Arizona and Mississippi latest states to question fantasy pick’em games

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Mississippi and Arizona are the latest regulators to revisit what kinds of fantasy contests are offered in the state. The two states join a growing list of regulators scrutinizing fantasy vs. the house games offered by operators like Underdog and PrizePicks.

Mississippi offers additional clarity to fantasy operators

The Mississippi Gaming Commission confirmed Executive Director Jay McDaniel sent a letter to all fantasy operators in the state clarifying the rules.

In the letter, McDaniel wrote that the state does not allow fantasy contests vs. the house. Additionally, fantasy contests must consist of the accumulated statistics of multiple players instead of pitting one athlete’s performance against another athlete. Finally, “a contest must not be determined by one factor of an athlete’s performance.”

The letter cited existing regulations and did not introduce anything new or announce any plans to revise existing rules. PrizePicks and several other operators with pick’em games do not currently operate in the state, while Underog is a licensee and offers many contests, including pick’em games.

Mississippi legalized and began regulating fantasy sports in 2017.

Mississippi regulations define fantasy sports as follows:

Winning outcomes reflect the relative knowledge and skill of the players and are determined predominately by accumulated statistical results of the performance of individuals, including individual athletes in the case of actual sporting events; and

Winning outcomes are not based on the score, point spread, or any performance of any single actual sports team or combination of such teams or solely on any single performance of an individual athlete in any single actual sporting event.

Arizona regulator tells operators to cease offering pick’em

The Arizona Department of Gaming confirmed it also sent a guidance letter to all licensed fantasy operators in the state on Nov. 1. In that letter, Assistant Director of Compliance Andrea Milford said the department, “has become aware that certain fantasy sports contest operators in Arizona are offering wager types they call “flexible fantasy contests” or “pick ‘em fantasy” (referred to as the “disputed wagers”). This letter is intended to provide guidance on these disputed wagers.”

Milford offered very clear guidance that the department does not believe these games are compliant with regulations:

“The disputed wagers are not fantasy sports contests because a key piece of a fantasy sports contest is that participants create teams and compete against one another in simulated games. The disputed wagers involve no teams, no simulations, and no competition against other participants.”

Milford cited the regulatory definition of “fantasy sports contest”, however, this definition does not expressly state contests must involve more than one player nor does it explicitly state contests cannot be against the house. Here is part of the regulatory definition:

“Each winning outcome reflects the relative knowledge and skill of the fantasy sports contest players and is determined by the aggregated statistical results of the performance of multiple individual athletes or participants selected by the fantasy sports contest player to form the fantasy sports contest team, whose individual performances in the fantasy sports contest directly correspond with the actual performance of those athletes or participants in the athletic events in which those individual athletes or participants participated.”

Milford also referenced the sports betting statute and said these contests satisfy the state’s definition of a sports betting wager. Arizona’s legalized and regulated both sports betting and fantasy sports in 2021.

AZ regulators expressly approved Underdog’s pick’em games

While Milford’s letter said the department recently learned about these games, SBC Americas has obtained email communication with Underdog and a former ADG employee in which Underdog submitted its products Rivals and Pick’em for approval, and the ADG employee expressly approved the products for launch in 2022.

Other Arizona operators have also provided the regulator with information about the games they offered as part of the fantasy sports licensing process and have sought regulatory approval before rolling out new games.f

When asked about the email communication, ADG responded “We have no comment on past communication related to these wagers.”

Underdog Fantasy confirmed to SBC that it will remain operational in the two states for now.

“We will be working with the regulators in Arizona and Mississippi, as we do in all states where we operate, to address their concerns,” a spokesperson said.