New York, NY / Lansing, MI – In a significant development impacting the fantasy sports and betting landscapes, regulators in New York and Michigan have announced a ban on popular ‘Pick ‘Em’ style fantasy sports games. Officials from both states have stated that these games mirror traditional sports betting too closely, prompting the decision to prohibit them.
Background and Implications
‘Pick ‘Em’ games, where players choose winners of sports games without considering a point spread, have been growing in popularity. These games have been considered part of the fantasy sports genre, which typically enjoys more lenient legal treatment than outright sports betting. However, regulatory authorities in New York and Michigan have reassessed their stance, asserting that these games constitute sports wagering, which is subject to more stringent legal and regulatory scrutiny.
The ban signifies a tightening of regulations around fantasy sports, a sector that has operated in a grey area between gaming and betting. In both states, sports betting is legal and regulated, but the introduction of this ban brings a new level of scrutiny and control.
State Responses
New York’s Take: The New York State Gaming Commission argues that ‘Pick ‘Em’ fantasy sports games do not meet the state’s definition of a fantasy contest. Under New York law, true fantasy sports are defined as games that “reflect the relative knowledge and skill of the participants” and are determined by accumulated statistical results of athletes. ‘Pick ‘Em’ games, by their nature, do not fit into this definition.
Michigan’s Stance: Similarly, the Michigan Gaming Control Board (MGCB) expressed concerns that the simplicity of ‘Pick ‘Em’ games veers too close to outright gambling on game outcomes, distinguishing it from other fantasy sports games that require players to compile and manage rosters over time.
Industry and Player Reactions
This decision has been met with mixed reactions. Proponents of the ban argue that it is a necessary step to ensure that fantasy sports remain a game of skill rather than chance. However, industry advocates and players have criticized the move as overly restrictive and detrimental to the fantasy sports industry, which has been a significant innovator in digital sports entertainment.
Future Prospects and Challenges
This regulatory shift could set a precedent for other states, potentially reshaping the national landscape of fantasy sports and sports betting. The industry may face tighter regulations and increased scrutiny as state authorities reevaluate the legal definitions and boundaries of fantasy sports and gambling.
Fantasy sports operators in New York and Michigan are now required to adjust their offerings to comply with these new regulations, potentially impacting their business models and customer bases. Legal experts suggest that these changes could lead to legal challenges as operators seek clarity on the regulatory requirements and scope of permissible fantasy sports activities.
Despite strong advocacy by The Coalition for Fantasy Sports, regulators in New York and Michigan have decided to ban Pick ‘Em fantasy sports games, amidst concerns that these games resemble sports betting too closely. This ruling follows a broader examination of the relationship between fantasy sports games and sports betting, which has also been a topic of scrutiny in Florida, Maine, Massachusetts, and Wyoming.
New York and Michigan Implement Bans on Pick ‘Em Games. On October 4, 2023, the New York State Gaming Commission (NYSGC) implemented a sports betting rule that outlaws fantasy sports contests that replicate or are akin to proposition betting offered by various service providers. This move was closely followed by a similar ban from the Michigan Gaming Control Board, continuing a regulatory trend that began with a September 2023 ruling in the state.
In New York, the rules are anticipated to be formalized by October 18. NYSGC has clarified that these new regulations won’t affect traditional Daily Fantasy Sports or casual fantasy leagues. The Coalition for Fantasy Sports, which represents leading Pick ‘Em game operators like PrizePicks, Underdog Fantasy, and Sleeper, had argued these games should be considered games of skill as per the Unlawful Internet Gambling Enforcement Act of 2006, but to no avail.
Underdog Fantasy remarked on their ongoing discussions with the NYSGC to comply with the upcoming regulations. PrizePicks also noted its active engagement with the NYGC, expressing gratitude for their members’ advocacy efforts and vowing to work with policymakers to continue providing fantasy sports games in New York.
Michigan Follows Suit with Automatic Rule Enforcement
Michigan’s rule to ban Pick ‘Em games was also set into motion, automatically passing legislative hurdles. Similar to New York’s stance, the Michigan Gaming Control Board and regulators in four other states have highlighted the resemblance of Pick ‘Em games to player propositions offered by sportsbooks.
