The Florida Gaming Control Commission sent cease and desist letters to three daily fantasy sports operators last week. In the letters, the commission alleges the companies have been conducting unlawful fantasy sports or lottery activity in the state.
The letters were mailed to:
- Betr Holdings, Inc.
- SidePrize LLC (doing business as PrizePicks)
- Underdog Fantasy Sports
Florida is one of the most populated states that has yet to legalize sports betting or online casinos. Daily fantasy sports, while not technically legal in Florida, has been allowed to exist in The Sunshine State.
That could be changing.
Letters apparently related to compact between Seminoles and state
Florida daily fantasy sports exist in a legal “gray area.” The state constitution does not specifically address daily fantasy sports (DFS). An opinion by a Florida attorney general in 1991 suggested it might be illegal. However, his opinion only addressed season-long leagues, not daily sports. Currently, it’s estimated that millions of Floridians play DFS.
In its cease-and-desist letters, the Florida Gaming Control Commission (FGCC) writes that under Florida law, “sports betting may lawfully be conducted only pursuant to a gaming compact,” in reference to a sports wagering deal made between the state and the Seminole Tribe of Florida.
That compact is currently being challenged in federal courts. The tribe recently won an appeal that would have allowed it to offer sports betting in Florida once again. The Seminoles had briefly offered sports betting through the tribe’s Hard Rock Bet Florida app in 2021.
Unfortunately, that action was blocked after the Florida parimutuel suing over the compact filed a motion to stay the mandate.
Is DFS a game of chance or a game of skill?
The letters state that “betting or wagering on the result of contests of skill, such as sports betting, including fantasy sports betting, is strictly prohibited and constitutes a felony offense unless such activity is otherwise exempted by statute.”
Underdog, Betr, PrizePicks and others in DFS have long argued that fantasy sports is not a game of skill. Thus, it exists outside the constraints of laws designed to regulate sports betting.
The FGCC doesn’t seem to care if DFS utilizes skill or chance. In its letters, it states that “Lotteries are also strictly prohibited in Florida.” In that regard, regulators are claiming that DFS is a game of chance, and thus a lottery, which is also illegal.
Letters were not sent to top DFS operators in FL
It’s interesting that the country’s two largest DFS operators, DraftKings and FanDuel, did not receive letters, according to reports by the Associated Press. The two are the most popular DFS operators in Florida.
Ryan Linnehan of Acadia Financial Protection wrote on X, formerly known as Twitter, that an attorney representing Underdog Fantasy Sports told him that the FGCC admitted it had not sent letters to any other DFS companies.
“The commission staff confirmed that the language in the letter broadly applies to all paid fantasy sports contests and they are not aware of any paid fantasy sports company operating legally in Florida,”
DFS operators have done business in other states where sports betting is not legal. The letters sent last week to the DFS gaming companies indicates that FL intends to protect the Seminole compact by eliminating all FL sports betting activity it deems illegal.
