On the surface, it may seem reasonable to wonder how PrizePicks is considered to be a fantasy sports operator (and thus legal to play in most states) rather than a gambling site (which would lead to restrictions). The picks are set up similarly to typical prop bets: You both deposit and win real money, and there is at least a degree of chance involved. However, legal definitions of PrizePicks have labeled it as a daily fantasy pick’em-style site and app, not a sportsbook. So is PrizePicks gambling or DFS? Moreover, is PrizePicks legal, and why is that? Here we will go into what makes PrizePicks legally DFS and not sports betting.
Why PrizePicks Is Fantasy, Not Gambling
There are a couple of reasons that PrizePicks is considered to be daily fantasy and not gambling, but this is perhaps the most important one: You are playing performance of multiple players, not one single player or team, and picking against the numbers — team success does not factor into it whatsoever. When you view it that way, PrizePicks is no different than DFS sites like DraftKings and FanDuel, and their legal status as real-money daily fantasy — not betting — was settled a while ago.
As such, these contests are considered to be contests of skill, not chance. These require a more thorough understanding of sport, player performance and game theory to be successful, whereas gambling is by and large a game of luck. Sure, there are betting sharps who may bet better than the average person — our OddsShopper experts are proof of that — but not to the extent that great fantasy players can separate themselves.
The fact that scores of games do not matter at all on PrizePicks also helps its labeling as a fantasy site. That is the biggest controversy with gambling in sports — that it could open a rabbit hole that affects team performance. With PrizePicks, and other DFS apps like PrizePicks, there is no issue here.
That is not to say that there isn’t controversy surrounding PrizePicks as a de facto gambling site, even though it isn’t. The fact of the matter is that PrizePicks projections do resemble a typical player prop that a sportsbook would offer. As such, some major states have interpreted PrizePicks to be gambling and thus have either dubbed it to be not legal or have issued cease-and-desist letters. New York is the biggest one to currently label PrizePicks as illegal.
Unlawful Internet Gambling Enforcement Act
The Unlawful Internet Gambling Enforcement Act (UIGEA) determined that online fantasy sports are not included in the evaluation of online gambling and thus are legal, provided winnings are confirmed beforehand and the number of participants does not affect the amount of winnings given out. Also, these games cannot involve game lines in any way, nor can they target one sole athlete.
As long as states do not legally disagree with this ruling, PrizePicks is free to operate in those states. Because of this, PrizePicks in many states is simply viewed as “not illegal” rather than legally legal, if you will. However, after Florida sent cease-and-desist letters to PrizePicks, legislators started working to write a bill that would explicitly legalize PrizePicks. The point is that, for the most part, lawmakers are fairly certain that PrizePicks is daily fantasy — a paid contest of skill, not gambling.
Another reason PrizePicks is able to maintain their legal status as a fantasy operator is their compliance with gaming regulators in each state where they operate. PrizePicks maintains close communication with states commissions to make sure they are meeting requirements to legally be considered fantasy sports, not gambling.
At the end of the day, the two big things that separate PrizePicks from sports betting are the skill-based contests and the fact that game outcomes have no bearings on successful picks. You are playing the numbers with player statistics, no different from DraftKings and FanDuel, and those sites are considered to be legal in nearly all U.S. States. Chances are PrizePicks is available where you are as well, so why wait? Check it out!