Despite a vigorous public campaign by The Coalition for Fantasy Sports, including over 2,600 emails and 700 phone calls to lawmakers in Michigan, the rules were ratified by default when no action was taken by the Joint Committee on Administrative Rules within their 15-day review period.
Consequences and Industry Reactions
As a result of these regulations, PrizePicks faces the need to withdraw its operations from both New York and Michigan. Other Daily Fantasy Sports applications that don’t feature Pick ‘Em games remain unaffected. The bans, according to Pick ‘Em game operators, result from the non-regulated status of these other apps. The operators, referencing the 2006 federal law, continue to assert their stance across the involved states. With the bans now effective in three states, attention turns to upcoming regulatory decisions in Massachusetts and Wyoming.
New York / Michigan, United States – In a landmark move, regulatory authorities in New York and Michigan have officially banned Pick ‘Em fantasy sports games. This decision comes amid growing concerns over the blurring lines between these games and traditional sports betting. The bans, which have caused a stir in the fantasy sports community, underscore the evolving regulatory landscape surrounding online gaming and betting.
Regulatory Crackdown on Pick ‘Em Games
The New York State Gaming Commission (NYSGC) led the charge on October 4, 2023, with a new rule prohibiting fantasy sports contests that imitate or have the effect of mimicking sports betting, as offered by various service providers. Michigan’s Gaming Control Board quickly echoed this decision, effectively banning Pick ‘Em games. These changes mark a significant regulatory shift and represent the states’ commitment to clearly demarcate between sports betting and fantasy sports.
The Coalition for Fantasy Sports’ Advocacy Falls Short
Despite concerted efforts by The Coalition for Fantasy Sports, representing key Pick ‘Em game operators such as PrizePicks, Underdog Fantasy, and Sleeper, their arguments failed to sway the regulatory tide. The Coalition had contended that Pick ‘Em games should be viewed as games of skill, aligning with the framework set by the Unlawful Internet Gambling Enforcement Act of 2006. Yet, the resemblance of these games to sports betting led to their downfall in both states.
Impact of the Ban on Operators and Players. Underdog Fantasy expressed their commitment to ongoing discussions with the NYSGC, aiming to adapt to the new rules. Similarly, PrizePicks is actively engaging with the NYGC to find a path forward for fantasy sports in New York, acknowledging the support and advocacy of their state members. The ban’s automatic implementation in Michigan followed a less contested path, with the Michigan Gaming Control Board’s rules clearing legislative hurdles without active opposition.
The implications of these bans are significant for operators like PrizePicks, which now face the challenge of withdrawing their services from both states. Notably, Daily Fantasy Sports applications that do not offer Pick ‘Em games are not affected by these new regulations, highlighting a potential regulatory disparity.
Broader Implications and Industry Outlook
The decisions in New York and Michigan could set a precedent for other states grappling with similar issues. With fantasy sports’ popularity soaring and sports betting becoming increasingly mainstream, the distinction between these two forms of gaming is growing ever more critical. As states like Massachusetts and Wyoming ponder regulatory proposals, the industry eyes these developments to gauge future trends.
The ban on Pick ‘Em fantasy sports games in New York and Michigan signals a new era in the regulatory approach to online gaming and betting. These changes not only impact game operators and players but also indicate a more stringent interpretation of gaming laws. As the landscape continues to evolve, the distinction between skill-based games and gambling remains a pivotal and contentious issue at the heart of the fantasy sports and betting industries.
Conclusion
These regulatory actions in New York and Michigan mark a significant shift in the handling of fantasy sports games, specifically addressing the fine line between skill-based fantasy sports and sports betting. The developments could reshape the fantasy sports landscape, as industry players and lawmakers navigate the complex intersection of gaming, skill, and chance.
The bans in New York and Michigan represent a pivotal moment in the evolving intersection of fantasy sports, sports betting, and regulatory oversight. As the landscape continues to shift, the decisions made by these states could have far-reaching implications for how fantasy sports are played and regulated across the United States. Stakeholders from all sides of the debate will be watching closely to see how these changes affect the future of sports entertainment and gaming.
