Underdog Exits New York, Gets Set To Open Up Shop In New Jersey And Delaware

One big door closes, two small doors open for Underdog Fantasy.

The company is leaving New York — and paying a $17.5 million fine to do so — but is entering New Jersey and Delaware with its Pick ‘Em Champions product.

The New York situation has been playing out behind the scenes for years, as Underdog holds a temporary fantasy license — as do DraftKings, FanDuel, and other DFS sites.

According to an Underdog press release, the New York State Gaming Commission has basically frozen in place the temporary licenses that were issued in 2015, holding operators to the specific games outlined on the license at the time it was issued.

Underdog, founded in 2020, acquired its temporary license by buying Synkt Games.

“It’s a unique, temporary license issue specific only to New York, and not related to any specific game format we offer,” said Nicholas Green, Underdog’s general counsel. “Any fantasy game created after 2015, no matter the format, is not permitted under the commission’s interpretation of what games a temporary permit holder, like Underdog, can and cannot offer. The high fine amount speaks to the popularity of our games, as the settlement was calculated based on our revenue in New York.” 

Underdog — as one might expect — disagrees with the interpretation of the law, but decided to settle the matter with the NYSGC for the $17.5 million and pull all its games out of New York.

So there’s a chance?

All is not lost, however, as the company is still eligible for a permanent fantasy sports license in the state, and it is currently under review.

“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.”

Meanwhile, the company — which already operates Best Ball in New Jersey — is now offering it’s Pick ‘Em Champions format to Garden State residents. As for Delaware, this will mark the company’s first foray into the Diamond State.

Underdog will launch the game — which is now available in 36 states — in both New Jersey and Delaware later this month.

“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 regulatory bodies of the product we built, which much of the industry has now replicated,” Green said.

Underdog isn’t the first DFS 2.0 company to leave New York; PrizePicks walked away from the state last February.

Underdog also operates a sportsbook in North Carolina, and has plans to be in Missouri as well once that state’s sports betting operation is up and running.