By: Jonathan Tunney
March 26, 2024
Photo Credit: PrizePicks
PrizePicks is an app that lets players put money down on predictions of how individual athletes will perform in games. This is called an entry; if their entry wins, players receive a prize as a cash payout. Doesn’t this sound like sports betting? That’s because it is; sports betting experts would refer to a PrizePicks entry as a player prop parlay. If you ask PrizePicks and 29 states’ gambling regulations, however, PrizePicks is not sports betting, it’s a daily fantasy sports game. This distinction has allowed PrizePicks to gain mass appeal and dominate certain markets, drastically altering the landscape of the sports betting industry.
There are two main ways that PrizePicks uses their distinction in certain states as a daily fantasy sports game to their advantage. Firstly, PrizePicks can offer services in certain states where sports betting isn’t legal, including California and Texas, the two most populated states in America. This is incredibly profitable for PrizePicks because, in these states, PrizePicks is the best and almost only option for sports fans to partake in something that closely resembles sports betting. Secondly and more importantly, in states where PrizePicks is classified as a daily fantasy sports game, they offer services to players 19 years old and older. Websites and apps classified as sports betting can only offer services to players who are at least 21 years old. This allows PrizePicks to monopolize the market of 19-20-year-old sports bettors, a convenient demographic filled with college students and passionate sports fans. This model allows PrizePicks to take advantage of and reap profits from young, inexperienced bettors, as well as foster new gambling addictions in a vulnerable population whose brains aren’t fully formed. While this strategy may help PrizePicks close the gap with DraftKings and FanDuel in the short term, it may come with the cost of increased gambling use, dependency, and changing viewership patterns for a younger generation of sports fans.
Questions about the ethics of platforms like PrizePicks and other sports gambling websites will only continue to grow as some sports leagues have accepted gambling with open arms. For instance, the NBA announced a feature where fans can live bet directly through NBA League Pass at any time. This news comes at a time when PrizePicks has numerous ongoing disputes with Florida and recently reached a settlement of $15 million with the New York Gaming Commission for illegally operating. As time goes on, it will be incredibly interesting to see how state governments value the revenue brought in from an exponentially growing sports betting industry against the debilitating effects of increased gambling use and addiction rates among their populations.