Arkansas Cracks Down on Unlicensed Sports Betting Disguised as Fantasy Sports

Arkansas’s actions against Underdog Sports Holding and SidePrize LLC underscore a broader commitment to enforcing gambling laws and protecting consumers. By delineating the boundaries between legal fantasy sports and unlicensed sports betting, the state aims to foster a transparent and responsible gaming environment. As the situation unfolds, the industry and consumers alike will be watching closely to see the impact of these regulatory efforts on the future of online gaming in Arkansas.

A Bold Move Against Unlicensed Betting

In an assertive stance to uphold gambling regulations, the Arkansas Department of Finance and Administration (DFA) has initiated legal action against two companies accused of veering into unlicensed sports betting activities. This decisive measure highlights the state’s commitment to maintaining a regulated and safe betting environment.

Identifying the Culprits: A Closer Look

Underdog Sports Holding and SidePrize LLC, operating under the brand PrizePicks, have come under scrutiny for allegedly blurring the lines between daily fantasy sports (DFS) and unlicensed sports betting. Traditionally, DFS allows consumers to assemble virtual teams and score points based on real athletes’ performances. However, the introduction of player prop bets by these companies has raised concerns over the nature of their offerings.

The Heart of the Issue: Player Prop Bets

Player prop bets represent a significant departure from traditional fantasy sports, closely mirroring sports betting mechanics. This shift has prompted the DFA to classify these offerings as unlicensed sports betting, a clear violation of Arkansas state law. The absence of age verification and tax contributions on generated revenue further compounds these violations, underscoring the need for regulatory intervention.

Protecting Consumers and Upholding Laws

Arkansas’s legal framework mandates that sports bets be placed with a licensed sportsbook, emphasizing the importance of consumer age verification. DFA Secretary Jim Hudson and Regulatory Administrator Trent Minner have voiced their concerns, particularly regarding the protection of minors from illegal gambling activities. This stance reflects the state’s broader interest in safeguarding its residents from exploitation.

The Legality of Fantasy Sports in Arkansas

Despite the controversy surrounding player prop bets, traditional fantasy sports remain legally playable within the state. Act 1075 of 2017 delineates fantasy sports as distinct from gambling, allowing them to operate within a legal gray area. This distinction is crucial for understanding the state’s approach to regulating different forms of digital gaming.