Step into my time machine, won’t you?
You’ll get your money’s worth on this trip. We’re going all the way back to … 2023. Late 2023 and a little bit of early 2024, to be exact — when the scrutiny facing against-the-house DFS pick ‘em contests reached its peak.
These contests — where players predict whether athletes would perform above or below certain predetermined stats — too closely resembled props in sports betting, argued regulators, attorneys general, and lawmakers across the country.
Arkansas, Florida, Kansas, Arizona, and Mississippi all sent cease-and-desist to DFS operators who offered these types of pick ‘em contests, including PrizePicks, Underdog Fantasy, and Betr.
New York changed its state law to ban pick ‘em contests, which forced PrizePicks to pull those offerings in the Big Apple and pay a $15 million fine. Michigan made the same types of changes to its state law.
Other states — including Maine, Missouri, North Carolina, and Colorado — also took some form of action preventing or limiting the scope of pick ‘em contests in their states, severely hampering what operators like PrizePicks could offer within state lines.
Just about every week, it felt like a new state joined the crusade against pick ‘em.
As a result, the pick ‘em market shrunk as it sat fully exposed (and practically alone) under the gambling industry’s microscope.
History is repeating itself in gambling’s ever-evolving ecosystem
Sound familiar?
We’re seeing history repeat itself with online sweepstakes casinos right now. Cease-and-desist letters. Changes in state law. Regulators and attorneys general getting involved. Opposing statements being heaved back and forth.
In a development that proves just how quickly and profoundly things can change in this industry, the Chumba Casinos and McLucks of the world have replaced the DFS pick ‘em operators under the microscope of scrutiny. (Lottery couriers, too, to a lesser degree.)
So much so, that the most prominent sports betting brand just joined the pick ‘em space.
In late April, industry analyst Dustin Gouker broke the news that FanDuel was launching FanDuel Picks, a peer-to-peer DFS pick ‘em product where players compete against other players by picking whether a group of 3-6 players will get “more” or “less” than a certain statistical benchmark.
It’s the same prop-style structure that fell under such intense inspection in 2023 and 2024, but it’s a peer vs. peer contest — not an against-the-house contest, where players compete against the operator in, some argued, nearly the same fashion they would against sportsbooks.
Gouker highlighted that difference when discussing the topic with Sweepsy, but he also noted the atmosphere is better now for FanDuel to launch its pick ’em product than it was two years ago.
“In the macro, yes, there seems to be less regulatory concern about DFS and the focus on other things arguably makes it easier for them to launch,” Gouker, the author of The Closing Line newsletter, told Sweepsy. “The product was likely in development for a while. I am not sure I would chalk the launch up to sweeps taking up more oxygen, but it doesn’t hurt.”
Picture FanDuel Picks launching in 2023 …
Let’s get hypothetical for a second.
Let’s say FanDuel Picks was ready to go live in October 2023, the same month New York and Michigan effectively outlawed against-the-house pick ‘em contests and Maine ordered Underdog Fantasy to stop offering such contests (and handed it a $400,000 fine).
There would have been no reality in which FanDuel executives would have green-lit the launch. Even if, yes, the peer-to-peer aspect of their pick ‘em contests was a key distinction from the contests being banned in several states. The climate was simply too toxic.
And let’s be real: The percentage of people who will immediately understand the nuances of the different styles of pick ‘em contests is quite small. Most — including most lawmakers — would have simply heard or read the phrase “pick ‘em” and automatically associated the FanDuel product with what PrizePicks, UnderDog Fantasy, Betr, and more were getting in trouble for.
But, again, not today.
In less than two years, the pick ‘em product isn’t stained anymore. It doesn’t have the same level of baggage, in large part because the sweeps industry is now saddled with that baggage.
How and why this matters for sweeps gaming
This is also good news for sweeps operators. No, that’s not sarcasm.
It’s good news because it shows the ever-evolving nature of the gambling industry — where the hot debate today will be forgotten and replaced by something new in due time. We can’t know what it will be. (Do you think, in late 2023, people would have guessed “Sweeps Coins” would be more of a buzz word than “prop-style”?) But we do know it will be something.
The question, then, is how much will the sweeps industry be affected before the spotlight shifts?
Of the flurry of states to consider bills that would ban sweeps gaming this legislative session, only Montana has passed one. Bills failed in Arkansas, Maryland, and Mississippi. Florida’s deadline passed before its two bills moved anywhere.
A bill in Illinois is stuck in committee.
Things are moving along, though, with bills in Connecticut, Nevada, Louisiana, New York, and New Jersey (where Assembly Bill 5447 has its first hearing Thursday).
Outside of legislation, several states — including Michigan, Maryland, and Delaware — have issued cease-and-desist letters to sweeps operators, and many operators have pulled out of all states with regulated real-money iGaming markets.
