PrizePicks to cease contests in New York, pay $15M

PrizePicks, a prominent daily fantasy sports operator, has agreed to cease its for-money contests in New York and pay nearly $15 million to the state's gaming commission for operating without a license, according to a stipulation of settlement document obtained by ESPN.

The document, signed by representatives of PrizePicks and the New York State Gaming Commission (NYSGC), shows that the fantasy site was in violation of New York law for several years. The amount of the settlement is "based on the revenue PrizePicks generated through purported [interactive fantasy sports] contests from New York contestants" from June 4, 2019, through Dec. 19, 2023, and includes a penalty based on the number of days the purported contests were offered, according to the document.

The agreement states that although PrizePicks has operated in New York since June 2019, it "has not been, and is not, authorized to offer IFS [interactive fantasy sports] in New York pursuant to Article 14 of the Racing Law." It also states that "PrizePicks does not hold a temporary permit from the Commission to operate IFS in New York."

A spokesperson for the gaming commission told ESPN that "the settlement speaks for itself."

In the settlement, PrizePicks said it "operated in New York in a good-faith belief that it had the ability to do so."

The ruling won't disqualify PrizePicks from obtaining a new license, according to the settlement. A spokesperson for PrizePicks told ESPN that the company plans to pursue a license to offer its peer-to-peer product in New York.

"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," the spokesperson said in a statement. "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."

In October, New York clarified its regulations on fantasy sports, disallowing contests based on proposition betting or that mimic proposition betting.

On Monday, just a day after the first Super Bowl in Las Vegas, PrizePicks announced that it would at least temporarily cease its paid contests in New York because of changes in the gaming law there, effective Thursday.

PrizePicks offers real-money contests in 30 states and the District of Columbia.