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The daily fantasy sports (DFS) operator PrizePicks has agreed to pay a $15 million settlement to the New York State Gaming Commission (NYSGC) for operating in the Empire State without a gambling license.
According to a report by ESPN, the document co-signed by the two parties shows that the fantasy site was “in violation of New York law” for several years.
$15M settlement determined on three years of PrizePicks’ revenue
The settlement amount is based on the revenue PrizePicks produced through alleged fantasy contests made by New York bettors between June 4, 2019, and Dec. 19, 2023.
The official penalty, $14,969,688, also includes a calculation based on the number of days the contests were offered. The penalty must be paid by March 1, 2024.
A spokesperson of the New York State Gaming Commission told Legal Sports Report: “The settlement speaks for itself.”
The departure comes four months after NYSGC issued new DFS rules
The news about the settlement came one day after PrizePicks stated it would no longer offer its pick’em DFS games in New York, starting Feb. 15.
That announcement came one day after Super Bowl LVIII. And four months after the New York regulators finalized rules on pick ’em fantasy sports in October. The NYSGC’s new rules included a provision that DFS contests “shall not be based on proposition betting and shall not have the effect of mimicking proposition betting.”
Besides PrizePicks, those rules also applied to Underdog Fantasy and Sleeper. Sleeper left the New York market two weeks after the ruling. However, Underdog continued to offer its services under a temporary license.
PrizePick plans to pursue a NY license to offer its product legally
In the settlement, PrizePicks emphasized it had “operated in New York in a good-faith belief that it had the ability to do so.”
The settlement further discloses that the ruling won’t disqualify PrizePicks from gaining a new license.
PrizePicks’ spokesperson told ESPN that the company plans “to pursue” a license to offer its “peer-to-peer product” in New York. According to the report by ESPN, a spokesperson said:
“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.
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, ensure strong consumer safeguards, and generates tax revenue for the state.”
