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The Battle for Daily Fantasy Sports in Florida

The legal landscape for Daily Fantasy Sports (DFS) in Florida has been marked by significant uncertainty and contention, particularly following the Florida Gaming Control Commission's (FGCC) issuance of Cease-and-Desist letters to leading DFS operators like PrizePicks and Underdog Fantasy in 2023.[1]  This move, grounded in the interpretations of Florida Statute Section 849, Chapter 14, has sparked a debate over the nature of DFS as a game of skill versus a game of chance, with substantial implications for the industry's future in the state of Florida.  Concurrent legislative efforts aim to clarify the legal framework within which DFS operates, proposing a distinction that could exempt DFS from traditional gambling regulations.

Traditional DFS, offered through mediums like DraftKings and Yahoo, allow participants to create virtual teams based on real athletes' performances in actual games for that night.[2]  However, this industry has seen exponential growth over the past decade, with new companies like PrizePicks and Underdog Fantasy emerging as major players for their nuanced approach to DFS.  PrizePicks and Underdog Fantasy allow users to place prop bets on players' performances nightly or throughout the season.[3]  These sites have been scrutinized recently for their similarities to traditional sports gambling.  Despite their success, the legal challenges posed by the FGCC's recent actions have put these companies at a crossroads, highlighting the need for clear regulatory guidance.

The contention primarily revolves around the classification of DFS under Florida law.  Florida Statute Section 849, Chapter 14, broadly defines gambling as any game of chance, including those where random or uncontrollable factors determine outcomes.[4]  The FGCC's application of this statute to DFS contests, which the operators argue are skill-based, has led to a significant legal dispute.  This dispute not only threatens the viability of DFS operations in Florida but also raises questions about the appropriate regulatory framework for these activities.[5]

In response to the regulatory challenges faced by DFS operators, proposed legislation in Florida seeks to redefine the legal standing of DFS by explicitly distinguishing it from traditional forms of gambling.[6]  This initiative reflects a growing recognition of the skill-based nature of DFS contests, which rely on participants' knowledge of sports, analytical abilities, and strategic planning rather than mere chance.  By exempting DFS from the state's gambling laws, the proposed legislation aims to create a regulatory environment that supports the continued operation and growth of DFS platforms in Florida.  This legal distinction is crucial for safeguarding the future of DFS in the state, ensuring that these contests are not unjustly subjected to the constraints and penalties associated with gambling activities.

The debate over whether DFS contests are games of skill or chance is not unique to Florida.  Across the United States, various jurisdictions have grappled with this question, leading to a patchwork of regulatory approaches.  Legal precedents, such as the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA), provide a federal framework that exempts fantasy sports from the definition of online gambling, provided they meet certain criteria, including an outcome that reflects the relative knowledge and skill of the participants.[7]  This federal recognition of the skill-based elements of fantasy sports contests has informed the debate in Florida, underscoring the argument that DFS should not be classified as gambling under state law.[8]

The proposed Florida legislation seeks to align state law with the federal understanding of DFS as a skill-based activity, thereby providing a legal safe harbor for operators.  This effort reflects a broader trend towards recognizing and accommodating the unique characteristics of DFS within the legal and regulatory landscape.[9]

The issuance of Cease-and-Desist letters to DFS operators in Florida has highlighted the urgent need for legal clarity and reform in the regulation of fantasy sports.  The proposed legislation represents a pivotal effort to resolve the ambiguities surrounding the industry, offering a framework that acknowledges the skill-based nature of DFS and distinguishes it from gambling.  As this legislative process unfolds, the engagement of stakeholders—including operators, legislators, and the legal community—will be critical in shaping a regulatory environment that supports the sustainable growth of DFS in Florida.


[1] Sam McQuillan, Florida Orders PrizePicks, Fantasy Sports Outfits To Stop Taking “Illegal Bets,” Legal Sports Report (Sep. 22, 2023), https://www.legalsportsreport.com/138204/florida-orders-prizepicks-fantasy-sports-outfits-to-stop-illegal-bets/ (last visited Feb 9, 2024).

[3] See generally PrizePicks | Daily Fantasy Sports Made Easy, https://www.prizepicks.com/ (last visited Feb 9, 2024); Underdog Fantasy: Pick’em and Season-long Fantasy for NFL, NBA & more, https://underdogfantasy.com/ (last visited Feb 9, 2024).

[4] Fla. Stat. § 849.14

[5] Stephanie Feeley, Florida Regulator Issues Cease-and-Desist Letters to Underdog Sports, PrizePicks and Betr, Gaming America https://gamingamerica.com/news/8713/florida-regulator-issues-cease-and-desist-letters-to-underdog-sports-prizepicks-and-betr (last visited Feb 9, 2024).

[6] Sam McQuillan, Pick’Em Apps Pleased WIth Florida Daily Fantasy Sports Bill, Legal Sports Report (Dec. 7, 2023), https://www.legalsportsreport.com/153972/will-florida-daily-fantasy-sports-bill-boost-underdog-prizepicks/ (last visited Feb 9, 2024).

[7] See 31 U.S.C. §§ 5361- 5367.

[8] McQuillan, supra note 1

[9] McQuillan, supra note 6

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