Underdog Fantasy, one of two daily fantasy sports operators ordered to leave Wyoming amid allegations of unregulated sports betting, has been given extra time to meet regulators’ demands, according to an email shared with LSR.
The DFS operator has until August 18 to notify the Wyoming Gaming Commission of its intentions. That date is 10 business days after an Underdog spokesman acknowledged receipt on August 4 of an electronic version of cease-and-desist letters dated July 5.
Their response was originally due July 19. Underdog and PrizePicks, the other fantasy operator asked to leave the state, continue to operate in Wyoming, according to their websites.
The Wyoming Gaming Commission did not respond to multiple requests for comment.
The status of PrizePicks’ deadline is unclear. Sources at both companies indicated neither was aware of the letters until LSR reported them, but PrizePicks declined repeated requests for clarification.
States zero in on daily fantasy sports, betting overlap
Over the past two weeks, news broke of nearly half a dozen states addressing single-player fantasy sports markets:
- Alabama
- Maine
- Massachusetts
- New York
- Wyoming
With the exception of Alabama, each of the states has legal sports betting, which typically involves a much higher tax rate and fee structure than DFS.
Underdog and PrizePicks defend the games as legal under a federal carveout for skill-based and combination games in UIGEA.
Regulators spurred by others
Regulators in Massachusetts, the latest state to join in, cited inspiration from their national counterparts:
“There’s been a great deal of activity surrounding the boundaries of sports wagering and daily fantasy sports, and whether there’s some overlap between the two,” MGC Interim Executive Director Todd Grossman said at an August 8 public meeting. “That’s been addressed in a number of jurisdictions now and has been discussed publicly. I wanted to note we are certainly aware of this issue, and we’re in the process of reviewing it.”
New York regulators went as far as to call the single-player games “contests that have the effect of mimicking proposition betting.”
That particular form of betting is on the rise. According to PointsBet, player props accounted for 11.4% of all money wagered on the NFL in 2022, a 3.2% from the previous season.
Neither company offers their single-player games in Ohio or Maryland, where they are explicitly prohibited.
Underdog CEO responds to scrutiny
Underdog CEO Jeremy Levine responded on August 9 with an open letter accusing DraftKings and FanDuel of pushing these investigations in the backrooms of state agencies.
DraftKings and FanDuel did not respond to a request for comment. Earlier this summer, a FanDuel lobbyist publicly called out some DFS operators for “running illegal sportsbooks.”
Meanwhile, the largest markets where PrizePicks and Underdog operate, California and Texas, have been quiet on any potential fantasy crackdown.
