Arizona Regulator Orders DFS Operators To Stop Pick’em Contests

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Arizona sports betting regulators last week ordered a stop to DFS pick’em contests that mirror sports betting, joining the growing number of states looking into daily fantasy sports pick’em games.

The Arizona Department of Gaming, as well as the Mississippi Gaming Commission, sent letters last week to daily fantasy sports operators regarding prop bet-style pick’em contests that mirror sports betting.

An ADG spokesperson confirmed a “guidance letter” was sent Wednesday to all DFS licensees about the “legality of flexible fantasy contests or pick’em fantasy.” Meanwhile, the MGC sent a letter Tuesday to DFS operators emphasizing the state’s existing rules.

Underdog is still operating in both states, while PrizePicks continues to operate in Arizona.

Arizona cease and desist for pick’em

Both PrizePicks and Underdog run pick’em contests in Arizona. The ADG told operators to stop offering the pick’em products, which the regulator found are not compliant with the state’s DFS laws:

“The disputed wagers are not fantasy sports contests because a key piece of a fantasy sports contest is that participants create teams and compete against one another in simulated games,” Assistant Director of Compliance Andrea Milford wrote in the letter, obtained Thursday by LSR. “The disputed wagers do fit squarely within the definition of event wagering. So, they may only be offered by properly licensed event wagering operators.”

Arizona sports betting and DFS became legal in 2021. Spokespeople from PrizePicks and Underdog said the ADG reviewed and approved the pick’em contests when they obtained their DFS licenses in 2022.

Earlier this year, the ADG had no comment on pick’em games other than a spokesperson confirming Underdog and PrizePicks are licensed fantasy sports operators. Beyond confirmation of the letter this week, the ADG offered no further comment on the issue.

Mississippi emphasizes state rules

An Underdog spokesperson confirmed receipt of the letter from the MGC. PrizePicks does not operate in Mississippi.

MGC Executive Director Jay McDaniel wrote in a letter obtained Thursday by LSR that Mississippi law does not allow player vs. house contests. He also wrote one factor of an athlete’s performance cannot determine DFS contests.

Mississippi legalized DFS in 2017. MGC Director of Compliance Stephanie Sills told LSR earlier this year, “We do not allow ‘pick’em products’ in our state since it looks just like sports betting.”

DFS operators working with regulators

Spokespeople from both PrizePicks and Underdog said the operators will continue to work with regulators in the states.

“We will be working with the regulators in Arizona and Mississippi, as we do in all states where we operate, to address their concerns,” an Underdog spokesperson said Thursday.

Meanwhile, a PrizePicks spokesperson said, “We look forward to continued dialogue with ADG to ensure that there remains a competitive marketplace for fantasy sports in Arizona.”

Growing number of states question pick’em

Arizona and Mississippi are the latest regulatory agencies this year to inquire about the questioned DFS contests. Other situations include: