Q&A of the Day – Fantasy Sports Crackdown in Florida
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Today’s Entry: @brianmuddradio I just heard Prize Picks can’t operate in Florida any longer. Is this true? Also is there any risk of not getting money back from the app?
Bottom Line: Yes, to the first question and no, to the second. I’ll explain what’s going on here as the confusion over what’s currently considered legal sports betting and what isn’t considered legal has taken another significant turn. The development happened January 31st, however, just became more widely known over the past week as additional details have emerged due to a key upcoming date.
On January 31st the Florida Gaming Control Commission, which provides regulatory oversight for all gambling related activities within the state, served three fantasy sports operators, which have allowed Floridians to play fantasy sports for money, with a notice to cease-and-desist operations within the state by March 1st due to a violation of state law. Those operators are PrizePicks, Underdog Fantasy and Betr. Interestingly, DraftKings which also operates fantasy sports for stakes within the state, hasn’t been served. According to The Capitalist, this appears to be due to the specific way peer-to-peer fantasy sports contests are taking place with the three operators that have been served notice.
Since the onset of the Seminole Compact in 2021 between the state of Florida and the Seminole Tribe, there has frequently been more confusion about what is and isn’t legal within the state than actual sports betting of any sort taking place. The Compact legalized sports betting, however, it has been and remains the subject of legal challenges at the state and federal level. Aside from the Seminole Tribe briefly offering sports betting in November of 2021 through their app until being shut down by a federal court order, before turning it back on late last year following a federal appeals court ruling which overturned the lower court’s decision, there’s been additional questions about what is and isn’t legal with sports betting offshoots like fantasy sports. There are also questions, given the Seminole Tribe’s exclusivity on sports betting within the state, about what third party operators are and aren’t allowed to offer even if all services were deemed to be legal. In other words, it remains a murky landscape which is being attempted to be navigated by regulators, operators and the legal system simultaneously. This has led to a bit of the “wild west effect” playing out in the space in Florida while sports betting operators are commonly now offering services until they’re being told otherwise by regulators as is the case with PrizePicks, Underdog and Betr. With that said there are two significant developments on the horizon addressing these issues. One at the state level and another at the federal level.
One of the legislative items being taken up in the current state legislative session is the Fantasy Sports Contest Amusement Act which is aimed at addressing the many questions that exist about Fantasy sports operations for stakes within the state. According to the state’s analysis here’s what’s achieved through the bill if signed into law:
- SB 1568 creates the Fantasy Sports Contest Amusement Act, which authorizes the offering of fantasy sports contests by contest operators to persons 21 years of age or older, and provides fantasy sports contests, as defined in the bill, involve the skill of contest participants.
- The bill also authorizes the offering of fantasy sports contests by non-commercial contest operators, provided participants pay an entry fee and be 21 years of age or older. A noncommercial contest operator must pay all entry fees to participants as prizes, and may not pay fantasy sports contest prize monies exceeding $1,500 per season or $10,000 annually.
- Contest operators other than noncommercial contest operators must be licensed by the Florida Gaming Control Commission (commission) and meet the requirements specified in the act for fantasy sports contests. The commission must enforce and administer the act, investigate and monitor the operation and play of fantasy sports contests, and may deny, suspend, or revoke any licenses for violation of state law or rule.
It would appear that if this bill were to become law all three operators which were served cease-and-desist orders would have an opportunity to reenter Florida provided they follow the licensing requirement laid out in the legislation. The bill has passed two senate committees unanimously and appears on track to sail through the senate. Its companion in the House was just filed yesterday in the state session – which is an indication that the House is ready to take it up in the final few weeks of the session once the senate has passed it through. Should it pass and be signed into law by Governor DeSantis it would take effect July 1st, meaning that it appears those three operators will be out of the Florida market from March 1st through June 30th at a minimum. As for what’s doing at the federal level...
The biggest ball of wax remains whatever will be with the Seminole Compact itself. The interests challenging the Compact at the federal level officially appealed the U.S. Appellate Court’s decision to uphold the Compact last Thursday. There are three possible outcomes. The Supreme Court could choose not to take up the case allowing the lower court ruling to stand – which would put an end to the federal legal challenges to the Compact. The Supreme Court could choose to take it up and could obviously rule up or down on it during their current session which ends June 30th – perhaps not so coincidently at the same timeline as the new state law for fantasy sports. So, there’s that. After years of starts and stops with sports betting services there’s likely to finally be clarity come July 1st one way or another.
As for money you may have with any of the services being shut down in Florida... There’s no indication that you should have any issues obtaining it from the operators. The state is also not looking to hold users accountable for using the services.