Fanduel Launches Novel Peer-to-Peer Pick'em Contest

In a move that broadens its footprint in the US market, FanDuel has launched a new product called FanDuel Picks. This peer-to-peer pick'em game, which resembles parlay-style sports betting, is designed to appeal to sports fans in states where the company does not operate a sportsbook.

The setup of FanDuel Picks intentionally evokes the mechanics of Same Game Parlays, which have become ubiquitous and highly profitable for sportsbooks in regulated markets. Participants in FanDuel Picks select between three and six players and predict whether each will go "more" or "less" than an assigned stat projection. Payouts in FanDuel Picks are determined by pooled entry fees, with the potential for returns reaching up to 1,000 times the original stake.

FanDuel's move signals confidence that the peer-to-peer paradigm can withstand legal challenges. The resemblance of pick'em fantasy contests to parlays may continue to elicit scrutiny from regulators, but operators like PrizePicks and Underdog Fantasy have transitioned to peer-to-peer structures, setting a precedent for FanDuel's entry.

The launch of FanDuel Picks is in response to a shifting regulatory landscape, with more than a dozen state regulators scrutinizing player-prop fantasy contests. State regulators have argued that house-based pick'em formats, like FanDuel Picks, are effectively unlicensed sports betting. However, at the federal level, the regulation of player prop fantasy competitions has primarily been overseen by the Federal Trade Commission (FTC) and, at times, the Unlawful Internet Gambling Enforcement Act (UIEGA) enforcement agencies. The main direct regulatory authority is usually state-level gaming or lottery commissions, with no specific single named government official universally responsible.

FanDuel's GM, Rob Cullen, stated that the product is intended to provide a social way for fans to engage with sports and athletes they love. The product is aimed at capturing demand from players who want betting-style experiences in non-wagering states. DraftKings rolled out a peer-to-peer pick'em product in late 2023, setting a precedent for FanDuel's entry.

The peer-to-peer structure of pick'em fantasy contests highlights a nuance in how regulators juxtapose fantasy sports and gambling. Debates over the classification of daily fantasy sports remain unresolved in major jurisdictions such as California. As regulators continue to navigate this complex landscape, companies like FanDuel are finding innovative ways to cater to the demand for sports betting-style experiences in non-wagering states.