A war of words has broken out between legal sports betting titans and a daily fantasy sports leader.
Jeremy Levine — the CEO of the daily fantasy sports site Underdog — went scorched earth this week on both DraftKings and FanDuel. The latter has openly accused DFS sites of acting as illegal sports betting operations with their prop bets.
“As you may have seen, the right to play our fantasy sports contests has recently come under attack,” Levine wrote in an open letter on Underdog.com. “The attention is not organic — it's being directly fueled by the companies with a virtual monopoly in sports gaming: FanDuel and DraftKings.
Levine wrote that FanDuel and DraftKings — two online betting sites that got their start in fantasy sports but have since taken over the sports betting market share in the U.S. — are trying to “squeeze consumers” and squeeze out anyone they deem as competition.
“They've seen our company, and others, produce superior products, more exciting user experiences, and begin to challenge them for sports fans' attention — and they're scared that we will challenge their market positions,” Levine wrote. “We're already bigger than they are in fantasy. Frankly, they should be scared.”
Origin of outrage
These strong words come weeks after Cesar Fernandez — senior director of state government relations at FanDuel —told the Council of Legislators From Gaming States at a summer meeting that sites like Underdog and PrizePicks “are posing as fantasy operators.”
“They are running illegal sportsbooks,” Fernandez said.
Several states apparently have listened and are cracking down on DFS sites. Wyoming sent a cease-and-desist letter to Underdog and PrizePicks last month, while New York gaming regulators decided not to allow pick ’em-style games involving players as it’s too close to prop betting. Maine also sent a complaint letter to Underdog earlier this summer, and Ohio is currently investigating several DFS sites.
Playing within the rules
Levine wrote that his company has not violated in federal regulations and argued that Underdog’s games meet the criteria to act as daily fantasy sports, not sports betting.
“Every single one of our contests meets that simple definition,” Levine added in his letter. “Fantasy sports is not limited to only FanDuel and DraftKings’ salary cap contests. The laws they wrote say fantasy sports is far broader than just salary cap.”
Levine also believes FanDuel and DraftKings have “constructed a disingenuous narrative” that Underdog’s contests are illegal. He called the arguments “ironic” and the sports betting line “flimsy.”
I couldn’t be more excited about Underdog. BBM IV's the largest fantasy contest ever. Our Pick’em games are wildly popular. Our new vision for sports betting comes soon. @FanDuel & @DraftKings want to take all that away from you. You should know what they’re trying to do.
— Jeremy Levine (@JerLevine) August 9, 2023
