Florida Daily Fantasy Sports Operators Served Cease and Desists By Regulators

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The Florida Gaming Control Commission has taken a firm stance against some operators of daily fantasy sports in the state, issuing cease-and-desist letters to three companies.

These letters accuse the operators of potentially offering unregulated mobile betting games and threaten legal action if they don’t immediately halt their operations. The targeted companies include Underdog Sports, Prize Picks, and a recent market entrant, Jake Paul-backed Betr.

The letters explicitly instruct these companies to cease offering sports betting in Florida, and to stop promoting or conducting illegal lotteries.

Furthermore, they are prohibited from offering cash or other incentives to entice Florida residents to participate in illicit bets or wagers on their platforms.

Interestingly, the two biggest U.S. online sportsbooks, FanDuel and DraftKings, were issued no such letters despite offering daily fantasy sports in the Sunshine State.

Parlay-Prop-Style Games Under Scrutiny

The Commission’s primary concern revolves around the “parlay-prop-style” games offered by these companies, which closely resemble sports-betting games, an activity that is prohibited in Florida.

Commission Executive Director Lou Trombetta, writing the letter, emphasized that these companies appear to have ventured into the realm of sports betting.

“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,” the letter said.

Underdog Sports founder Jeremy Levine rejected the letter’s conclusions.

“We strongly disagree with their assessment. We will continue operating our fantasy contests in Florida as we engage with the Commission and elected officials,” he said in a social media post.

Seminole Compact and Legal Challenges

The state of Florida’s gambling laws has been a contentious topic recently.

The Seminole Tribe of Florida, owners of the global brand Hard Rock International, have been in a lengthy legal battle for their right to launch their newly branded Hard Rock Bet sportsbook in their home state.

In 2021, they signed a new compact with the state. This allowed the tribe exclusive control over online sportsbooks, although there was no mention of Florida retail sportsbooks.  

The compact did allow operators to run fantasy sports contests, but it delineates exclusive sports betting rights for the Seminoles.

However, the compact has faced legal challenges.

West Flagler Associates, which operate a series of casino card rooms in Florida, filed a lawsuit contesting the compact. They argue that the agreement violates federal law and could have a detrimental impact on their operations.

These owners recently filed a motion indicating their intention to seek the U.S. Supreme Court’s intervention, and also are also looking at a new angle in state courts. They are potentially set to argue that Florida’s constitution could rule out the new gaming compact.

Bad News for Betr

In this latest case of Florida gambling controversy, the regulator did specifically back up the Seminoles position, while writing their cease-and-desist to the daily fantasy operators.

“Accordingly, in Florida, sports betting may be lawfully conducted only pursuant to a gaming compact,” it said.

It remains to be seen if Betr and Prize Picks will follow suit with Underdog Sports in continuing their services while mounting a legal challenge. That could be trouble for Betr.

The sports betting app backed by social media star Jake Paul, which only launched daily fantasy sports services earlier in 2023, is struggling for market share nationally. In Massachusetts in August the operator made just $11,000 in revenues, coming in dead last in handle and hold among Massachusetts online sportsbooks.

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