In a significant move, the Florida Gaming Control Commission (FGCC) has issued letters to three prominent fantasy sports sites, Betr, PrizePicks, and Underdog Sports, on January 31. These operators were instructed to exit the state within 30 days, or else they could potentially face legal consequences. This development comes on the heels of cease-and-desist letters sent by the FGCC to these same three DFS sites in September.
Understanding the Controversy
The core concern revolves around the nature of fantasy sports games, including pick'em style games, offered by these operators. State regulators have argued that such activities resemble unlicensed sports betting, a viewpoint that has sparked considerable debate. Evidently, the state's regulatory body is cracking down on what it perceives as breaches of Florida's gambling laws.
Efforts are currently underway in the legislature to potentially exempt these operators from the state's gambling regulations. However, the legislative session is set to conclude on March 8, leaving a window of uncertainty for these companies. In light of the FGCC's action, PrizePicks has confirmed that it reached a negotiated resolution with the commission to discontinue its current contests in Florida from March 1st onwards.
Impact on the Operators
Exiting the Florida market represents no small ordeal for these companies. Florida, known for its vigorous prohibition of digital sports betting—with the exception being the Hard Rock Bet—presents an inviting market for fantasy sports games. The introduction of the Hard Rock sports betting app in late 2023 underlines the potential for significant competition, yet also underscores the barriers faced by companies in navigating the legal complexities of the sports betting landscape.
It is noteworthy that similar fantasy games offered by entities like DraftKings and FanDuel have not encountered the same level of regulatory scrutiny in Florida. The lack of clarity behind this disparity raises questions about the standards applied by state regulators in determining what constitutes unlicensed betting.
Wider Operations and the Role of the Seminole Tribe
Despite these challenges in Florida, Betr, PrizePicks, and Underdog continue to operate in numerous other states, underscoring their national presence in the fantasy sports domain. In Florida, the Seminole Tribe holds a monopoly over most house-banked table games, following an expansion of its gaming privileges in 2021. This monopoly, however, has been the subject of dispute, particularly concerning the "hub-and-spoke" betting approach adopted by the Seminoles and Governor Ron DeSantis—a matter now under appeal to the U.S. Supreme Court.
Moreover, Hard Rock Bet, the Tribe's sportsbook brand, re-entered the online betting scene in December, further entrenching its position in the state's gaming ecosystem. The contention that pick'em fantasy sports games violate the Tribe's compact by allowing players to bet money against the house further complicates the regulatory landscape.
Concerns Beyond Florida
The regulatory challenges for DFS sites extend beyond Florida. On Thursday, the Arkansas Department of Finance and Administration issued cease-and-desist letters to Underdog Sports and PrizePicks, urging them to halt what was termed "unlicensed sports betting" within the state. Trent Minner, a Regulatory Administrator, emphasized that Arkansas is not 'wide open' for such activities, pointing to concerns over the accessibility of games to users under the age of 21.
As Florida joins a handful of states grappling with unclear regulations regarding DFS, the situation echoes a longstanding debate. A 1991 opinion from then-Attorney General Robert Butterworth suggested that fees linked to fantasy sports contests could be considered gambling—a contention made 16 years before the launch of the first DFS website. Despite such legal contentions, DFS platforms have continued to serve Floridians, though legislative efforts to formalize the industry have yet to result in passed proposals.
As the landscape of fantasy sports and online betting continues to evolve, both operators and regulators are navigating a complex web of legal, ethical, and business considerations. The tension between expanding access to fantasy sports games and safeguarding against unlicensed betting captures the broader challenges of regulating digital gaming platforms in an era of rapid technological change.