January 13, 2017
This week a Florida State Senator introduced proposed revisions to the State’s gaming laws intended to, among other things, regulate fantasy sports within the State of Florida. The bill proposes enacting the Fantasy Contest Amusement Act, intended to address fantasy sports contest-related consumer protection issues, with oversight responsibility to be vested in an envisioned Office of Amusements within the Department of Business and Professional Regulation.
What are the key components of the Florida fantasy sports regulations?
The proposed Florida fantasy sports regulatory scheme includes mandates for, at a minimum, the following:
- Licensure requirements, with an initial license application fee of $500,000 and an annual license renewal fee of $100,000;
- Significantly, the bill envisions lower fees for smaller contest operators which would not exceed 10% of the total entry fees collected by the applicable operator from Florida residents (it remains to be seen, however, how this mechanism will be enforced for new applicants with no prior presence in the State of Florida);
- Requirements that contest operators provide evidence of a $1 million surety bond, payable to the State;
- Implementation of procedures intended to protect consumers, including minimum age requirements, limitations on the number of entries that participants can submit to a single contest, and segregation of participants’ funds from operating funds;
- Restrictions on certain operator and employee conduct, including prohibitions against participation in contests; and
- Requirements for operators to submit to annual independent third-party audits.
While compliant contests would be deemed games of skill and, thus, exempt from prohibitions against unauthorized gaming, transgressors run the risk of violating the State’s gaming with penalties of up to $5,000 per violation.
The Ongoing Need for Fantasy Sports Lawyers: Keeping Florida Fantasy Sports Ventures Compliant
Fantasy sports contests and the laws and regulations that govern them, continue to grow and evolve. Between various legislative efforts across the country affecting the industry, conflicting opinions from attorneys general and court challenges to newly-enacted legislation, it is clear that the legal landscape of the fantasy sports space is far from settled. Against this backdrop, it remains imperative to engage a competent fantasy sports lawyer to become/remain compliant with applicable law when setting up and operating fantasy sports contests.
If you are interested in learning more about this topic or pursuing a fantasy sports venture, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
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