As DFS providers ‘pick-em’ style contests continue to attract criticism from sportsbook operators, Underdog has released a whitepaper on how and why their contests are legal.

The paper, written by General Counsel, Nicholas Green, outlines ten ‘key points’ in defense of the Pick’em fantasy contests offered. It begins with arguing “our Pick’em fantasy contests comply with the letter and spirit of state and federal law everywhere that we offer them” as well as adhering and obtaining fantasy licenses in each state that requires them.

The remaining key points include:

  • Laws protecting fantasy sports have never encompassed a “single format of contests”
  • Federal law expressly excludes daily fantasy products from the law prohibiting unlawful internet gambling
  • Underdog’s Pick-em fantasy contests fall under the definition of fantasy because they are:
    • Contests of skill,
    • In which patrons create rosters of multiple athletes from different teams,
    • Who play in real-world athletic contests, and
    • The winning outcomes are based on how all of the selected real-world athletes perform in the aggregate
  • As it satisfies the aforementioned definition, it can not be considered sports betting under the letter of the law. The paper argues that the “legal analysis begins and ends with the threshold question of whether the product is a fantasy sports contest”
  • The Pick’em fantasy games have been validated statistically as contests of skill by the same statistician, using the same methodology employed by DraftKings in litigation cases in both the states of New York and Texas
  • In 2015 similar cases were brought against DraftKings and FanDuel and were defeated. The paper argues that “fantasy sport patrons cannot mix-and-match player predictions with wagers on team or game statistics” which makes the games materially different from casino and sportsbook products
  • Optics have no legal standing
  • The paper argues that no state or federal law declares in “black and white” that fantasy sports are peer to peer whereas sports betting is against the house, as claimed by opponents to Pick’em contests
  • It argues that FanDuel and DraftKings pivoted to sportsbook and disregarded daily fantasy innovation, which Underdog has not

The lengthy paper delving deeper into all of the above facts concludes with another criticism of industry incumbents, stating “Underdog’s contests meet the letter and spirit of the laws defining fantasy sports, are contests of skill, and are not sports wagering – regardless of contrary arguments offered by industry incumbents who are motivated primarily by avoiding competition and have adopted legal positions to fit that interest.”

In August, Underdog CEO Jeremy Levine penned an open letter that was heavily critical of FanDuel and DraftKings. He placed heavy emphasis on the narrative portrayed by FanDuel and DraftKings was “disingenuous”, and also suggested irony given the “feels like sports betting” argument which was often at the center of legal contests they campaigned against for so long.