In a significant development within the realm of sports betting and fantasy sports in Florida, the Florida Gaming Control Commission (FGCC) recently took decisive actions against three Daily Fantasy Sports (DFS) operators. On January 31, the commission issued letters to Betr, PrizePicks, and Underdog Sports, instructing each operator to exit the state within 30 days to avert potential legal consequences. The move follows cease-and-desist letters sent by the FGCC to these DFS sites back in September for engaging in fantasy sports games, including pick'em style games, which some state regulators argue resemble unlicensed sports betting.
Legislative Efforts and Market Implications
Amidst this regulatory crackdown, there are ongoing legislative efforts aimed at potentially exempting these operators from Florida's strict gambling regulations. The outcome of these efforts remains to be seen as the legislative session is set to conclude on March 8. In light of these developments, one of the affected companies, PrizePicks, has publicly announced a negotiated resolution with the FGCC to cease operating their current contests on March 1st. This exit from Florida represents a considerable blow to each DFS company, given the considerable market opportunity within the state.
Market Exclusivity and Competition
Florida's legal digital sports betting landscape is currently limited, with Hard Rock Bet being the only operator. Hard Rock Bet introduced its sports betting app in late 2023, marking a significant moment in the state's betting market. Despite the exclusivity, there remains a vast untapped potential for fantasy sports games in the state, though reasons why similar fantasy games by prominent operators like DraftKings and FanDuel haven't faced regulatory scrutiny in Florida remain unclear. Meanwhile, Betr, PrizePicks, and Underdog continue to operate in numerous other states across the country.
Seminole Tribe’s Gaming Monopoly
The Seminole Tribe holds a monopoly on most house-banked table games in Florida and notably expanded its gaming privileges in 2021. However, this expansion has not been without its disputes, particularly with Governor Ron DeSantis regarding the "hub-and-spoke" sports betting approach. This method's compliance with the federal Indian gaming statute is currently under appeal to the U.S. Supreme Court. The Tribe's sportsbook brand, Hard Rock Bet, made a notable reentry to the online market in December, amidst ongoing regulatory challenges, including the argument that pick'em fantasy sports games infringe upon their compact by allowing players to bet money against the house.
Regulatory Actions Beyond Florida
The regulatory scrutiny faced by DFS operators extends beyond Florida. For example, the Arkansas Department of Finance and Administration recently issued cease-and-desist letters to Underdog Sports and PrizePicks, urging them to stop providing "unlicensed sports betting" in the state. This move underscores that Arkansas is not "wide open" for unregulated fantasy sports operations, especially concerning games accessible to users under the age of 21.
DFS Regulation in Florida and Beyond
Florida remains one of several states with unclear regulations regarding DFS. An opinion from then-Attorney General Robert Butterworth in 1991 suggests that fees linked to fantasy sports contests may be considered gambling, a stance that predates the inception of the first DFS website by 16 years. Despite this uncertain regulatory landscape, DFS platforms have continued to serve Floridian users. Lawmakers in the state have deliberated on various proposals to formalize and regulate the industry more explicitly, but to date, neither legislative chamber has passed any such proposals. This ongoing uncertainty emphasizes the need for clear legal guidelines to navigate the complex intersection of traditional sports betting, fantasy sports, and digital gaming within the state and beyond.
As the situation unfolds, the decisions made by both regulatory bodies and legislative chambers will undoubtedly have profound implications for the future of fantasy sports and sports betting in Florida and other states grappling with similar regulatory challenges. The intricate balance between fostering innovation in the sports gaming sector and ensuring responsible gambling practices remains a crucial consideration for all stakeholders involved.