Underdog founder bites back at campaign against props-style DFS

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The gloves are coming off in the battle between regulated sportsbooks and DFS sites like Underdog Fantasy, Prize Picks, and the upstart Betr Picks.

Last month, FanDuel’s Senior Director of State Government Relations Cesar Fernandez minced no words about how he felt about these companies during a panel at the National Council of Legislators from Gaming States (NCLGS) summer meeting.

“There are companies today posing as fantasy sports operators, and they are running illegal sportsbooks,” he said.

Since then, multiple regulators have inquired with these sites about operations. According to Legal Sports Report, Wyoming regulators sent a cease and desist to these prop-style fantasy operators.

Underdog Fantasy CEO blasts FanDuel, DraftKings in open letter

On Wednesday, Underdog Fantasy CEO Jeremy Levine fired back with an open letter to the company’s customer base.

Levine said FanDuel and DraftKings are the drivers behind this push to crack down on DFS and that the attention is “not organic.”

“When the Supreme Court later permitted states to legalize sports betting, DraftKings, FanDuel, and their lobbyists went to work. But this time they wrote laws designed to make it hard for innovators to break into the brand-new sports betting industry. The strategy worked and they had a near instant monopoly, capturing nearly 80% of the U.S. sports betting market,” Levine wrote.

“But Underdog and other companies innovating in fantasy sports and sports betting threaten their monopoly. They’ve seen our company, and others, produce superior products, more exciting user experiences, and begin to challenge them for sports fans’ attention – and they’re scared that we will challenge their market positions. We’re already bigger than they are in fantasy. Frankly, they should be scared.”

DraftKings and FanDuel faced similar scrutiny prior to the repeal of the Professional and Amateur Sports Protection Act (PASPA) in 2018. Levine pointed out the companies’ histories and suggested the end game for these companies is online casino expansion.

“Having already abandoned fantasy sports for sports betting, FanDuel and DraftKings aren’t hiding their next move: abandoning sports betting for the huge potential online casino market. Put simply, they see sports betting as a stepping stone to having digital slot machines in every American’s pocket. Where they once may have cared about sports and sports fans, their recent efforts show that they have long-since turned their attention solely to the bottom line.”

Underdog confident it is operating legally

Levine also offered a little information about why Underdog Fantasy and other operators believe they are operating within the letter of the law. Citing the language of the Unlawful Internet Gambling Enforcement Act (UIGEA), Levine referenced the three elements the company believes are necessary to operate legally:

  1. A game based on skill;
  2. Use predictions on two or more athletes from different teams; and
  3. Have the outcomes based upon those athletes’ accumulated statistics in real- world contests.

“Every single one of our contests meets that simple definition. Fantasy sports is not limited to only FanDuel and DraftKings’ salary cap contests. The laws they wrote say fantasy sports is far broader than just salary cap,” he added.

While this is the letter of the law for UIGEA, whether or not these sites fall into the fantasy category in terms of state gambling laws seems to be where there is contention.

Levine did cite states such as North Carolina, Arizona, Indiana, and Alabama as states that have concluded the business is operating within the letter of the law.