Underdog Fantasy ordered to cease Maine pick’em operations over illegality concerns
DFS operator fined $391,850 by Maine Gambling Control Unit for offering alleged illegal games in latest setback for under fire sector
The Maine Gambling Control Unit (MGCU) has ordered Underdog Fantasy to “immediately cease” offering pick’em-style DFS contests in the Pine Tree State over alleged illegal sports betting.
The order follows an MGCU investigation into Underdog over concerns about the vertical, which has become an increasingly controversial subject in US gambling circles during recent months.
In May, MGCU executive director Milton Champion sent a notice of complaint to Underdog, citing possible violations of Maine’s sports betting laws.
The MGCU then commenced an investigation into the operator, giving Underdog 30 days to respond, which it did after an extension was granted on September 11, with the operator defending its position.
A subsequent MGCU request for information revealed that 482,771 pick’em wagers were placed by 7,165 Maine-based contest participants, with an average wager size of $15 and generating proceeds of $1.4m.
Further information provided by Underdog revealed that pick’em contests have been offered in the state since January 2021, with the site playing host to 7,837 unique users, of which 4,781 have had at least one winning wager.
Maine fantasy contest laws prohibit any form of DFS contest where the player plays against the house rather than fellow participants, with all contests required to involve more than one player.
At all times, the contests are to be based on the skill of the participants involved and not on the performance of a team or player.
Licensed operators in the state are required to have plans in place to actively prevent contests being offered based on the score, point spread, or performance of a single actual sports team or combination of such teams, or solely on a single performance of an individual athlete or participant in a single actual sports event.
Deeming the operator to be in breach of these laws, MGCU executive director Milton Champion last week issued a fine of $391,850 to Underdog Fantasy, with that fine based on a rate of $50 for each of the 7,837 individual contestants participating in the pick’em contests.
“Pursuant to the legal prohibitions stated in paragraphs 17-18, Underdog shall immediately cease offering pick’em contests to Maine consumers. Failure to comply with this directive shall be grounds for further sanctions,” Champion wrote in a six-page written decision document.
Underdog now has 30 days to pay the fine or potentially launch an appeal against the ruling, with any appeal being heard by the Maine Commissioner of the Department of Public Safety.
Beginning earlier this year, several US states have introduced prohibitions or severe restrictions on pick’em-style fantasy contests over concerns that they are sports betting in all but name, and therefore illegal and unlicensed.
Regulators in Wyoming, Massachusetts, Colorado, Michigan, New York, Florida, and soon-to-launch North Carolina, have all barred the vertical or introduced proposals to do so.
Underdog and fellow pick’em/DFS operators PrizePicks and Sleeper have been ordered to cease operations in Florida and Wyoming, having already exited several other markets where prohibitions have been introduced.’
Underdog Fantasy’s founder and CEO Jeremy Levine has passionately defended the right of DFS operators to offer pick’em-style contests, asserting that heritage DFS operators FanDuel and DraftKings are using regulatory influence to push them out of the market.
Read more about the furore surrounding pick’em in EGR North America’s feature on the vertical here.
A spokesperson for Underdog Fantasy confirmed to EGR that the firm no longer offers pick’em style DFS contests in the state.
“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,” the spokesperson for Underdog added.