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Underdog Fantasy Withdraws From N.Y. and Fined $17.5 Million, But Expands into N.J. and Delaware
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It’s been a day for Underdog Fantasy.
One of the leading daily fantasy sports (DFS) operators in the country, Underdog Fantasy announced today it has withdrawn all DFS contests from New York and will pay a fine of $17.5 million to the New York State Gaming Commission.
However, it also announced plans to expand its DFS games into both New Jersey and Delaware by the end of the month.
Goodbye New York
The decision to withdraw all DFS contests – both pick’em and draft – came after a ruling from the New York State Gaming Commission in which the commission determined Underdog was not in line with the state’s current DFS law.
Underdog Fantasy operated in the Empire State, like all major DFS companies in New York, under a temporary license. Underdog Fantasy acquired Synkt Games, and its temporary DFS license, in 2022.
However, the New York State Gaming Commission determined state law requires that temporary license holders not alter their DFS games from the time of license issuance. For Underdog, this means the company would have had to offer DFS games similar to the ones Synkt Games offered when it received its temporary license from the gaming commission in 2015.
The gaming commission, however, ruled that Underdog Fantasy did indeed alter its games from their original state and fined the company $17.5 million.
In a statement released to the media, Underdog disagreed with the commission’s interpretation of the law, but has agreed to settle the matter by withdrawing all games and paying the fine, which was based on the amount of revenue Underdog’s games generated in the state.
Underdog Fantasy has since applied for a permanent fantasy sports license in the state.
“It’s a unique, temporary license issue specific only to New York, and not related to any specific game format we offer,” Nicholas Green, Underdog’s General Counsel, said in a release statement. “Any fantasy game created after 2015, no matter the format, is not permitted under the commission’s interpretation of what games a temporary permitholder, like Underdog, can and cannot offer. The high fine amount speaks to the popularity of our games, as the settlement was calculated based on our revenue in New York.”
Green continued, noting that New York’s DFS landscape has operated in “regulatory uncertainty” for nearly the last decade. Consumers are limited to only a few “legacy operators” in the state, he said.
While Underdog does disagree with the commission’s interpretation of the law, Green said the settlement does provide clarity on state DFS licensing issues.
“The settlement recognizes that Underdog worked in cooperation with the commission and operated at all times in a good faith interpretation of state law. We look forward to offering all of our contests again to New Yorkers, and we are working with the commission to do so as soon as possible,” he said.
This is not the first time the New York State Gaming Commission has levied a hefty fine against a DFS operator. In February 2024, the commission fined PrizePicks nearly $15 million for operating in the state without a license.
Expanding into New Jersey, Delaware
While it will withdraw its DFS games from New York, Underdog also announced it will expand into both New Jersey and Delaware by the end of the month.
Underdog will offer its Pick’em Champions product in both state. When live, Underdog will offer a variation of its pick’em games in 36 states.
“New Jersey and Delaware have been at the forefront of modern sports gaming regulation, and bringing our Pick‘em Champions game to those states is yet another endorsement from highly respected regulatory bodies of the product we built, which much of the industry has now replicated,” Green said.
Robert is an expert on sports betting in the United States, specifically the legalization process and regulation surrounding the industry.
