Florida Gaming Control Commission Intensifies Crackdown on Fantasy Sports Operators
The Florida Gaming Control Commission (FGCC) has intensified its crackdown on unregulated fantasy sports operators within the state. On January 31, Betr, PrizePicks, and Underdog Sports received formal notifications instructing them to cease their operations in Florida within a 30-day window or face legal repercussions. This decision stems from concerns that the fantasy sports games offered by these entities bear a close resemblance to unlicensed sports betting activities, prompting the state to take action.Previous Warnings and Legislative Challenges
This is not the first instance these operators have caught the attention of the FGCC. In September, the commission had already issued cease-and-desist letters to these three daily fantasy sports (DFS) sites for their involvement in offering fantasy sports games, including popular pick'em style games. The persistent stance of the FGCC points to a broader regulatory concern regarding the fine line separating fantasy sports from gambling.
Interestingly, there are ongoing legislative efforts aimed at providing these operators a reprieve from the stringent gambling regulations in Florida. The legislative session expected to address this issue concludes on March 8, suggesting a tight timeframe for any potential legislative remedy that could alter the landscape for DFS operators in the state.A Negotiated Exit and Market Impact
As part of a negotiated resolution with the FGCC, a spokesperson for PrizePicks confirmed that they agreed to halt their current contests in Florida by March 1. The departure of these platforms from Florida marks a significant blow to their business, given the state's potential market size for fantasy sports games. Currently, statewide legal digital sports betting is exclusively available through Hard Rock Bet, which launched its sports betting app in late 2023. This monopoly offers a glimpse into the untapped market for fantasy sports within Florida, raising questions about the uneven regulatory scrutiny faced by different operators.Complex Regulatory Landscape
Florida’s gambling infrastructure is notably influenced by the Seminole Tribe, which holds a monopoly on most house-banked table games within the state. In 2021, the Tribe expanded its gaming privileges under a compact that has since been subjected to legal scrutiny over its compliance with federal Indian gaming statutes. This dispute, notably involving the "hub-and-spoke" sports betting model, is currently pending before the U.S. Supreme Court.
Furthermore, the FGCC’s actions against Betr, PrizePicks, and Underdog are not isolated. Arkansas has also moved against these platforms, issuing cease-and-desist letters against Underdog Sports and PrizePicks, urging them to stop providing "unlicensed sports betting" within its jurisdiction. Trent Minner, a Regulatory Administrator, emphasized that Arkansas is not "wide open" for such operations, highlighting concerns over accessibility to users under the age of 21.Unclear Regulations and the Path Forward
The regulatory context for DFS in Florida—and indeed, several other states—remains murky. A 1991 opinion by then-Attorney General Robert Butterworth suggested that fees associated with fantasy sports contests could be construed as gambling. This interpretation predates the inception of the first DFS website by over a decade and underscores the regulatory ambiguity that has allowed DFS platforms to continue operating in Florida.
Efforts have been made by lawmakers to clarify the legal standing of DFS through proposed legislation, but to date, no definitive action has been taken to formalize the industry’s status within the state. This legislative inaction, coupled with the recent push by the FGCC against certain DFS operators, underscores the complex and evolving landscape of gambling and fantasy sports regulation in Florida.
As the March 1 deadline for the cessation of operations approaches, the departure of Betr, PrizePicks, and Underdog from Florida will certainly impact the state's fantasy sports market. However, it may also prompt a more definitive legal and legislative discussion concerning the regulation of fantasy sports and its distinction from traditional gambling. With the legislative session drawing to a close, the coming weeks could be pivotal in shaping the future of fantasy sports in Florida and potentially setting a precedent for other states grappling with similar regulatory challenges.