Underdog and New York gaming commission settle, with $17.5M fee to be paid
Underdog Fantasy has agreed to pay $17.5M as part of a settlement fee, while also agreeing to cease operations in New York.
This comes after allegations were made by the New York State Gaming Commission (NYSGC) that suggested it was operating ‘unpermitted contests’ in the State.
Underdog Fantasy had a temporary permit held by the company it now owns named Synkt and asserts that it operated in New York since December 22, 2022 under a good-faith belief that it had the ability to do so lawfully. The brand offers an online daily fantasy sports website, along with a mobile app that was launched in 2020.
On March 14, a settlement was entered into with the fantasy sports provider having indicated “it will cease offering certain contest types in New York State unless permitted pursuant to New York State statutes and regulations.”
In a statement on the NYSGC website, the Commission Chair Brian O’Dwyer says: “This settlement is another example of the Gaming Commission looking out for the gaming public.
“We encourage fantasy sports players to play only through permitted or registered operators that are subject to our comprehensive regulations that protect New Yorkers.”
Underdog’s settlement fee to be paid over next three yearsThe huge $17.5M fee will be paid in 12 instalments, with the first 7.5% of the settlement amount being owed by April 1, 2025. The final payment will be required by January 1, 2028.
According to Next IO, Underdog’s general counsel, Nicholas Green, has clarified the issue wasn’t due to the nature of the games offered but stemmed from the temporary licence’s specific requirements and timing.
“It’s a unique, temporary licence issue specific only to New York, and not related to any specific game format we offer.
“Any fantasy game created after 2015, no matter the format, is not permitted under the commission’s interpretation of what games a temporary permitholder, like Underdog, can and cannot offer.”
“We disagree with the commission, but the settlement does provide clarity on New York licensing issues.
“The settlement recognises that Underdog worked in cooperation with the commission and operated at all times in a good faith interpretation of state law.”
Featured Image: Credit to Aaron Davis on Wikimedia Commons
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