Arkansas sends cease and desist letters to two DFS operators allegedly offering unlicensed sports betting

The Department of Finance and Administration (DFA) of Arkansas has sent cease and desist letters to two companies it believes are operating unlicensed sports betting. The companies, Underdog Sports Holding and SidePrize LLC dba PrizePicks, were operating as daily fantasy sports organizations. 

The DFA said the two companies operate a type of fantasy football where consumers create a team and earn points based on the fantasy team’s performance. According to the DFA, the problem is that the two operators created a sports betting-like product in the past year called player prop bets. This type of betting is sports betting and being unlicensed violates Arkansas law, officials said, as reported by KARK 4 News.

Along with the player prop bets being a violation, the sites are not verifying the ages of players or paying state taxes on the revenue generated, which is a second and third violation of Arkansas sports betting laws, a spokesperson said.

"Arkansas law requires sports bets to be placed with a licensed sportsbook that is required to verify the age of the consumer," detailed DFA Secretary Jim Hudson according to the above-mentioned media. "The state has an interest in protecting Arkansas children from operators seeking to exploit underage Arkansans."

DFA Regulatory Administrator Trent Minner said the letters put the companies on notice that Arkansas will not tolerate illegal gambling. 

Fantasy sports are legal to play in Arkansas. A DFA spokesperson explained that traditional fantasy sports websites operate legally under Act 1075 of 2017, which states fantasy sports are not gambling.