One of the leading daily fantasy sports (DFS) operators in the country, Underdog Fantasy announced today it has withdrawn all DFS contests from New York and will pay a fine of $17.5 million to the New York State Gaming Commission.

However, it also announced plans to expand its DFS games into both New Jersey and Delaware by the end of the month.

The decision to withdraw all DFS contests – both pick’em and draft – came after a ruling from the New York State Gaming Commission in which the commission determined Underdog was not in line with the state’s current DFS law. 

Underdog Fantasy operated in the Empire State, like all major DFS companies in New York, under a temporary license. Underdog Fantasy acquired Synkt Games, and its temporary DFS license, in 2022. 

However, the New York State Gaming Commission determined state law requires that temporary license holders not alter their DFS games from the time of license issuance. For Underdog, this means the company would have had to offer DFS games similar to the ones Synkt Games offered when it received its temporary license from the gaming commission in 2015. 

The gaming commission, however, ruled that Underdog Fantasy did indeed alter its games from their original state and fined the company $17.5 million. 

In a statement released to the media, Underdog disagreed with the commission’s interpretation of the law, but has agreed to settle the matter by withdrawing all games and paying the fine, which was based on the amount of revenue Underdog’s games generated in the state. 

Underdog Fantasy has since applied for a permanent fantasy sports license in the state. 

“It’s a unique, temporary license issue specific only to New York, and not related to any specific game format we offer,” Nicholas Green, Underdog’s General Counsel, said in a release statement. “Any fantasy game created after 2015, no matter the format, is not permitted under the commission’s interpretation of what games a temporary permitholder, like Underdog, can and cannot offer. The high fine amount speaks to the popularity of our games, as the settlement was calculated based on our revenue in New York.”