PrizePicks To Pay $15 Million For Operating Without License In New York

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PrizePicks agreed to pay $15 million to New York for offering “purported” fantasy sports contests without a license, as part of a settlement with the state gaming commission.

News of the settlement comes a day after PrizePicks announced it would cease paid operations in New York this week, which is also part of the settlement. PrizePicks remained operational in New York throughout football season despite the state approving rules in October that banned its primary game, announcing its departure the day after Super Bowl 58.

“The settlement speaks for itself,” a spokesperson with the New York State Gaming Commission told LSR.

Terms first were reported by ESPN.

Settlement based on three years of revenue

The settlement amount is based on revenue PrizePicks generated, operating as an unlicensed operator from June 4, 2019 through December 19, 2023. The official penalty is $14,969,688, to be paid by March 1, 2024.

“Our team is pleased to have reached a resolution with the Gaming Commission and we look forward to continuing our work with the State to modernize New York’s daily fantasy sports laws,” a company spokesperson said in a statement. “As safer, skill-based DFS contests like ours rise in popularity, we will work constructively with policymakers on thoughtful legislation that allows New Yorkers to play the contests they love, ensures strong consumer safeguards, and generates tax revenue for the state.”

In the settlement, PrizePicks said it had “operated in New York in a good-faith belief that it had the ability to do so.”

PrizePicks was the most downloaded daily fantasy sports app this NFL betting season, according to Citizens JMP Securities, totaling 3.2 million downloads through Conference Championship weekend. That was more than twice that of DraftKings and FanDuel combined.

Exit comes four months after ban

New York issued rules in October banning pick’em fantasy contests that pit players against the house, which applies to a chief product of PrizePicks, Underdog Fantasy and Sleeper. Like an increasing number of states, New York regulators ruled those types of games, where users pick a combination of different athletes to go over or under a given statistic, are more akin to sports betting than fantasy.

Sleeper pulled out of New York shortly after, while Underdog remains operational under a temporary fantasy sports license.

With football season over, PrizePicks will switch to free-to-play fantasy contests in New York, until it gets approval for paid peer-to-peer pick’em.

Standard PrizePicks games gone in NY

The settlement makes a point of describing the games as “purported” fantasy sports offerings.

PrizePicks is in the process of applying for a license to offer peer-to-peer games in New York.

Its paid player-vs.-house pick’em games, however, are gone in the Empire State.