A lawyer representing a small daily fantasy sports operator took a swipe at a much larger competitor during a Colorado Department of Revenue “rule-making hearing” this week.
Attorney Josh Kirschner, representing PrizePicks, called out FanDuel in reference to a report that the company pressured regulators in Wyoming to restrict products from PrizePicks and another small Colorado daily fantasy sports operator.
“As we’ve recently learned in an LSR [Legal Sports Report] article on Wyoming, FanDuel might not necessarily concern itself with what the rules are since they seem to get their way no matter what.”
Regulators considering changes to DFS rules in CO
The purpose of the hearing was to provide information to the Colorado Division of Gaming as it considers adding language to better define daily fantasy sports in state regulations.
During the hearing, Andrew Winchell, director of regulatory affairs for FanDuel, expressed concerns that proposed changes in Colorado could make DFS rules even more murky. FanDuel seeks more clarity on DFS rules in order to reign in companies like PrizePicks.
The state could possibly prohibit “fantasy vs. the house” contests, Winchell said. That could leave the door open to banning all DFS games.
“Is this interpreted to mean that all single-player fantasy contests against the operator are prohibited? Or only a specific subdivision of contests or specific types of contests that are played against the fantasy contest provider are being prohibited?”
Kirschner countered that Colorado regulators could be unlawfully applying regulations that would penalize companies like the one he represents.
“It appears to look as if the rule-making process looked at [the sports betting law] for sports wagering and tried to draw a fence around that instead of applying proper administrative procedure and making rules pursuant to the statute.”
The statute refers to confusing rules enacted when DFS was approved in Colorado in 2016.
What is a ‘daily fantasy sports contest’ in Colorado?
Colorado is grappling with defining DFS and sports betting, much to the frustration of operators like PrizePicks. They specialize in offering DFS contests, but they do not have sports betting apps, like FanDuel, DraftKings and others have.
By law, a fantasy contest in Colorado is one where:
- The value of the prizes is explained up front to consumers.
- The result of the contest is based on the “relative knowledge and skill of the participants.”
- The result is determined “predominantly” by accumulated statistical results from the performance of athletes in sporting events that have been completed.
This means DFS must provide contests with set prize amounts and offer the prizes based on athlete results from things such as goals scored, yards receiving, rushing or passing, etc.
It cannot be determined by the outcome of a sporting event (which team wins and loses) or a point spread or moneyline.
FanDuel accuses some DFS operators of breaking rules
FanDuel argues that some DFS operators like PrizePicks are offering products that look very much like betting lines from sportsbooks. If it was found that they do, such activity could be banned, so smaller DFS operators would have difficulty competing.
Kirschner sees any proposed changes to DFS contest guidelines to be a changing of the rules after the fact.
“The question becomes for a current licensee offering games that were previously in line and licensed by the division, but might not fit into these new rules, what procedural due process will be afforded to those folks?
“What will they be allowed to offer contests until their current license expired? Will there be some sort of hearing and review period? Will there be some sort of cooperative process?”
The Colorado Division of Gaming will next convene on Nov. 16. It will accept comments from the public on this issue until then. No scheduled vote on proposed changes to DFS contest rules has been announced.
