Underdog Fantasy has decided to cease its operations in New York following a significant settlement agreement with the New York State Gaming Commission (NYSGC), marking a pivotal shift in its market presence. In an eventful turn, the fantasy sports operator is gearing up to launch its Champions Pick’em game in the new territories of New Jersey and Delaware.

The conflict with NYSGC stemmed from a licensing issue, where Underdog, after acquiring Synkt Games in December 2022, was found offering contests not explicitly outlined in Synkt’s temporary license terms, acquired in 2016. This oversight led to a settlement where Underdog will pay approximately $18 million and withdraw its services from New York. Despite this, the company retains the right to seek a permanent fantasy or other gaming licenses in the state, signaling potential future re-entry.

Nicholas Green, Underdog’s General Counsel, quoted by SBC Americas, stated, “For nearly a decade, fantasy sports in New York has operated under a cloud of regulatory uncertainty. While we have agreed to the settlement, we believe it clarifies the licensing landscape. We are committed to resuming our offerings in New York as regulations permit and are working closely with the NYSGC to facilitate this.”

Part of the agreement includes Underdog’s commitment to settle back taxes on earnings from fantasy operations, further aligning with regulatory expectations. The NYSGC has also introduced stringent regulations against proposition betting-style contests, with a complete set of rules finalized in June 2024, shaping the future framework for license applications.

Expanding Horizons: Underdog’s Move to New Jersey and Delaware

Simultaneously, Underdog is not just retracting but also expanding, with its innovative Pick’em Champions game set to debut in New Jersey and Delaware. Previously, Underdog was active in New Jersey without offering this particular game format, making its introduction in Delaware a first for the company.

“Both New Jersey and Delaware have led with progressive sports gaming regulations. Our expansion here with Pick‘em Champions is a testament to their robust regulatory frameworks, and we are excited about the opportunities this presents,” Green elaborated.

While exiting New York is a significant move, Underdog’s footprint in the fantasy sports landscape continues to grow. The company’s strategy involves not only diversification of offerings but also geographical expansion, evidenced by its operations in states like North Carolina and plans to enter the Missouri betting market. With regulatory approvals already in place in New Jersey and Delaware, Underdog’s Champions Pick’em game is set to enhance the DFS experience for players in these states.

This strategic pivot from New York to New Jersey and Delaware exemplifies Underdog’s adaptability and commitment to its growth and compliance with evolving legal and regulatory standards.