The Florida Gaming Control Commission (FGCC) has taken a definitive stance against certain Daily Fantasy Sports (DFS) operators in the state. On January 31, the FGCC issued letters to Betr, PrizePicks, and Underdog Sports, demanding they cease operations within Florida. The companies were given a 30-day ultimatum to withdraw from the state or face legal repercussions.
Previous Warnings and Legislative Actions
This isn't the first time these operators have been warned. The FGCC previously sent cease-and-desist letters to the same three DFS sites earlier in September. These warnings stemmed from the companies engaging in fantasy sports games, notably those involving pick'em style contests, which some state regulators contend closely mimic unlicensed sports betting activities.
However, there are legislative efforts afoot that could potentially carve out exemptions for these operators from Florida's stringent gambling regulations. With the legislative session set to conclude on March 8, the timing of these latest directives from the FGCC puts additional pressure on these companies.
In response, a spokesperson from PrizePicks stated, "We can confirm that we have reached a negotiated resolution with the FGCC to cease operating our current contests on March 1st." This decision marks a significant retreat for these companies from the Florida market.
The Impact of Exiting Florida
Leaving Florida poses a considerable challenge to Betr, PrizePicks, and Underdog Sports. In the state, legal digital sports betting is predominantly under the control of Hard Rock Bet, which launched its sports betting application in late 2023. Given Florida's market potential for fantasy sports games, being sidelined presents a missed opportunity for these operators.
Curiously, the state has not applied similar regulatory scrutiny to other fantasy games offered by giants like DraftKings and FanDuel, leading to questions about the enforcement criteria used by Florida regulators.
Despite this setback, it's worth noting that Betr, PrizePicks, and Underdog continue their operations across various other states, navigating the complex landscape of U.S. gambling and fantasy sports regulations.
Seminole Tribe's Gaming Monopoly
The Seminole Tribe holds a significant stake in Florida's gambling ecosystem, maintaining a monopoly over most house-banked table games in the state. A pivotal moment came in 2021 when the Tribe successfully negotiated an expansion of its gaming privileges. However, contention arose between the Tribe and Governor Ron DeSantis over the proposed "hub-and-spoke" sports betting model, which is currently under appeal to the U.S. Supreme Court.
Hard Rock Bet, the sportsbook brand of the Seminole Tribe, made a noteworthy reentry into the online betting scene in December, asserting its presence in a market that continues to evolve.
One critical issue with pick'em fantasy sports games, from the perspective of the Tribe's compact, is that these games involve players betting money against the house, potentially violating the agreed-upon terms.
Broader Regulatory Concerns
The regulatory challenges facing DFS operators extend beyond Florida's borders. On Thursday, the Arkansas Department of Finance and Administration issued its own cease-and-desist letters to Underdog Sports and PrizePicks. The state administrator, Trent Minner, emphasized, "Arkansas is not 'wide open,'" referring to the need for these platforms to halt their "unlicensed sports betting" operations within the state.
One particular concern raised is the accessibility of these gambling games to individuals under the age of 21, highlighting the broader issues of responsible gambling and age verification that remain critical in the industry.
The Legal Landscape of DFS in Florida and Beyond
The legal stance towards DFS in Florida, as in several other states, remains somewhat ambiguous. An opinion from 1991 by then-Attorney General Robert Butterworth suggested that fees associated with fantasy sports contests could be interpreted as a form of gambling. This opinion, rendered 16 years before the launch of the first DFS website, continues to loom over the industry's operations within the state.
Despite these challenges, DFS platforms have continued to serve Floridian players, navigating the legal gray areas with varying degrees of success. Lawmakers have considered numerous proposals to regulate and formalize the DFS industry more clearly, though none have yet crossed the legislative finish line.
As the situation develops, the future of DFS in Florida and its implications for operators like Betr, PrizePicks, and Underdog Sports will likely hinge on forthcoming legislative actions, the outcomes of ongoing legal disputes, and the evolving landscape of U.S. sports betting regulations. The conflict between burgeoning digital sports enterprises and longstanding gambling statutes continues to present a dynamic and uncertain frontier for legislators, regulators, and industry stakeholders alike.