PrizePicks has an $8M Cooper Flagg card. Is its new product gambling?

PrizePicks has acquired one of the world's most valuable basketball cards, an $8.04 million Cooper Flagg rookie card, and is giving customers the chance to win it through digital trading card packs starting at just $1.

The fantasy sports and prediction markets operator launched PrizePicks Packs on October 21, entering a rapidly growing collectibles market where customers pay to reveal randomized trading cards that can be shipped to them or immediately sold back for cash.

The product features nine pricing tiers ranging from $1 to $2,500, with higher-priced packs offering better chances of receiving valuable cards.

But the launch raises a question that extends well beyond trading card collecting: when customers pay for a randomized outcome with a cash-equivalent value, how different is that from gambling?

How PrizePicks Packs works

PrizePicks Packs brings the experience of opening physical trading card packs to the company's existing app.

Customers choose a basketball, football, or Pokémon pack, pay the advertised price, and reveal a randomly assigned physical trading card.

They can then have the card shipped or sell it back to PrizePicks for what the company calls 100% of its fair market value.

That value is determined using third-party market data, including information from Card Ladder, which tracks trading card sales.

For example, a customer purchasing a $50 pack could receive a card worth considerably less than $50, potentially recovering only a fraction of what they spent.

Alternatively, they could receive a card worth substantially more than the purchase price.

In a demonstration reported by Barron's, a PrizePicks executive opened three $50 packs and received cards valued at $15, $30, and $50.

That represents $150 spent for $95 in stated card value, although three packs are far too small a sample to establish the product's typical returns.

PrizePicks says customers can see estimated pull probabilities and card value ranges before purchasing. Its help documentation notes that those estimates may fluctuate as card availability changes.

Why PrizePicks bought an $8 million Cooper Flagg card

The headline attraction is Cooper Flagg's one-of-one NBA Rookie Debut Patch Autograph card, which sold for $8.04 million at a Fanatics Collect auction in September.

The card features a patch from the jersey Flagg wore during his NBA debut and set a record for a basketball card featuring a single player.

According to reporting by Nick Devor, PrizePicks acquired the card from a third party following the auction, rather than purchasing it directly at the original sale.

The company also secured two other valuable rookie cards from the same auction: Dylan Harper's debut patch autograph, which sold for $2.88 million, and Kon Knueppel's, which sold for $2.34 million.

All three are now among the potential prizes in PrizePicks Packs, alongside a rare Pikachu Illustrator Pokémon card valued at approximately $2.8 million.

PrizePicks says even its least expensive basketball packs offer a chance to receive the Flagg card, although more expensive packs carry better odds of pulling high-value collectibles.

The presence of such valuable cards creates an obvious attraction for customers. But the possibility of winning an $8 million collectible says little about the likely financial outcome of an individual pack purchase without considering the probability of receiving it.

Is PrizePicks Packs gambling?

PrizePicks argues that its new product is fundamentally different from gambling.

Chief Legal Officer Jason Barclay told Barron's that the company views digital rips as an extension of traditional trading card collecting.

"This is much more like an e-commerce transaction than it is a form of gambling," Barclay said.

The company points to the longstanding practice of buying physical trading card packs, where customers pay a fixed price without knowing which cards they'll receive.

However, digital rips introduce features that make the distinction less straightforward.

Customers purchase randomized outcomes, the prizes have identifiable monetary values, and they can immediately sell cards back to the platform.

That combination resembles some of the mechanics associated with gambling products, although the legal classification depends on applicable laws and how regulators interpret them.

PrizePicks appears conscious of that uncertainty.

Devor reported that the company sent briefings to every state attorney general and met with gambling regulators before launching the product, seeking to address potential concerns about its legal status.

The company has not presented those discussions as formal regulatory approval.

What should customers know before buying digital packs?

For anyone considering digital rips, the most important question isn't simply whether a valuable card is available.

It's whether the price of a pack represents reasonable value given the possible outcomes and their probabilities.

In betting, the concept is commonly understood through expected value: the probability-weighted average of all possible returns compared with the amount spent.

The same principle applies to randomized trading card packs.

A $50 pack offering a small chance of receiving a multimillion-dollar card could still have an expected return considerably below its purchase price.

Without sufficiently detailed information about the probability and value of each possible outcome, customers cannot independently calculate that expected return.

PrizePicks says it displays pull probabilities and estimated value ranges before purchase, which provides customers with information to assess the product.

But those disclosures do not guarantee that customers will recover what they spend.

There is also a distinction between a card's estimated fair market value and the price it might achieve in a future sale. Collectible values can change, particularly in a market driven partly by speculation and demand for rare items.

For customers who immediately sell cards back to PrizePicks, the company's valuation methodology becomes particularly important.

PrizePicks introduces consumer protections

Although PrizePicks disputes that digital rips constitute gambling, it has introduced several protections commonly associated with responsible gambling.

Customers must be at least 18, and the company says its product includes identity verification, mandatory deposit limits, and self-exclusion options.

PrizePicks also offers access to behavioral health services through Kindbridge without out-of-pocket costs for eligible customers.

Barclay acknowledged the potential risks associated with the product.

"We recognize that anything in the sports entertainment space can be subject to abuse, can be subject to addiction," he told Barron's.

The safeguards are notable because they acknowledge that randomized collectibles can create financial and behavioral risks regardless of their legal classification.

However, the presence of consumer protections does not, by itself, resolve whether the product should be regulated as gambling.

Digital rips are becoming big business

PrizePicks is entering an increasingly competitive market.

Fanatics and GameStop have invested in digital collectibles, while Underdog launched its digital rips product in September.

DraftKings' venture capital arm has backed digital rips platform Triumph, and Coinbase has also signaled interest in the category.

According to industry research firm Eilers & Krejcik Gaming, the economics of digital rips are similar to those of gambling products because operators price packs based on the expected value of the prizes they contain.

The growing involvement of established gambling and financial services companies suggests digital rips are becoming more than a niche collectibles business.

But that expansion also raises questions about how customers should be protected when traditional collecting increasingly resembles wagering on randomized financial outcomes.

For PrizePicks, the $8 million Cooper Flagg card provides a compelling marketing attraction.

For customers, the more important figures are the price of each pack, the probabilities of receiving different cards, and the amount they can reasonably expect to recover.

Whether digital rips ultimately count as gambling or e-commerce, they carry the same financial risks and deserve the same scrutiny.