Maine Regulator Sends Complaint To Underdog Over Prop Bet-Style Markets

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Maine is the latest state to clamp down on daily fantasy operators offering sports betting-like products, with regulators eyeing the product of Underdog Fantasy.

Maine Gaming Control Unit executive director Milton Champion confirmed Tuesday to LSR he sent a notice of complaint to Underdog for offering unlicensed sports betting in Maine. The operator has 30 days from when the letter’s July 11 date to respond.

“It’s a generic notice that you could be in possible violation, and we don’t get into anything specific,” Champion told LSR. “We’ll see what they come back with and deal with accordingly. I don’t know what our position [on potential punishment] is.”

Maine’s letter is the most recent issue for daily fantasy sports operators straddling a fine line in the games they offer. Wyoming’s chief regulator sent cease-and-desist letters to Underdog and PrizePicks on July 5.

Maine notice to Underdog

Underdog and other DFS operators offer pick’em games across the US, including in states that have not legalized sports betting. The games are similar to parlay-style, over-under prop bets at sportsbooks, Operators contend they fall under the UIGEA skill-based carveout for fantasy sports.

Following his return from suspension July 10, Champion was informed of Underdog’s products and sent the letter. He said the notice of complaint is:

“Regarding a possible violation of Maine statute or rules for allegedly taking wagers on a ‘Pick-Em’ or ‘Rival’ games which appear to not meet Maine definition of a fantasy contest which is a simulated game or contest where fantasy contestants compete against each other by using their knowledge and understanding of sports events and persons engaged in those sports events to select and manage a simulated team roster.”

The MGCU sent the complaint via certified mail to Underdog. According to Champion, the letter does not carry any punishment, but that could come based on Underdog’s response to the regulator.

Underdog barks back

Underdog has offered its products in Maine since 2020. An Underdog spokesperson told LSR Wednesday that the company will work with the MGCU on the issue.

“We have offered games in Maine since 2020 under a license that has been renewed by the state in each year since, and we pay all applicable taxes,” an Underdog statement reads. “As we do in all states, we will continue to work with Maine officials to ensure our games adhere to local regulations while providing sports fans the opportunity to play the Underdog games they love.”

Maine sports betting coming

DFS is legal in Maine, and Champion is working to launch sports betting later this year.

Champion said the approved sports betting rules are with the Office of the Attorney General, which has until Nov. 10 to review them. Barring a major issue, Champion expects to issue licenses to operators shortly after that date.

Champion, however, has yet to receive an application for online sports wagering in the state. Caesars is a known partner with three of the four tribes that control online access in Maine.

Daily fantasy sports complaints

Last month, the Wall Street Journal detailed PrizePicks operations and its customer acquisition strategy following comments from a FanDuel executive at a conference calling out allegedly questionable DFS products

Also last month, Wyoming regulators issued letters to cease operations in the state to Underdog and PrizePicks. That came after West Virginia and Maryland also issued similar directives last year.

New Jersey regulators issued a similar cease-and-desist letter to Prediction Strike. Ohio regulators are also cracking down on the issue with investigations of five operators.

Underdog, DFS operators work with regulators 

DFS operators point to a multitude of states that continue to allow them unfettered access to customers.

“We respect the views of regulators, including regulators in multiple states who have expressly approved our games as fantasy contests under their fantasy sports statutes,” a statement from the Coalition for Fantasy Sports sent to LSR last week reads. “We likewise respect the views of regulators in the small number of jurisdictions who have taken a different view based on issues specific to those states.

“We will continue to work with policymakers nationwide to uphold high standards of consumer protection, ensure our games are only marketed to those legally allowed to play them, and maintain our shared commitment to building responsible play programs.”