How big can PrizePicks make it in New York?

More than a year after PrizePicks settled with the New York Gaming Commission (NYGC) for $15m, the fantasy sports operator is bringing its product back to the Empire State.

New legislation in 2023 frustrated PrizePicks' efforts in New York, with the NYGC determined to squeeze out any fantasy games that it saw as mimicking prop betting - the pick'em style games that PrizePicks offered were squarely in the spotlight.

Retroactively, the regulator determined that PrizePicks had violated state law between 2019 and 2023 with its offering - the result was a swift market exit and that hefty settlement.

In the meantime, plenty has changed, and the operator seems to have made every effort to grow in other markets, while also evolving its product in collaboration with regulators to improve compliance.

New York will now become the 16th jurisdiction to formaly ratify PrizePicks' contests under its fantasy sports laws.

Jason Barclay, PrizePicks' Head of Public Policy and Chief Legal Officer, said: "We worked diligently to design a game that meets the Commission's rigorous standards, and New York's decision underscores the idea that innovation in fantasy sports can thrive within a clear regulatory framework."

All-change

So it is a different PrizePicks that will enter New York, and while the management and branding remain the same, the company is riding in fresh from the confirmation of its acquisition by Allwyn.

Following Allwyn's subsequent merger with Greek operator OPAP, PrizePicks is now the most significant US arm of the second largest-gambling operation in the world after Flutter.

There are 11 other licensed fantasy operators in New York, with FanDuel and DraftKings, Underdog and Yahoo the ones most would consider in PrizePicks' league.

And while all of these now offer pick'em games, PrizePicks was built for it and has a huge following. So while, on one hand, the opportunity to compete fiercely with the established giants seems like it may have passed, the operator does have edges it can exploit.

It is perhaps a given that PrizePicks will do well in New York, slotting in among those top-tier operators in fantasy sports, but it's worth considering the likelihood of even more dramatic growth beyond that.

Sporting prowess

Could PrizePicks intrude meaningfully on the overall sports betting rankings in the future?

One of the edges it certainly didn't have last time is the apparently unequivocal backing of the regulator - the change from an 'against-the-house' fantasy sports product to a collaboratively designed 'peer-to-peer' model is being looked on kindly.

Underdog has been in and out of favour with NYGC at times this year, proving it is not necessarily easy to maintain that position - and in a time when compliance is being seen more and more as a commercial necessity as well as a regulatory one, PrizePicks looks in a good place to take bold steps forward.

Earlier this year, it became the first fantasy sports operator to achieve certification from the Internet Compliance Assessment Program (iCAP), something else that marks it out from the crowd somewhat.

If we look at other contenders to upset the overall sports betting dominance of FanDuel and DraftKings, Underdog, with its broader wagering offering, seems to be competing from a more even footing with those two.

But PrizePicks' parent company isn't messing around. Allwyn is ambitious and will want a loud voice in New York's sports betting throng.

We've seen from Fanatics' progress in New York that growth is possible - and that market share can at least be chipped away from the top two. PrizePicks' existing profile, as well as major sports partnerships, may provide it with similar advantages - much to the chagrin of any Tribal and commercial critics who oppose the brand on regulatory grounds.

Outward expansion

So, building on the current good standing PrizePicks has with the NYGC, could we see it broadening its product and going for more big licenses?

In 2021, nine were selected to offer mobile sports betting in New York, the fourth-most populous US state - it may be that PrizePicks has the potential firepower to disturb the peace of that group as well.

We've already seen that the company is preparing a predictions market offering, and CEO Mike Ybarra seems confident of future prospects: "New York is home to some of the most passionate sports fans in the country, and we know they will be excited to have PrizePicks back."

How big can PrizePicks go? Toppling the established giants will be a tall order and a long-term project, but with the might and clear uncompromising ambition of Allwyn behind it, it will be very interesting to see how quickly the brand might move through the field.