Underdog Fantasy, which hopes to launch a sportsbook in North Carolina, has removed a fantasy pick ’em contest from its Daily Fantasy Sports (DFS) app in North Carolina.
The decision comes less than two weeks before the March 11 launch of online sports betting in North Carolina.
Complicating the issue is that Underdog Sportsbook NC is seeking a sports betting operator license in North Carolina. The company may be erring on the side of caution. It awaits final approval for a license to offer full-fledged online sports betting. Underdog Sports will debut on March 11, pending final regulatory approval.
Daily Fantasy Sports operators masquerading as sportsbooks
Recent backlash against fantasy pick ’em contests in states where sports betting is not legal explains the decision. Also, some DFS operators have removed fantasy pick ’em contests in states with legal sportsbooks because they too closely resemble sports betting. DFS apps predate online sportsbooks by more than a decade.
Underdog was one of the fantasy operators asked to cease operations in New York, Florida, Arkansas and Kansas in February. Those states are uncomfortable with the nature of “pick ’em” contests that ask players to choose winners of sporting events similar to a prop bet on the game.
In a statement to its customers in North Carolina, Underdog announced that it would offer a free entry pick ’em contest in March.
North Carolina has a checkered history with DFS operators. When the NC Lottery Commission, which regulates sports betting, first examined the issue in 2023, they banned prop-style fantasy competitions. However, after a public hearing, they reversed their decision to better understand how other states would handle the issue.
The reversal allows regulators to look deeper at the DFS products offered. Despite the lift of the ban, Underdog is choosing to remove the pick ’em contests. These contests allow players to enter for a fee and choose winners or player “prop-like” bets in a contest format. However, winnings are withdrawn in a similar way to sportsbooks.
Why DFS contests are under scrutiny
At the heart of the problem with DFS real-money wager contests is how they are allegedly set up to mimic sportsbook apps and betting sites. The question arises whether a consumer can legally play “against the house.” Underdog and a few of its competitors have come under scrutiny for such contests.
New York fined PrizePicks $15 million for operating a for-money DFS product. That company has been under attack in other jurisdictions for its practices. PrizePicks operates in NC, and has not revealed plans to remove its pick ’em contest.
According to its website, Underdog DFS is legal in 33 states, including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin.
But that doesn’t mean it has been smooth sailing for Underdog or other DFS companies. Still, it is likely Underdog will debut its sportsbook in NC. In January, the company announced a partnership with McConnell Golf and Sedgefield Country Club to gain access to the market.
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