The landscape of online fantasy sports and sports betting in Florida is undergoing significant changes, as demonstrated by recent actions taken by the Florida Gaming Control Commission (FGCC). On January 31, the FGCC issued stern letters to three prominent operators in the digital fantasy sports industry—Betr, PrizePicks, and Underdog Sports. These companies were instructed to cease their operations within the state by a 30-day deadline to avoid possible legal ramifications. This directive follows earlier cease-and-desist communications sent to the same entities last September, citing their involvement in fantasy sports games, including pick'em style contests, which some state officials believe closely mimic unlicensed sports betting activities.
Regulatory Challenges
The resemblance of certain fantasy sports games to sports betting has stirred controversy, leading to heightened regulatory scrutiny in Florida. While the operators contend their games are distinct from traditional sports betting, the FGCC's stance reflects a broader debate on the nature and regulation of these online platforms. This situation is further complicated by ongoing legislative efforts aimed at possibly exempting these operators from the stringent provisions of Florida's gambling laws, with discussions set to continue until the legislative session's scheduled conclusion on March 8.
In a recent development, PrizePicks confirmed reaching "a negotiated resolution with the FGCC to cease operating our current contests on March 1st." This decision underscores the significant impact of the FGCC's directive on the affected companies, particularly considering Florida's status as a lucrative market for legal digital sports betting, which is currently monopolized by Hard Rock Bet—a sports betting app launched by the Seminole Tribe in late 2023.
Market Dynamics and Legal Disputes
The exclusive operation of legal digital sports betting by Hard Rock Bet presents a unique challenge and opportunity for fantasy sports games operators, who aim to capture a share of the eager Florida market. However, the reasons behind the FGCC's selective regulatory actions, especially considering the continued operation of similar fantasy games by industry giants DraftKings and FanDuel without apparent legal issues, remain a subject of speculation and discussion within the industry.
Beyond Florida, Betr, PrizePicks, and Underdog maintain their operations across various other states, navigating the complex legal terrain that governs online sports betting and fantasy sports. In Florida, the Seminole Tribe holds the monopoly over most house-banked table games, a privilege that was expanded in 2021. However, the Tribe's "hub-and-spoke" sports betting model with Governor Ron DeSantis has sparked legal controversies, particularly regarding its compliance with federal Indian gaming laws—a matter now awaiting a decision from the U.S. Supreme Court.
Similar Regulatory Moves in Other States
Florida is not the only state taking a harder stance on certain forms of fantasy sports games. For example, the Arkansas Department of Finance and Administration recently issued its own cease-and-desist letters to Underdog Sports and PrizePicks, urging them to halt "unlicensed sports betting" operations within the state. According to Regulatory Administrator Trent Minner, "Arkansas is not 'wide open.'" This action signals increasing regulatory scrutiny in other jurisdictions, with particular concerns about underage access to these games.
Legal and Regulatory Uncertainty
Florida's regulatory landscape for daily fantasy sports (DFS) has long been marked by ambiguity. A 1991 opinion by then-Attorney General Robert Butterworth suggested that entry fees for fantasy sports contests could be classified as gambling—a position articulated well before the inception of modern DFS platforms. Despite this, DFS operators have continued to serve Floridians, navigating the uncertain legal environment while lawmakers have debated various proposals to regulate the industry. To date, these proposals have not resulted in solid legislative action, leaving companies and consumers in a state of limbo.
As the situation develops, the actions taken by the FGCC, alongside parallel efforts in states like Arkansas, underline the ongoing tensions between regulatory bodies and the burgeoning digital sports betting and fantasy sports industries. With potential legislative changes on the horizon, the industry remains watchful of how these developments could redefine the operational and legal boundaries for such platforms in Florida and beyond.