General Update on Pick’em Contests

March 29, 2024  |  By Blake Hart

If you have fantasy sports news alerts set for any of your email accounts, then your inbox has likely been inundated with regular reports involving pick’em fantasy contests across the U.S. With a waning market for operations and the fate of pick’em contests hanging in regulators’ hands, we would like to provide a quick update on the evolving situation. If you are currently offering pick’em contests to consumers in the United States, or are generally interested in the matter, please take a few minutes to read through our breakdown below.

Regulated States With Longstanding Restrictions

Although many gaming media outlets closely monitor and report on regulator action with respect to fantasy pick’em contests, we rarely see mention of Ohio and Maryland, two states that have prohibited single player pick’em contests for years.

Ohio – Ohio was the first state to expressly preclude fantasy sports pick’em contests via regulation. More specifically, Ohio regulations prohibit fantasy operators from offering fantasy contests that have the effect of mimicking proposition selections. This has been a roadblock for pick’em contests since Ohio’s fantasy regulations went into effect in 2019. In recent years, Michigan and New York have adopted similar language to achieve the same result. Given the broad prohibition, it is unlikely but unclear whether Ohio would even permit multi-player pick’em contests in the state; currently there are none.

Maryland – In late 2021, Maryland became the second state to take a regulatory stance against single-player pick’em contests by way of emergency regulation which later became permanent. In Maryland, fantasy operators may only offer multi-participant fantasy contests in which participants compete against each other. Fantasy operators may not participate in their own contests. However, as the word emergency may indicate, Maryland’s immediate and urgent decision to put a stop to this game type only came after allowing single-player pick’em in the state for years. Maryland’s 2021 emergency regulations triggered a regulatory investigation into the game type and the ultimate exit of single-player pick’em contest operators there. It is unclear whether Maryland would permit multi-player pick’em contests in the state. Currently there are none.

New Bans In Regulated States

Over the last year, Michigan, New York, Colorado, and Arizona gaming regulatory authorities have adopted and begun to enforce fantasy contest regulations that prohibit some if not all pick’em fantasy contests in each state.

Michigan – In October of 2023, Michigan banned pick’em fantasy contests in the state by passing regulations that specifically prohibit fantasy contests having the effect of mimicking proposition selections. As such, Michigan is a clear no-go state when it comes to pick’em fantasy contests, and given the broad prohibition, it is unlikely that Michigan regulators would even consider allowing multi-player pick’em contests. Currently there are no real-money pick’em contests offered in Michigan, but some operators have begun offering free-play contests to maintain local engagement there.

New York – Like Michigan, New York effectively banned pick’em fantasy contests in October of 2023 with similarly prohibitive regulations. The New York fantasy contest regulations also expressly prohibit contests that have the effect of mimicking proposition betting. Therefore, New York is also a clear no-go state when it comes to real-money pick’em fantasy contests and it is unlikely regulators would even consider allowing multi-player pick’em contests under the 2023 regulations. Currently, there are no real-money pick’em contests offered in New York, but some operators have begun offering free-play contests to maintain local engagement there.

Colorado – After years of permitted single-player pick’em fantasy contests, Colorado regulators had a change of heart in late 2023. Coincidentally, the regulatory crack down came only a few short years after sports wagering went live in the state. Initially, Colorado regulators crafted and enforced an internal rule that allowed single-player pick’em fantasy contests as long as each participant’s contest submission involved fantasy-point based performance selections for at least four athletes. Notwithstanding previously issued permissions, in late 2023 Colorado regulators adopted rules prohibiting single-player pick’em fantasy contests. All pick’em fantasy contest operators ceased offering real-money contests in Colorado when those rules went into effect in January of 2024. That said, unlike Michigan and New York, Colorado appears to allow for certain multi-player pick’em fantasy contests, which Colorado regulators have confirmed. More specifically, Colorado regulators have told our office that pick’em fantasy contest operators may be eligible for licenses to offer multi-player pick’em contests in which (i) fantasy-points rather than single stats are used; (ii) fantasy points are accumulated for at least two athletes; and (iii) at least two athlete performances are considered with respect to each target score. We have not yet seen a license issued for this gameplay under the new regulations, and pick’em contest operators are continuing to push for a rule change to clarify this position. The issue is rumored to have been revisited by a Colorado Legislative Committee on March 21, 2024, however, unless and until something changes, Colorado is currently a clear no-go state when it comes to real-money single-player and single-stat based pick’em fantasy contests.

Arizona – In November of 2023, Arizona regulators asked single-player pick’em operators to cease all single-player pick’em fantasy contest operations in the state after years of licensed operations. Shortly thereafter, Arizona passed new fantasy contest rules prohibiting this game type that went into effect in early 2024. However, one pick’em fantasy contest operator has pivoted to multi-player contests in Arizona, and currently appears to be offering those contests there without issue.

States With Implied Prohibitions As A Result Of Regulator Interpretation

The vast majority of regulatory push back and pick’em fantasy contest operator exits have come as a result of regulator interpretation of current law or regulation, where gaming authorities have taken action against operators without passing new expressly prohibitive regulations.

Maine – In October of 2023, Maine gaming regulators sent out cease and desist letters to single-player pick’em fantasy contest operators despite issuing previous approvals. Currently, no pick’em fantasy contest operators offer multi-player contests in the state, and it is unclear whether Maine regulators would grant the necessary approvals to do so.

