State regulator orders three operators to exit Florida betting market

The Florida Gaming Control Commission has issued cease-and-desist orders to PrizePicks, Underdog Fantasy, and Betr, targeting their “pick’em” fantasy sports games as illegal under state gambling law.

The Florida Gaming Control Commission (FGCC) issued cease-and-desist orders to three companies operating fantasy sports games, ordering the trio to stop offering certain types of fantasy sports contests, by March 1, 2024.

The FGCC informed PrizePicks, Underdog Fantasy, and Betr on January 31 that they have 30 days to halt their operations in Florida or face potential legal action from the state Attorney General’s Office of Statewide Prosecution.

The orders specifically target the “pick’em” style games offered by these companies, which the FGCC argues violate Florida’s gambling laws. Such games allow players to wager on whether their chosen sports teams will score above or below a point threshold set by the operators, a format that the commission says does not comply with state regulations that permit peer-to-peer fantasy sports contests.

“If this cessation is completed within that timeframe, the Commission will deem the company and all its officials, directors, and employees have complied with the demands of the cease-and-desist order, and the Commission will not take further action, including referral to the Office of Statewide Prosecution or to any State Attorney,” the agency wrote in its letter to Betr.

The FGCC initially sent cease-and-desist notices to the companies in September, citing illegal sports betting activities through props-style daily fantasy sports.

The Capitolist reporting in December that despite issuing letters to the three daily fantasy sports operators in September, the FGCC has refrained from taking similar action against DraftKings, spotlighting a potentially selective approach in the enforcement of regulations within Florida’s sports wagering industry.

DraftKings, a major player in the broader betting landscape, verified to The Capitolist that it had not been issued a cease-and-desist letter by the FGCC. The notices accused the companies of potentially engaging in illegal sports betting activities within Florida through their offering of props-style daily fantasy sports.

“We can confirm that we have not received any communication of this nature from the Florida Gaming Control Commission,” a DraftKings spokesperson said.

In sending the cease-and-desist notices to the trio of companies, the FGCC contended that hosting fantasy-style betting platforms contravenes Florida statute, and refers to its offering as “strictly prohibited” and permissible only under a gaming compact.

Moreover, the Commission’s move seems to extend beyond just daily fantasy games. Emails obtained by News Service of Florida suggest that the legal conclusions of the letters apply to all forms of paid fantasy sports contests. As of this writing, DraftKings purports on its website that daily fantasy sports betting is legal in Florida.

The dispute over fantasy sports also comes as the Seminole Tribe has moved forward with online sports betting.

Under a deal signed in 2021 by Gov. Ron DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola Jr., and ratified by the state’s lawmakers, the tribe secured exclusive rights to offer sports betting, including betting through mobile devices, across the state. This means bets can be made from anywhere in Florida using mobile apps, with the operations based on tribal land. In return for these exclusive rights, the tribe promised to pay Florida at least $2.5 billion within the first five years of the agreement. The deal also allows the tribe to partner with existing racing and gaming facilities to offer sports betting and to expand their casino games to include craps and roulette.

Following The Capitolist’s reporting, News Service of Florida reported that Sen. Joe Gruters sought clarification as to why the three operators could be breaking the law while the biggest players in the industry aren’t. The senator raised the issues in a Dec. 18 letter to the commission’s executive director, Lou Trombetta.

“The letters definitively state that ‘betting or wagering on the result of contests of skill … including fantasy sports betting, is strictly prohibited and constitutes a felony offense.’ Notably, however, the commission’s public position is less definitive. In the FAQs (frequently asked questions) on the commission’s website, the commission states that ‘wagering on fantasy sports’ is ‘probably not’ legal. I am concerned that the commission is applying an interpretation that is not supported by law and that the commission may be selectively enforcing its interpretation,” Gruters wrote, as reported by News Service of Florida.

Meanwhile, a pair of Senate committees have advanced the Fantasy Sports Contest Amusement Act, which proposes to regulate fantasy sports contests within the state.

The measure, introduced by Sen. Travis Hutson, seeks to authorize fantasy sports contests for individuals aged 21 and over in Florida. The bill categorizes these contests as games of skill, thereby distinguishing them from traditional gambling.

“What our bill does is define what daily fantasy sports are, and how individuals can participate in that,” said Hutson.

If the legislation is adopted, fantasy sports contest operators would be required to obtain licenses from the Florida Gaming Control Commission, bringing the entities and their activities under state oversight, with the Commission responsible for enforcing compliance with the act, conducting investigations, and monitoring the operation of these contests.

This article is a reprint from The Capitolist. To view the original story, comment and share, click here.

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