PrizePicks to Cease DFS Contests in New York, Pay Nearly $15M
Sports Betting in New York: Peer-to-Peer DFS Games on Horizon?
PrizePicks will no longer offer its traditional pick’em paid contests in New York as of Thursday. The popular daily fantasy sports operator notified its customers of the change via emails sent Monday after Super Bowl 58.
This comes four months after the New York State Gaming Commission amended its daily fantasy sports rules to effectively prohibit games that mimic player proposition online bets. As part of the agreement, PrizePicks must pay a settlement of $14.9 million, which was based on revenue generated through interactive fantasy sports from New York contestants from June 4, 2019 through Dec. 19, 2023.
How does this affect the daily fantasy sports and sports betting in New York markets? Here’s what we know.
Licensing Evokes Changes
The issue, more or less, is that PrizePicks didn’t have the proper authorization to offer these contests despite operating in “good-faith belief” that it could do so.
“Due to recent updates in the licensing rules enacted by the New York State Gaming Commission, we put pause our paid contests in the state,” the email read. “After Wednesday, 2/14 at 11:59 p.m. ET, our traditional Pick ‘Em game will not be available.”
Instead, PrizePicks plans to offer its free-to-play contests with monetary prizes beginning Thursday at 7 a.m. Customers will continue to have access to their PrizePicks accounts and can withdraw their money at any time.
Pivot to Peer-to-Peer Contests
Amid crackdowns on these paid contests, several daily fantasy sports companies have already switched to peer-to-peer games. These, some regulators say, are less akin to prop betting. PrizePicks, which now operates in 30 U.S. states, recently launched peer-to-peer contests in Alabama, Tennessee, West Virginia and Wyoming. It hopes to acquire licensing to bring them to the Empire State as well.
The peer-to-peer games pit players against each other instead of the house according to their chosen entry fee and experience level. Users can win prizes by amassing the highest scoring entry within their group.
“We have notified our customers in New York that we will be switching to our FTP offering in the state on February 15th. We’re actively working with the New York Gaming Commission to get approval and licensure for our peer to peer product, Arena, and will be offering our free to play version until then,” a PrizePicks spokesperson said via an email to Legal Sports Report. “Our team is constantly working on a state by state basis to get the necessary approvals (and licenses where available) to offer our core PrizePicks product. That said – Arena, our peer to peer product, has been doing amazingly since launch, and we’re excited to continue to roll it out as well.”
Plotting the Next Steps
PrizePicks is now the third fantasy sports operator to pull its pick’em games from New York after the rule changes. Sleeper ceased operations in October, while Thrive Fantasy joined PrizePicks in announcing its exit after the Super Bowl between San Francisco and Kansas City. Underdog Fantasy is now the last major operator of pick’em games in New York.
The NYS Gaming Commission brought its new rules to the table in mid-2023. Despite receiving a hearty amount of feedback in support of pick’em games, the commission decided to follow through with its changes.
Now, PrizePicks has little choice but to figure out its next steps as sports betting in New York remains a fixture.
“We’re focused on expanding PrizePicks’ reach by creating new, innovative game types that push the PrizePicks brand and truly put sports fans at the center of gameplay,” Brian Huss, PrizePicks vice president of innovation, said via covers.com. “PrizePicks Arena is an exciting new twist on the PrizePicks experience that paves the way for future product innovations.”
Stay tuned for more updates on sports betting in New York.
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