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PrizePicks has agreed to cease offering paid fantasy sports in New York and pay almost $15m to the New York State Gaming Commission for operating contests in the state without a permit from 2019 through 2023.

The company will halt its paid contests in the state on Thursday (February 15), citing “recent updates in the licensing rules” enacted by the commission.

ESPN first reported on Tuesday that PrizePicks halted paid contests as part of a settlement agreement where the company also agreed to pay the near $15m penalty.

In the settlement, a copy of which was obtained by 91����ԭ�� GamblingCompliance, the commission and PrizePicks agree that the company did not hold a temporary permit to operate in the state, and was not authorized to offer interactive fantasy sports contests.

PrizePicks asserted that “it operated in New York in a good faith belief that it had the ability to do so.” The company had been offering paid contests in the state since June 2019.

The $15m settlement amount was calculated based on the revenue PrizePicks generated in contests and the number of days the fantasy sports operator offered “purported IFS contests” from that June launch date through the end of 2023.

The penalty is believed to be the largest ever paid by a daily fantasy operator for infractions related to fantasy sports in the United States since the activity became popular more than a decade ago.

The commission accepts that PrizePicks offerings were fantasy sports contests only for the purpose of the settlement agreement, rather than a broader judgment on the legality of against-the-house and/or single-statistic fantasy contests.

In its notification to customers, PrizePicks said it will launch its free-to-play product in New York on Thursday, which it has also launched in Michigan and Colorado.

All three states have adopted recent regulatory changes that limit or prohibit against-the-house or single statistic fantasy contests.

The company also says it is “actively working with the [New York State Gaming] Commission” to get approval for its new peer-to-peer product, Pick'Em Arena. 

“Our team is pleased to have reached a resolution with the Gaming Commission and we look forward to continuing our work with the State to modernize New York's daily fantasy sports laws,” a company spokesperson said Tuesday. 

“As safer, skill-based DFS contests like ours rise in popularity, we will work constructively with policymakers on thoughtful legislation that allows New Yorkers to play the contests they love, ensures strong consumer safeguards, and generates tax revenue for the state.”

The stipulation specifically noted that none of the actions taken by PrizePicks would disqualify the company from future permit registration in New York.