these laws, when in reality the more common language was one or more participants are required for these,” he said.
“Obviously, the other part of it, the main requirement was a fantasy contest must include multiple players from multiple teams. As an entrepreneur I’m looking at that and saying, ‘I love the concept of daily fantasy, but I hate the execution’.
“I’m a casual, I don’t want to have to know every little thing about every player on the field, as well as everybody who I’m playing against. I just want to make some predictions and have some skin in the game, so we basically took those minimum requirements of the fantasy contests and built on top of that.”
Ultimately, Wexler said his vision for the company is to become a full second-screen experience for players rather than an alternative to sports betting.
“Everyone, DraftKings and FanDuel in particular, thinks we’re competing with that, but what I’ve been telling people for years, we’re going after Twitter Sports,” he said.
“When Aaron Rodgers goes down with an injury, most people pull up Twitter. But it’s also a very interesting place to pull up our community and see what everybody’s saying there because they’ve got skin in the game.”
