Maine regulators fine Underdog $392K over pick’em contests

Lighthouse in Portland, ME
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Maine regulators have levied a $391,850 fine against Underdog Fantasy for alleged regulatory violations around its Pick’em contest product.

The Maine Gambling Control Unit (MGCU) Executive Director Milt Champion issued the report against Underdog on Oct. 30 after a lengthy back and forth with the operator.

Underdog now has 30 days to file a petition for an adjudicatory hearing with the Commissioner of the Department of Public Safety regarding the proposed fine. Based on comments, from Underdog, the company will be exercising the right to a hearing.

“This is just an initial step in the administrative process, and we now have the opportunity to be heard by the state in the coming weeks and look forward to receiving a final decision that ultimately agrees with our interpretation of Maine law,” an Underdog spokesperson told SBC Americas.

According to the report, the MGCU learned about the nature of contests offered by Underdog in late May and reached out to the operator in July with a formal complaint. Underdog provided information about their contests and the scope of their business in Maine throughout the fall.

Underdog offered the following insight regarding their Maine operations, particularly the pick’em contests that have been on offer since January 2021:

  • Accepted 482,771 contest entries with an average entry fee of $15
  • Net revenue from those contests of just over $1.4 million
  • Catered to 7,837 unique customers, 4,781 of which had won at least one contest

In the complaint, Champion cited regulations defining a fantasy contest and argued that they did not include fantasy vs. the house. He also noted that the scope of Underdog contests, as was depicted to MGCU by Underdog, allowed for entries based on the outcome of a single sporting event, which would be in violation of state regulations.

Accordingly, the $391,850,000 represents a $50 fine for each of the 7,837 unique customers in Maine who took part in the contests. The report concluded with a cease and desist for the company’s Pick’em contests in the state.

While a hearing appears to be on the horizon, in the meantime, it appears Underdog is currently not offering its Pick’em product in the state.

Maine is the latest in a list of states questioning the legality of pick ’em-style fantasy contests offered by companies like Underdog and PrizePicks. New York adopted new regulations earlier this month and Colorado will be discussing their regulations at a rule-making hearing next week to more clearly define what does and does not count as fantasy sports.