Underdog Fantasy is leaving the New York market after an $18 million settlement with the NYSGC. The company is expanding its Champions Pick’em product into New Jersey and Delaware.
New York Departure and Settlement Details
Underdog Fantasy first ventured into the New York market in July 2020 and operated without a formal license until it acquired Synkt Games in December 2022. This acquisition allowed Underdog to inherit Synkt’s temporary license, issued as part of a broader initiative by the state since 2016. The NYSGC later found that Underdog offered contests beyond what was allowed under Synkt’s license terms, leading to the hefty settlement. Underdog’s settlement includes covering back taxes owed by Synkt on its fantasy earnings, along with the possibility for Underdog to reapply for a permanent fantasy or gaming license in New York.
Comments from Underdog’s General Counsel
Nicholas Green, Underdog’s General Counsel, expressed mixed feelings about the settlement. “For nearly a decade, fantasy sports in New York has operated in regulatory uncertainty,” he stated, highlighting the challenges of navigating the state’s licensing process. Despite disagreements with the NYSGC’s findings, Green appreciated the clarity the settlement provided and looked forward to potentially resuming operations in New York.
Regulatory Landscape in New York
New York’s approach to fantasy sports regulation has seen its share of delays and legal hurdles. Legislation passed in 2016 aimed to regulate daily fantasy sports, but legal challenges delayed enforcement until 2021. Final regulations, which include limitations on contests akin to proposition betting, only came into effect in June 2024. The ongoing licensing process for permanent fantasy operators indicates the state’s effort to stabilize the regulatory environment.
Expansion into New Jersey and Delaware
Underdog is withdrawing from New York but continues expanding in other states. The company is launching its Pick’em Champions game in Delaware and is returning to New Jersey, where it had operated before. Green noted that New Jersey and Delaware have modern sports gaming regulations and mentioned the regulatory framework in these states that support their product.
Conclusion
Underdog Fantasy is retreating from New York while expanding into new markets, navigating the complex U.S. fantasy sports regulations. Despite setbacks in one state, it continues to adapt and find opportunities elsewhere.