Virginia – In December of 2023, the Virginia attorney general issued an opinion that single-player pick’em contests were sports betting under state law. Virginia’s attorney general not only takes issue with the single-player nature of the contests, but also with the fact that outcomes are based on single performance metrics in a single real world event. As such, it is unlikely but unclear whether any multi-player pick’em fantasy contest will be approved in the state.

Mississippi – In October of 2023, after years of licensed operations, the Mississippi Gaming Commission sent cease and desist letters to numerous single-player pick’em fantasy contest operators, and those operators exited the state in February of 2024. At least one operator initially pivoted to peer-to-peer pick’em contests in Mississippi, but pulled the peer-to-peer version after a few months. We reached out to the Mississippi Gaming Commission shortly thereafter for clarity on whether peer-to-peer pick’em contests would be allowed in the state and the Mississippi Gaming Commission indicated that they would not.

Arkansas – In February of 2024, Arkansas regulators sent out cease and desist letters to single-player pick’em fantasy contest operators despite many years of operations in the state. Arkansas regulators have told our office that they do not distinguish between single-player and multi-player pick’em, and consider multi-player pick’em fantasy contests to be sports wagering under local law and regulation.

Unregulated Territories Are Also Getting Involved

West Virginia, Wyoming, Florida, and Kansas do not specifically require fantasy operator licenses or permits, but have nonetheless forced pick’em contests out. State action in these four jurisdictions make it clear that fantasy specific law and regulation is not a regulatory prerequisite to pulling the plug on pick’em.

West Virginia – West Virginia does not actively regulate fantasy sports under a standalone fantasy contest law, but local authorities nonetheless effectively forced pick’em fantasy contest operators out of the state. In 2022, single-player pick’em contest operators quietly left the unregulated state of West Virginia, but at least a few operators have since begun offering multi-player variations, so far without issue.

Wyoming – Similar to West Virginia, the absence of a concrete fantasy contest law did not stop Wyoming gaming regulators from forcing pick’em contest operators out with cease and desist letters in 2023. Wyoming regulators have told our office that they are unwilling to accept even multi-player pick’em contest variations as fantasy sports contests in the state. In Wyoming, regulatory authority for fantasy sports comes alongside sports betting authority, and for now, it seems that regulators are of the mind that anything that is not traditional fantasy or DFS constitutes sports betting, without exception.

Florida – Until recently, fantasy operators of all kinds operated in Florida for many years without regulation and without issue. Recently, however, that all changed when Florida regulators sent cease and desist letters to pick’em operators in September of 2023. Florida regulators demanded that pick’em fantasy contest operators cease local operations by early 2024, and those operators reportedly did just that around March 1st of this year. It is unclear whether Florida will allow multi-player pick’em fantasy contests, or will also consider those contests gambling under state law.

Kansas – In February of 2024, Kansas became the most recent unregulated state to send cease and desist letters to single-player pick’em fantasy contest operators. Pick’em operators have not yet begun to offer multi-player pick’em variations, and it is unclear whether local gaming regulators will allow them to do so.

Some Variation of Pick’Em Fantasy Contests Are Allowed In The Following Regulated States

Alabama, Tennessee, Massachusetts and Indiana each require fantasy operator licenses or registrations, and currently allow for some variation of pick’em contests locally.

Alabama – A few years back, Alabama introduced what is commonly known as “combo squares” to the world of fantasy sports, which has since kept local pick’em contests alive. To satisfy Alabama’s combo square requirement, operators must require at least two athletes accumulate fantasy points in an effort to reach the same target—similar to Colorado’s new rules. For example, Lebron James and Damian Lillard would need to score 50 cumulative fantasy points, but a participant could not enter a submission requiring Lebron James reach the target alone. Therefore, Lillard could get benched for the second half of the game after scoring 18 points, but the participant would still hit the identified target as long as Lebron scores more than 32 points in the game. Contests of this variety continue to be offered in Alabama, but pick’em fantasy contest operators have begun to offer multi-player pick’em fantasy contest variations in Alabama as well.

Tennessee – Tennessee was one of the first states to refuse licensure to operators of single-player pick’em fantasy contests, but it was similarly first in line to expressly authorize multi-player pick’em fantasy contest variations in 2024.

Massachusetts – Notwithstanding years of registered operations, ten single-player pick’em fantasy contest operators received cease and desist letters from the Massachusetts attorney general in late February of 2024. Shortly thereafter, multiple pick’em fantasy contest operators began to offer multi-player peer-to-peer pick’em contests in the state, and continue to do so without issue.

Indiana – Indiana appears to be the last man standing when it comes to regulated states allowing single-player pick’em fantasy contests. Licensed fantasy contest operators appear to be offering pick’em with no issue, notwithstanding the nationwide chaos. Indiana has remained silent on the matter.

As a reminder, the fantasy sports sect of gaming is governed by a rapidly evolving body of law, which varies greatly across the United States. The introduction of sports wagering laws and regulations have only intensified the complexity in this area. Many of the states mentioned above have legalized sports wagering in recent years. We are here to help as you enter new territory, or if you have questions regarding new or existing laws in the jurisdictions in which you currently operate.

Please feel free to reach out to your Vela Wood attorney contact to discuss further.

About the Author(s)

Blake Hart

Blake is a senior attorney at Vela Wood. She focuses her practice on contract drafting, review, and negotiation on behalf of sports and entertainment individuals and enterprises.

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