Arkansas Sports Betting Regulators Sent Cease and Desist Letters to Daily Fantasy Sports Sites

The Arkansas sports betting market no longer allows daily fantasy sports sites to offer their wildly popular pick ‘em games.

Stop us if you’ve heard this story before. On second thought, maybe don’t. Because we know you (probably) have heard this one before. All across the USA, states are cracking down on daily fantasy sports pick ‘em contests. These competitions, they argue, are not “fantasy” because results get judged off real-life player stat lines. And because these transactions effectively feature a player wagering against the house instead of another peer, the contests too closely mirror the gambling services offered by online sportsbooks in the United States.

Initially, this seemed as if it would only be an issue in regions without legal sports gambling. However, online sports betting in Arkansas launched roughly two years ago. And because almost 40 states have legalized sports betting in some form, they actually make up the majority of who’s going after daily fantasy sports (DFS) sites.

With that said, the status of DFS in Arkansas differs from other states. Their decision to crack down on daily fantasy sports providers doesn’t solely boil down to pick ‘em games. Instead, they have reportedly targeted the United States daily fantasy sports industry at large.

Daily Fantasy Sports Sites Officially Ousted from Arkansas Sports Betting Market

According to Legal Sports Report’s Sam McQuillan, Arkansas sports betting regulators didn’t just ask DFS sites like PrizePicks and Underdog Fantasy to halt pick ‘em games. They have pushed them to leave the state entirely. As McQuillan wrote:

“Arkansas is the latest of a growing number of states to crack down on daily fantasy sports pick’em games popularized by PrizePicks and Underdog Fantasy. Arkansas sports betting regulators sent PrizePicks and Underdog cease and desist letters on Thursday. In a press release, it described both companies’ pick’em games as sports betting, not DFS. ‘Daily Fantasy Sports operators offer a version of the traditional fantasy football concept, with a consumer creating a team and points being assigned based on performance. The consumer creating the best performing team is rewarded. In the last year, these operators have offered a product associated with sports betting: ‘player prop bets,’ the Arkansas Department of Finance and Administration said.”

This stance from Arkansas sports betting regulators is identical to the interpretations made by other states. In fact, the Bear State actually sent out DFS cease and desist orders on the same day regulators for sports betting in Florida delivered their own exit orders. All daily fantasy sports sites in Florida have since left the market, despite communicating a willingness to collaborate with state officials on a path forward.

To that end, with so many states either shuddering DFS sites’ most popular game or having them leave markets altogether, an interesting question arises…

Is There a Future for Daily Fantasy Sports in Arkansas—and Elsewhere?

The short answer: It depends. The longer answer is complicated. And it likely won’t come as good news to daily fantasy sports players in Arkansas. 

Thus far, it doesn’t seem like there’s a compromise to be made among Arkansas sports betting officials and daily fantasy providers. For starters, if the state was willing to negotiate and collaborate, they probably wouldn’t have issued full-on cease and desist orders. More to the point, though, other states have brokered exceptions and changes for DFS, only to end up where Arkansas is now.

The Colorado sports betting and Massachusetts sports betting markets offer perhaps the best examples. Massachusetts put specific daily fantasy sports laws in place that operators believed they were following. But the Bay State has since staged their own crackdown on pick ‘em contests.

Colorado, meanwhile, took it one step further. They grappled with the pick ‘em issue early in 2023, long before most states started reconciling them. The Centennial State’s solution, at the time, involved mandating changes to the pick ‘em system. Participants wouldn’t “invest” in over/unders on a player’s actual stat lines; they would instead “invest” in the over/under on the number of fantasy points those state lines accumulated.

Though this compromise appeared to work for some time, Colorado just recently set out to ban DFS pick ‘em games. And relative to the issue at hand, this makes sense. The adjusted scoring system didn’t actually change the nature of pick ‘em contests. It simply tweaked the way results were being communicated.

Are Daily Fantasy Sports in for a Reckoning Beyond Just Arkansas?

The obvious answer here is “yes.” Other states have already taken action against DFS, so this isn’t just about the Arkansas sports betting market. 

However, the Bear State’s blanketed stance on the matter does speak to a larger issue. It isn’t just one state refusing to—or struggling to—slot DFS games separate from the sports betting umbrella. It is nearly every state. And while daily fantasy sports sites have other games to offer, these pick ‘em competitions have become primary revenue drivers. What happens, then, to the DFS industry when their most popular contests are verging on obsoletion?

We don’t have the answer. Frankly, as of now, nobody does. This could soon become a crisis of identity, of survival, for DFS operators. 

Some places, of course, will be fine. Sites like DraftKings and FanDuel have sportsbook licenses to pair with their fantasy games and are also operational in the Arkansas sports betting market. But what about the rest? Could we see PrizePicks and Underdog Fantasy, along with others, start competing for sports betting licenses in the future? Or is that too expensive for them? Or is it a matter of not being able to carve out a large enough sports betting market share in Arkansas and other states when veteran bookmakers like DraftKings, FanDuel, BetMGM, Caesars, etc. run the table?

Once more, we don’t have concrete answers. This is new, still-developing territory for all involved. But it does seem safe to say that daily fantasy sports betting in Arkansas as well as the rest of the USA will never be the same.

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