After years of regulatory maneuvering and business adjustments, fantasy sports operator PrizePicks has officially re-entered the New York market. The key to this return was obtaining an interactive fantasy sports license issued by the New York State Gaming Commission and completely changing the operational model—from the previous "player versus house" to a "peer-to-peer" competition compliant with New York regulations. This shift stemmed from a 2023 ban and a subsequent settlement agreement amounting to approximately $14.97 million. New York State has now become the 16th jurisdiction in the US where it is authorized to operate, marking a decisive step for the company in adapting to complex state-level regulations. Executives state that the return demonstrates New York's acceptance of innovative gaming products and commits to providing a safe competitive environment for sports fans.
The challenging "Road to Return": From bans and settlements to licensing
The return of PrizePicks was not smooth sailing but a typical case of "regulatory correction":
Regulatory conflicts and exit: In 2023, the New York State Gaming Commission determined that the competitions PrizePicks offered from June 2019 to December 2023 were equivalent to unauthorized sports betting, leading to a cease and desist letter and the company's exit from the New York market.
Achieving settlement: To resolve the issue, PrizePicks reached a settlement with state regulators totaling approximately $14.97 million, based on the revenue generated during the non-compliance period.
Model transformation and licensing: After the settlement, the company adjusted its national operation strategy, fully shifted to a peer-to-peer model, and finally obtained a New York State license last October, paving the way for a legal return.
Company CEO Mike Ybarra stated: "New York has the nation's most enthusiastic sports fans, and we know they will be excited about PrizePicks' return." This process clearly demonstrates the importance of operators adjusting their business models to meet compliance requirements in strictly regulated markets.
How does the new "peer-to-peer" game model work?
In New York, PrizePicks' core gameplay is now "lineup versus lineup" leaderboard competitions, where players directly compete for real money prizes, no longer betting against the platform. The specific process is as follows:
Building lineups: Players pick 2 to 6 athletes from available sports and predict whether each athlete's actual data performance will be "higher" or "lower" than the preset values given by the platform.
Leaderboard competition: All players' lineups are ranked on a shared leaderboard based on the accuracy of their predictions.
Prize distribution: Prizes depend on the final ranking of the lineups on the leaderboard. The higher the ranking, the more the prize money. The system also has a minimum prize guarantee mechanism to ensure that eligible lineups receive earnings even in the event of a tie.
This model retains the competitive fun of fantasy sports while ensuring its legal status as a "game of skill," clearly distinguishing it from "proposition betting" gameplay. As the PASA official website analyzed in its report on US fantasy sports regulatory trends, the "peer-to-peer" structure has become a key design for operators seeking compliance in sensitive regulatory markets.
Industry background and new company developments
The compliant restart of PrizePicks in New York may provide a reference template for other operators facing similar bans. Meanwhile, the focus of industry regulation seems to be partly shifting towards prediction markets (such as Kalshi, Polymarket), providing a more stable development window for fantasy sports operators who have resolved historical compliance issues.
In addition to business model transformation, PrizePicks itself has also undergone significant changes:
Ownership change: European lottery giant Allwyn recently completed the acquisition of a 62.3% controlling stake in PrizePicks, with the transaction valued at approximately $1.5 billion, and includes performance-linked additional payment terms.
Business expansion: The company has ventured into event contract trading through a subsidiary registered with the US Commodity Futures Trading Commission and has established partnerships with prediction market platforms such as Kalshi and Polymarket.
Responsible gambling certification: In 2025, PrizePicks received iCAP certification from the National Council on Problem Gambling, becoming the first fantasy sports operator to receive this certification, highlighting its commitment to compliance and social responsibility.
In summary, PrizePicks' return to New York is not just a market comeback but a successful demonstration of compliance transformation. It proves that in the face of regulatory challenges, proactively adjusting business models, accepting penalties, and actively seeking compliance licenses are viable paths for digital game operators to achieve long-term development in the complex US state-level regulatory environment.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel: https://t.me/pasa_news
Original deep gambling channel: https://t.me/gamblingdeep
Free data reports: @pasa_research
PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
