Clash Mounting over Legalities: Sports Wagering versus Fantasy Sports Games
In the world of sports fervor, enthusiasts can dive into the thrill of predicting player statistics in Pick'em-style games, available on platforms like Underdog Fantasy and Dabble. These contests have customers pick an over or under for various statistical categories, earning payouts when the picks match reality. Butdyfferentiating them from sports betting can be a sticky wicket, with a few states placing them under sports betting regulations.
The latest hubbub surrounds premium DFS operators like PrizePicks and Underdog Fantasy, offering markets similar to a two-leg parlay of pitcher strikeouts. This two-in-one package puts fantasy sports squarely in the sports betting court.
As states weigh in on this topic, the fight for clarity is on. Ohio sports betting regulations, for instance, lump Pick'em-style contests into the daily fantasy sports (DFS) no-no. Regulators in Wyoming and Maine have also begun exploring the waters, issuing warnings to DFS operators. Michigan's proposed regulations aim to put limits on the freedom of some popular operators, like PrizePicks, potentially impacting their ability to do business in the state.
Underdog Fantasy, which offers similar markets to PrizePicks, halted operations in Michigan back in 2022 in anticipation of these regulatory crackdowns. Massachusetts regulators have entered the scene, and the Massachusetts Gaming Commission is currently reviewing the matter closely.
New York's gaming commission has recently updated its stance, ruling that some pick'em-style games, while different from traditional sports betting, still veer too close to the line of internet fantasy sports. On the other hand, Alabama's DFS guidelines have been tweaked, allowing operators like PrizePicks to continue offering their unique blend of fantasy and sports betting.
The question of skill vs. chance arises when examining these pick'em contests. Marc Edelman, a gaming law expert and professor at Baruch College, states that the focus should be on whether the games rely predominantly on skill, use predictions on more than one athlete from different teams, and have outcomes based on those athletes' statistics. Edelman argues that pick'em contests, because they pit players against the house, could potentially fall under the umbrella of sports betting.
Underdog Fantasy CEO Jeremy Levine, however, contends that his company's offerings are legit fantasy sports, based on skill, multiple athlete predictions, and statistical outcomes from real-world contests. He believes these contests are not limited to just FanDuel and DraftKings' salary-cap games.
The legal waters are murky, with three tests often coming into play: predominant factor, material element, and any chance. Sports betting is usually considered a game of skill in most U.S. jurisdictions. Other gaming experts indicate that skill plays a defining role in these modern versions of DFS, making them similar to their salary-cap counterparts.
Nevertheless, state regulatory action against pick'em-style contests is heating up, and the perspectives of experts within the industry are starting to diverge. Underdog Fantasy has accused two mobile sports betting giants, FanDuel and DraftKings, of attempting to stifle competition and influence regulatory decisions against companies like Underdog and PrizePicks. Only time will tell how this drama unfolds.
- Underdog Fantasy and PrizePicks offer a two-leg parlay style of sports betting on platforms like Underdog Fantasy, venturing into the sports betting court.
- Ohio, Wyoming, Maine, and Michigan are among the states that are discussing the regulation of these sports betting-like contests, with some viewing them as sports betting activities.
- In some states, like Michigan, Underdog Fantasy has paused its operations due to anticipated regulatory crackdowns on these pick'em-style games.
- There is ongoing debate in the industry about whether these pick'em contests should be considered sports betting or not, with some experts arguing that they could fall under the sports betting umbrella.
