New York Welcomes Back Fantasy Sports Operator

New York sports betting has been an absolutely killer business for everyone involved.

The state, of course, is winning big. New York has quickly ascended to becoming the biggest legal sports betting market. It’s also the most lucrative for state politicians, who tax the whole thing at a hefty 51 percent rate (highest in the whole country).

Top betting apps, meanwhile, are cruising to record betting tolls every year. Yes, the taxes eat into their margins, but it still works out to a highly profitable business for the likes of FanDuel, DraftKings, and Fanatics, among others.

But with all this success also comes restrictions, namely on the state’s side. They don’t want just anyone getting a piece of the pie — not without getting a proper license at least. That’s why they banned PrizePicks a year ago. But… that ban has now been rescinded after a blockbuster settlement (and rules changes). Keep reading and we’ll tell you what’s going on in the Empire State.

Why PrizePicks Got The Boot

Let’s go back to February 2024, right after the Super Bowl between the Chiefs and 49ers. That’s when New York cracked the whip on PrizePicks, and ended its operation.

Why? For illegally operating, state regulators said. You see, from 2019 through 2023, PrizePicks worked perfectly fine in the state. Its popular pick’em contests let players go head-to-head against the “house,” choosing whether athletes would go over or under certain stats. The issue is PrizePicks acted as a fantasy sports site, but that type of wager, well, that’s effectively prop betting.

In 2023, New York Gaming Commission formally banned pick’em-style fantasy games that pit players against the operator. They contended that these weren’t contests of skill but wagers — and that made them unlicensed sports bets.

PrizePicks kept operating a few months post-decision, but New York wasn’t having it. PrizePicks then shut down its paid games in New York as part of the deal and agreed to work with regulators to build something compliant. Obviously, being shut out of the lucrative market wasn’t good, but PrizePick did what it said it was going to do: figure out compliance. And that’s what they’ve done.

How PrizePicks Made Its Way Back

Earlier this month, it was announced PrizePicks is officially back in New York. The state’s gaming commission approved the operator for a new interactive fantasy sports license. But this isn’t the same PrizePicks that left. The company completely overhauled its game model to fit New York’s tighter rules.

The new version runs under what PrizePicks calls the “Arena” — a peer-to-peer format where players compete against each other instead of the house. Prizes now come from pooled entry fees, not fixed payouts from the company itself. That small but crucial change made all the difference with regulators, who deemed the new system compliant with fantasy sports law instead of sports betting.

“We worked diligently to design a game that meets the Commission’s rigorous standards, and New York’s decision underscores the idea that innovation in fantasy sports can thrive within a clear regulatory framework,” said Jason Barclay, head of public policy and chief legal officer at PrizePicks.

Not only that, but PrizePicks agreed on a settlement with New York regulators (there’s always a settlement, ain’t there?). Get this, they agreed to pay a whopping $14.97 million settlement. It wasn’t just a random number, though. Per the announcement, this covered the money they made during those years when they operated stateside without a proper license.

The comeback gives the state’s daily fantasy industry a shot in the arm. Rival platforms like Underdog have made similar adjustments, and now customers have a second option in PrizePicks. Nationally, these two companies have gone neck to neck, and New York will likely be its biggest battle state per se.

PrizePicks Not Done With One License

PrizePicks ain’t stopping with New York. The company’s been quietly gearing up for a breakout year. They’re now live or approved in 16 jurisdictions and plan to use that footprint to grow fast in 2025.

That reach is about to explode even further thanks to a massive deal with European lottery powerhouse Allwyn. PrizePicks just sold a 62 percent stake for $1.6 billion in cash, with up to another billion on the table if performance targets are hit. That gives the company a potential $4 billion valuation.

With that backing, PrizePicks is positioning itself to move beyond fantasy sports altogether. They’ve already hinted at expanding into sports prediction markets. The new industry is all the rage right now, and PrizePicks wants to compete with the likes of Kalshi and Polymarket.

So New York might’ve been a comeback story, but it’s also a launchpad. The settlement closed one chapter, but the Allwyn deal opens another — one where PrizePicks becomes a legitimate global gaming player. They’ve got scale, cash flow, and momentum on their side, and for the first time in years, it feels like the wind’s at their back instead of in their face.