In a significant development for the fantasy sports industry in Florida, the Florida Gaming Control Commission (FGCC) issued letters to three prominent operators—Betr, PrizePicks, and Underdog Sports—on January 31, demanding their exit from the state within 30 days to avoid legal repercussions. This move by the FGCC follows cease-and-desist letters sent to these daily fantasy sports (DFS) sites in September for their involvement in fantasy sports games, including pick'em style games. The contention from some state regulators is that these activities bear a resemblance to unlicensed sports betting, thereby crossing the boundaries of what is legally permissible.
Legislative Challenges and Negotiations
The confrontation with the FGCC comes amidst ongoing legislative efforts aimed at potentially shielding these operators from the grip of Florida's stringent gambling regulations. With the legislative session scheduled to conclude on March 8, the clock is ticking for these platforms. In a statement, PrizePicks acknowledged reaching a negotiated resolution with the FGCC to cease operating their current contests as of March 1, highlighting the considerable impact of exiting the Florida market for each company. Meanwhile, it remains unclear why similar fantasy games offered by DraftKings and FanDuel have not drawn similar regulatory scrutiny in the state.
The Landscape of Legal Digital Sports Betting in Florida
Florida's legal digital sports betting landscape is tightly constricted, with Hard Rock Bet—introduced by the Seminole Tribe in late 2023—currently standing as the sole legally sanctioned sports betting app. The Seminole Tribe holds a monopoly over most house-banked table games in Florida, a privilege that was expanded in 2021. However, disputes between the Seminoles and Governor Ron DeSantis over a "hub-and-spoke" sports betting model, alongside arguments over its compliance with federal Indian gaming statutes, have led to a legal appeal to the U.S. Supreme Court. Despite these challenges, Hard Rock Bet made its return to the online sports betting scene in December.
Regulatory Scrutiny Beyond Florida
The regulatory challenges faced by DFS platforms extend beyond Florida’s borders. For instance, on Thursday, the Arkansas Department of Finance and Administration issued cease-and-desist letters to Underdog Sports and PrizePicks. These actions were taken to address the provision of "unlicensed sports betting" within the state, highlighting concerns regarding accessibility to users under the age of 21. "Arkansas is not 'wide open,'" declared Regulatory Administrator Trent Minner, reflecting the tightening regulatory environment for DFS platforms across various states.
The Ambiguous Status of DFS in Florida
DFS operates in a grey area in numerous states, including Florida, where regulations remain unclear. An opinion from then-Attorney General Robert Butterworth in 1991 suggested that fees associated with fantasy sports contests could be classified as gambling. This interpretation predates the inception of the first DFS website by 16 years. Despite this, DFS platforms have continued to serve Floridians, even as lawmakers have debated numerous proposals aimed at formalizing the industry. To date, however, no such proposals have successfully passed in either legislative chamber, leaving the status of DFS in Florida in a state of flux.
The recent actions by the FGCC and ongoing legislative discussions reflect the complex and evolving landscape of fantasy sports and sports betting in the United States. As states grapple with how to regulate these activities, operators like Betr, PrizePicks, and Underdog Sports find themselves navigating a patchwork of laws and regulations. With substantial markets at stake, the outcomes of these regulatory battles and legislative efforts will significantly impact the future of the fantasy sports and online betting industries in Florida and beyond.