For those following the state of Fantasy Sports in Florida, it is quite apparent that entering the market continues to be fraught with uncertainty and risk. Last September, Mr. Lou Trombetta, the Executive Director of the Florida Gaming Control Commission (“GCC”), sent cease and desist letters to three companies that were allegedly “offering and accepting illegal bets or wagers” from Florida State residents. All three companies offer a variety of fantasy sports contests, with one particular style, known as “parlay-prop-style” games, drawing the ire of the GCC.
On December 17, 2023, Senator Joe Gruters, sent a letter to Mr. Trombetta asking the GCC to clarify the status of Florida’s fantasy sports regulations. Senator Gruters also inquired as to why DraftKings and FanDuel, the two largest fantasy sports operators in Florida, were not also asked to cease operations last year.
The online sports betting landscape in Florida was already in a state of disarray following recent rulings from the United States Supreme Court and Florida Supreme Court. Unfortunately, the same uncertainty could also overshadow fantasy sports operations in Florida until further court rulings or regulatory guidance clarifies its legality.
The Legality of Florida Fantasy Sports Under Current Regulations
Over the past year and a half or so, a style of fantasy sports contests, based on betting the “over” or “under” on certain individual athlete’s statistics, has been popularized by companies, such as Underdog Sports and PrizePicks. Customers often choose a combination of athletes’ statistics to assemble a “parlay-prop” ticket, adding more performance thresholds in exchange for a greater potential payout.
Mr. Trombetta’s letters to the three fantasy sports operators state that:
Under Florida law, 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 . . . . Accordingly, in Florida, sports betting may be lawfully conducted only pursuant to a gaming compact . . . . Further, receiving such illegal bets and wagers and aiding or abetting such criminal activities constitute separate felony offenses . . . . Lotteries are also strictly prohibited in Florida.
To clarify, Florida State gambling laws, codified at Chapter 849 of the Florida Statutes, do not specifically mention fantasy sports by name. Meanwhile, the GCC’s website provides, in answers to FAQs, that wagering on fantasy sports is “probably not” legal. As Senator Gruters’ letter suggests, further legislation may be necessary to address the legality of Florida fantasy sports and reconcile disparate state regulations. As our readers are aware, the same fantasy operators were also sent cease and desist letters by the New York State Gaming Commission. However, newly passed New York regulations specifically outlaw the type of contests offered by these companies.
Senator Gruters also spoke with Mr. Trombetta and inquired as to why DraftKings and FanDuel, the two largest fantasy sports operators in Florida, were not targeted. While Mr. Trombetta informed Senator Gruters that letters to DraftKings and FanDuel were forthcoming, DraftKings represents that, as of mid-December, it has yet to receive any notification of a violation under Florida State law. In fact, DraftKings represents on its website that daily fantasy sports is legal in Florida. Perhaps DraftKings and FanDuel have been perceived to operate within the tenuous regulatory lines because of the style of fantasy sports games that they offer. While Underdog Sports popularized the “parlay-prop” bet, DraftKings offers competition pools in which customers pay entry fees and manage their fantasy sports teams composed of athletes from multiple professional sports organizations with the opportunity to win a cash prize. In these traditional fantasy sports contests, customers compete against one another, and not against the “house.” This structure comports with a House bill, filed last November, that proposes significant changes to Florida’s gambling laws.
Why is the Current State of Fantasy Sports in Florida Relevant to Your Business?
While Mr. Trombetta’s cease and desist letters take a firm position on fantasy sports betting, a close examination of the Florida Statutes does not provide such a clear picture. As Senator Gruter’s letter to the GCC points out, even the GCC’s own website does not provide a concrete answer as to what is acceptable game play. Fantasy sports operators may nevertheless decide to take the plunge. After all, Florida is potentially one of the largest sports betting markets in the nation, with one projection predicting that Florida will surpass $10 billion in annual sports wagering after its third year of legalization. If your company chooses to enter the Florida market, it is very important to stay compliant with rapidly-changing regulations, Attorneys General opinions, and gaming commission positions.
The attorneys at Klein Moynihan Turco are constantly monitoring evolving fantasy sports and sports wagering regulations so that clients remain compliant with applicable state and federal laws.
If you require assistance with fantasy sports law compliance, please email us at info@kleinmoynihan.com or call us at (212) 246-0900.
The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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