Report: PrizePicks Agrees to Pay $15 Million in New York, Will Cease Paid Contests

PrizePicks will reportedly cease paid contests in New York and pay the state's gaming commission $15 million in a settlement for operating without a license.

According to a report from ESPN, the New York State Gaming Commission found PrizePicks to have violated state gaming laws for several years. The agreement states that PrizePicks has operated in New York since June 2019 and was not authorized to offer interactive fantasy sports (IFS) in the state.

PrizePicks is set to pay $15 million "based on the revenue PrizePicks generated through purported IFS contests from New York contestants" throughout the four-and-a-half years the daily fantasy sports operator operated in New York.

Although PrizePicks is ceasing paid contests in New York, the company isn't disqualified from obtaining a new license. According to ESPN, the company plans on obtaining a license to offer its peer-to-peer product in New York.

"Our team is pleased to have reached a resolution with the Gaming Commission and we look forward to continuing our work with the state to modernize New York's daily fantasy sports laws," the spokesperson said in a statement to ESPN. "As safer, skill-based DFS contests like ours rise in popularity, we will work constructively with policymakers on thoughtful legislation that allows New Yorkers to play the contests they love, ensure strong consumer safeguards and generate tax revenue for the state."

New York had previously banned pick 'em style contests from daily fantasy operators such as PrizePicks, Underdog and Sleeper. New York ruled they are too similar to traditional sports betting and would need the proper license.

PrizePicks and other companies with similar daily fantasy classifications have been under fire with multiple sports gaming commissions due to the similarities with traditional sports betting.