Writing Is on the Wall for Colorado Fantasy Pick ‘Em Contests

The rules for Colorado Fantasy sports betting providers are still a work in progress. But after a meeting of the Colorado Division of Gaming Monday, it looks as though pick 'em contests that Fantasy sports operators provide in the state are in serious danger.

The lines between providers and Fantasy operators across the country continue to be blurred. Regulators in a number of jurisdictions are starting to take aim at such Fantasy pick 'em contests which allow users play against the house at the best sports betting apps, rather than other players.

It appears as though Colorado regulators are on the cusp of following a few other legal sports betting states around the country in the banning of such user vs. Fantasy provider pick 'em contests.

The Fantasy/sports betting provider conundrum

With the explosion of legal sports betting across America has come the rise of other sports-type companies looking to seize on the popularity of the industry. Fantasy gaming has its own incredible following with millions of loyal customers taking part in weekly and daily fantasy gaming opportunities.

The question remains just where is the line between regulated legal sports betting companies, which by law allow bettors to place wagers against the house, and Fantasy operators, which by definition has players playing against other players?

Fantasy operators in Colorado currently offer pick ’em contests, including single and multi-player. But for how long?

Regulators in Michigan and New York have already voted to ban some pick’ em style games offered by their state’s Fantasy providers. Both states have ruled that Fantasy operators have been offering sports betting opportunities on their sites, while not being mandated to following the same rules, the same licensing fees, and taxation that regulated, legal, licensed sports betting providers in their state are subjected to.

The Monday hearing

On Monday, the Colorado Division of Gaming attempted to clarify rules and regulations surrounding their Fantasy gaming platform.

The most notable change that came out of Monday's hearing was a change in wording or the rules surrounding just what DFS providers can and cannot offer their users in the Rocky Mountain State. The rules changed from banning "parlay style wagers that are stacked wagers on single athletes," to not allowing Fantasy providers wagering opportunities "where patrons compete against fantasy contest providers."

It is a subtle (and some argue confusing) change that takes direct aim at Fantasy providers and just what they will be able to offer their users in Colorado going forward.

Understandable pushback

The Monday hearing may have created more questions than answers. There was palpable confusion and disappointment during and after the meeting, particularly from DFS providers that will be negatively affected by the new rules proposal.

PrizePicks lawyer Josh Kirschner perhaps summed that disappointment up best when he commented: “What's more, I would lament, candidly, this division going from one of the most progressive in the nation in terms of what it allowed and recognized as fantasy sports to one of the most restrictive regimes in the nation who have now codified a version of fantasy sports that seems to stop recognition at and around 2016.”

Big guns stand to benefit

The biggest winner in Michigan, New York, and potentially Colorado are the best sportsbooks operating in their respective states. DraftKings and FanDuel, which were once strictly a daily Fantasy operator, and still offer Fantasy services will benefit from current DFS providers' inability to offer any betting opportunity against the house.

Smaller, DFS-focused providers like PrizePicks and Underdog, which have gained licenses in three states but have yet to launch, will be behind the betting curve right from the outset.

There is common belief from the affected DFS providers that FanDuel and DraftKings are behind the effort to limit the pick 'em prowess of such operators as PrizePicks and Underdog in not only legal sports betting states, but also jurisdictions that have not yet legalized their own retail and mobile sports wagering platform.

In the end

It is not the last that we have heard on the DFS/pick 'em controversy around the country. The public comment period in Colorado will run through Nov. 3 before a possible pick ‘em ban for DFS-only providers goes into effect.

But as of now, it certainly appears that Colorado sports betting will indeed adopt similar restrictions to DFS provider parlay and pick' em contests after precedence was set in New York and Michigan earlier this year.