Underdog Fantasy is officially withdrawing from the New York market after reaching an agreement with the New York State Gaming Commission (NYSGC) that includes an $18 million settlement. While exiting the state, the company is simultaneously expanding its peer-to-peer Champions Pick’em product into New Jersey and Delaware.
Underdog initially entered the New York market in July 2020, operating without a license until acquiring Synkt Games in December 2022.
This acquisition allowed the company to assume Synkt’s temporary license, one of several issued by the state since 2016. However, the NYSGC determined that Underdog had been offering contests outside the scope of Synkt’s original licensing terms.
According to the settlement, the violation stemmed from discrepancies between the contests Underdog provided and those permitted under Synkt’s license, rather than from any regulatory infractions related to the nature of the games themselves. Additionally, the settlement required Underdog to cover back taxes owed by Synkt on its fantasy earnings.
Despite its withdrawal from New York, Underdog remains eligible to apply for a permanent fantasy or gaming license in the state. General Counsel Nicholas Green noted that the company maintains an active application for a permanent fantasy license and hopes to resume operations in the future.
“For nearly a decade, fantasy sports in New York has operated in regulatory uncertainty, including licensing delays limiting consumers’ choices to only a couple of legacy operators,” Green said. “We disagree with the Commission, but the settlement does provide clarity on New York licensing issues.”
“The settlement recognizes that Underdog worked in cooperation with the Commission and operated at all times in a good faith interpretation of state law. We look forward to offering all of our contests again to New Yorkers, and we are working with the Commission to do so as soon as possible.”
New York’s approach to fantasy sports regulation has been marked by delays and legal challenges. While the state passed legislation in 2016 to legalize and regulate daily fantasy sports, a prolonged court battle postponed regulatory action until 2021.
A set of finalized regulations, including restrictions on contests resembling proposition betting, was only adopted in June 2024. The licensing process for permanent fantasy operators is now underway.
Underdog’s exit follows a similar move by PrizePicks, which ceased real-money operations in New York in February 2024 and agreed to a $15 million settlement with the NYSGC. Unlike Underdog, PrizePicks never obtained a temporary license in the state.
Meanwhile, State Sen. Joseph Addabbo has reintroduced legislation that would broaden the definition of fantasy sports to include additional game formats, though the bill has yet to progress beyond the Finance Committee.
As it steps away from New York, Underdog is expanding its presence in New Jersey and Delaware with the rollout of Pick’em Champions. The product is launching in Delaware for the first time and marks a return to New Jersey, where Underdog previously operated but had not yet introduced its Pick’em contests.
“New Jersey and Delaware have been at the forefront of modern sports gaming regulation, and bringing our Pick‘em Champions game to those states is yet another endorsement from highly respected gaming regulatory bodies of the product we built, which much of the industry has now replicated,” Green added.
Original article: https://www.yogonet.com/international/news/2025/03/18/98483-underdog-exits-new-york-after-settling-with-gaming-commission-expands-to-new-states
