Arkansas issues cease-and-desist letters to PrizePicks and Underdog over pick’em offerings
State regulator judges contests to be associated with player prop bets, and therefore sports betting, as operators also set to exit Florida following second round of demands from regulator
Underdog and PrizePicks have both been issued with cease-and-desist letters by the Arkansas Department of Finance and Administration (DFA) after the state regulator judged the DFS operators are offering unlicensed sports betting in the state.
Under existing Arkansas law, DFS operators are allowed to serve users in the state under the protection of Act 10775 of the 2017 Regular Session.
However, the regulator said that the pick’em-style contests offered by the operators were more associated with player prop bets, which fall under the sports betting category.
The DFA said both Underdog and PrizePicks were not required to validate if users were 21 or older, and had not paid taxes related to sports betting in the Natural State.
Trent Minner, DFA regulatory administrator, commented: “Back in the day, places that tolerated illegal gambling were referred to as ‘wide open.’
“The internet is today’s equivalent of a ‘wide-open town’ where unlicensed gambling thrives outside of the taxation and age-verification requirements required by the law. As the state’s regulator of licensed sports betting, DFA is putting these companies on notice that Arkansas is not ‘wide open’.”
Jim Hudson, DFA secretary, added: “Arkansas law requires sports bets to be placed with a licensed sportsbook that is required to verify the age of the consumer. The state has an interest in protecting Arkansas’ children from operators seeking to exploit underage Arkansans.”
The DFA’s clamp down marks yet another blow for DFS operators and the pick’em contests that have soared in popularity in the US.
The decision from the Arkansas regulator was mirrored by those in Florida which sent a second round of cease-and-desist letters to pick’em operators last month, as reported by Legal Sports Report (LSR).
The first round of letters, which were sent to PrizePicks, Underdog and micro-betting operator Betr, was delivered in September and demanded that they cease offering or accepting wagers or bets immediately.
As reported by LSR, the operators are expecting to leave the Sunshine State by March 1 while considering a court response to the orders to leave.
The January letter read: “If the cessation is completed within that timeframe, the Commission will deem the company and all its officials, directors and employees to have complied with the demands of the cease-and-desist order, and the Commission will not take further action, including referral to the Office of Statewide Prosecution or to any State Attorney.”
Elsewhere, it has been reported that the Kansas Racing and Gaming Commission (KRGC) has ordered Underdog Fantasy and five other fantasy sports operators to leave the state over “illegal sports wagering.”
KRGC executive director Don Brownlee sent an internal memo last September, calling out 10 operators for offering sports betting illegally under the guise of fantasy sports.
It was reported that Underdog pulled its offering in Kansas in November but continues to offer peer-to-peer fantasy in the state.
Earlier this week, PrizePicks agreed to pay a $15m settlement in New York for operating in the state unlicensed for three years. The Atlanta-based DFS operator also announced that it would be pulling its against-the-house pick’em games from the state.