New York bans prop-style DFS in regulations
New York’s explicit ban on pick’em daily fantasy sports (DFS) contests passed despite a last-minute push from Underdog Fantasy and PrizePicks, which have done much to popularise the games.
In 2016, then governor Andrew Cuomo signed a bill into law legalising daily DFS in New York State. After being challenged in the courts, the state eventually proved victorious in 2022 in White vs Cuomo, clearing the way for the activity.
However, only DFS businesses operating prior to 10 November 2015 were permitted to continue offering fantasy sports through a temporary licence with the regulator. Once the final regulations were created other companies would be allowed to apply.
The NYSGC issued draft regulations in July 2022, calling for public comment. These regulations included “a requirement that contests shall not be based on proposition betting and shall not have the effect of mimicking proposition betting”.
Following the period of public comment, the Commission issued revised regulations in August which continued the ban of prop-style games. After the public comment period expired in mid-September, it voted today on the final regulations.
New York: DFS giants battle upstarts
As of October 2023, there are currently 15 entities cleared to offer DFS in New York. These include market leaders FanDuel and DraftKings, which now earn the majority of revenue through gaming activities. The two have fought the inclusion of games mimicking proposition sports betting in state fantasy sports regulations.
Such games have been popularised by smaller operators Underdog and PrizePicks. While neither company currently has a temporary permit in New York, both lobbied against the banning of these DFS game in the regulations.
In August, Underdog founder and co-CEO Jeremy Levine released an open letter criticising FanDuel and DraftKings for anti-competitive behaviour.
“What do monopolists do when they are afraid of competition?” he wrote. “They use their money, power and influence to target competitors.
“That’s the playbook FanDuel and DraftKings are following, leaning on backroom lobbyists and pressing business partners to do their dirty work for them. It’s a classic play for entrenched big businesses who are afraid of competition.”
Meanwhile, PrizePicks customers sent over 1,400 letters to the NYSGC cricising the ban on pick-‘em games.
Similar battles over pick’em games are happening throughout the country. In Florida, gaming regulators sent a cease-and-desist letter to a number of DFS operators offering prop-style games.