Colorado Sports Betting May Ban Daily Fantasy

Daily Fantasy Sports operators in the United States continue to see their Pick ‘Em games get banned amid a crackdown on the interpretation of “fantasy sports.” States like New York, Massachusetts, Florida and many others have already taken aim at or forced out active daily fantasy sports (DFS) sites. Now, Colorado sports betting regulators could join the growing throng.

PrizePicks, a popular United States daily fantasy site, recently alerted their customers that a vote would be taking place in March 2024 that essentially determines the fate of DFS in Colorado. The note took some by surprise. Indeed, daily fantasy sites like PrizePicks, Underdog Fantasy and more have received flack for offering game-types that seem awfully similar to the wagers accepted by full-fledged online sportsbooks in the United States. Heck, even DraftKings and FanDuel, which operate the most popular sportsbooks in the USA, have seen the DFS arms of their businesses get shut down in certain markets.

Even so, regulators of sports betting in Colorado didn’t initially seem focused on the daily fantasy sports issue sweeping across the United States. Perhaps that’s because they took steps to address it in 2023. Or maybe they’re just piggybacking off concerns shown from near-countless other states.

At any rate, DFS Pick ‘Em games in Colorado are officially in danger of a state-wide ban. But is this a matter of if or when?

Daily Fantasy Sites Await Result of Vote on Their Place within the Colorado Sports Betting Market

While the vote on daily fantasy sports in Colorado was scheduled to take place at the end of March, the official results have yet to be made public. And so, DFS operators and customers remain in a state of wait.

Here’s Sam McQuillan of Legal Sports Report with more details on what’s going on:

“Colorado could be the next state to ban player vs. house pick’em fantasy sports games, PrizePicks warned customers this week. On March 21, the Legislative Committee on Legal Services will vote on the future of pick’em daily fantasy sports and whether those games should be subject to Colorado sports betting rules and regulations, according to emails PrizePicks sent to users in the state. It comes after the Colorado Division of Gaming issued rules outlawing player vs. house fantasy games in January, clarifying that they must be peer-to-peer. Those rules ‘abruptly halted’ PrizePicks’ ability to offer its most popular games, it said in the email urging customers to contact their lawmakers.”

This is familiar territory for PrizePicks and other DFS operators. In other instances, more forceful action has been taken against them. Last month, for instance, daily fantasy sports sites in Kansas were ordered to shudder operations.

Though we don’t yet have the official results, the most recent developments suggest daily fantasy sports sites in Colorado are about to undergo a facelift. Games of chance involving real players seem almost certain to fall under the criteria for Colorado sports betting laws.

Sure, this is in part because similar verdicts have become a growing trend. But while Colorado sports betting officials may have waited longer to take action against Pick ‘Em competitions, these games have been on their radar for a while.

Daily Fantasy Sports Operations in Colorado Were Already Put Under the Microscope in 2023

Last year, amid concerns that Pick ‘Em games overlapped too much with flat-out Colorado sports betting, regulators changed how they were offered. In concert with DFS sites like Underdog and PrizePicks, officials sought to increase the amount of skill needed to partake in these competitions. They believed certain tweaks would further differentiate daily fantasy sports games from Colorado sports betting wagers.

Among the biggest adjustments made was requiring daily fantasy sports customers to “select at least four athletes” as opposed to two, and “relying on fantasy sports rather than the literal statistics” from the game, according to Covers.com. And prior to this, Colorado also introduced a fantasy contest operator license to ensure both proper regulation of DFS sites and their ability to separate offerings from traditional sports wagers.

These changes, it seems, didn’t create enough of a differentiation. And it is unclear at this time whether Colorado sports betting policymakers are prepared to once again collaborate with DFS sites to further adjust their offerings.

The Future of Daily Fantasy Sports in Colorado Remains a Mystery

In many cases over the past year, you just knew Pick ‘Em games would be banned. That isn’t necessarily the case here. Not only have Colorado sports betting regulators already shown they’ll attempt to negotiate changes, but the scheduled vote we referenced may not have even taken place.

McQuillan inquired about the vote on behalf of Legal Sports Report. The response he received borders on cryptic. “It is my understanding the Committee on Legal Services (COLS) is reviewing the rules, but we weren’t aware of the date yet,” a spokesperson for the Colorado Division of Gaming told LSR via email.

This tidbit could be much ado about nothing. But other states have taken quicker, more decisive action against daily fantasy sports Pick ‘Em competitions.

Could the ongoing uncertainty emanating from Colorado sports betting regulators actually bode well for DFS sites? If the past year is any indication, the answer is a resounding “no.” And yet, relative to how this same process has unfolded across the USA, daily fantasy sites operating in Colorado may actually view what’s happening in The Centennial State as a small victory. For now.

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