PrizePicks to pay $15m as part of settlement with New York’s regulator
Cease-and-desist order comes into effect which will see the leading pick’em DFS operator pivot to free-to-play games in Empire State
PrizePicks will pay a $15m (£12m) settlement to the New York State Gaming Commission (NYSGC) for operating “purported” DFS contests in the state between 2019 and 2023.
The news of the settlement comes days after the Atlanta-based DFS firm announced it would be pulling its against-the-house pick’em games from the state.
That decision was expeditated by the regulator’s ruling in October to ban the format, with PrizePicks set to offer free-to-play contests while it applies for a licence “to bring its pick’em games back to customers”.
New York banned the against-the-house format of pick’em-style contests last October, accusing these types of products of “mimicking” parlay prop betting.
The pulling of pick’em-style games in New York was detailed in the settlement agreement in a cease-and-desist ordered issued by the NYSGC and is based on the revenue PrizePicks generated between 4 June 2019 and 31 December 2023.
The settlement, which officially amounted to $14,969,688 and must be paid by 1 March, also took into account the total number of days between 2019 and 2023 that PrizePicks was offering pick’em games to New Yorkers.
As detailed in the settlement document, PrizePicks asserted the company had “operated in New York in a good-faith belief that it had the ability to do so”.
However, the NYSGC counter-detailed in the document that PrizePicks had agreed to two key stipulations following the investigation.
Those were that the operator does not hold a temporary permit from the regulator to operate in the state, and that it had not been authorised to offer pick’em games.
The document noted that PrizePicks had cooperated throughout the investigation, and the findings did not preclude the firm from applying for the correct licence.
In a statement released to LSR, a PrizePicks 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 modernise 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, ensures strong consumer safeguards and generates tax revenue for the state.”
PrizePicks, which offers free-to-play games in Colorado and Michigan, recently launched a real-money peer-to-peer DFS format, initially in Wyoming, West Virginia, Tennessee and Alabama.