The Florida Gaming Control Commission issued letters to Betr, PrizePicks, and Underdog Sports on January 31, instructing each operator to exit the state within 30 days to avert potential legal consequences. Earlier in September, the FGCC had sent cease-and-desist letters to these three DFS sites for engaging in fantasy sports games, including pick'em style games. Some state regulators argue that these activities resemble unlicensed sports betting rather than legal fantasy contests.
However, legislative efforts are underway to exempt these operators from Florida's gambling regulations potentially. The legislative session concludes on March 8, making it an apparent final deadline for DFS operators to comply with the regulatory body's demands or leave the state.
We can confirm that we have reached a negotiated resolution with the FGCC to cease operating our current contests on March 1st.
PrizePicks spokesperson
Florida's Betting Scenario
Exiting the third-most populous U.S. state, Florida deals a considerable blow to each company. In Florida, legal digital sports betting is restricted to Hard Rock Bet, which introduced its sports betting app in late 2023.
With only one online sports betting operator in the state, there's ample opportunity for fantasy sports games to capture a market. The reasons why similar fantasy games by DraftKings and FanDuel haven't faced comparable regulatory scrutiny in Florida still need to be clarified.
Despite their exit from Florida, Betr, PrizePicks, and Underdog continue to operate in numerous other states, including California and Texas, the two most populous U.S. states, where legal sports betting is not currently permitted.
Impact on Operators and the Florida Gambling Industry
The Seminole Tribe maintains a monopoly on most house-banked table games in Florida, along with Las Vegas-style slot machines outside of Miami-Dade and Broward counties. In 2021, the Tribe expanded its gaming privileges, including craps, roulette, and both retail and online sports betting, through an amendment to its Class III gaming compact with Governor Ron DeSantis.
However, disagreements arose between the Seminoles and DeSantis regarding the "hub-and-spoke" approach, where internet-based bets are placed remotely but processed through sportsbook computer servers on Seminole land. The dispute over whether this approach complies with the federal Indian gaming statute is now under appeal to the U.S. Supreme Court.
Meanwhile, Hard Rock Bet, the Tribe's sportsbook brand, reentered the online scene in December. Officials from Hard Rock International, owned by the Seminoles, argue that pick'em fantasy sports games violate their compact since players bet money against the house.
Arkansas Following Close
Florida is not alone in addressing DFS operators. On Thursday, the Arkansas Department of Finance and Administration issued cease-and-desist letters to Underdog Sports and PrizePicks, urging both DFS sites to cease providing "unlicensed sports betting" in the state.
Regulatory Administrator Trent Minner stated in a press release, "Back in the day, places that tolerated illegal gambling were referred to as 'wide open.' The Internet is today's equivalent of a 'wide-open town,' where unlicensed gambling flourishes outside the taxation and age-verification requirements mandated by the law. As the state's regulator of licensed sports betting, DFA is putting these companies on notice that Arkansas is not 'wide open.'"
One of the concerns highlighted is that the games are accessible to users under the age of 21.
Florida is one of several states with unclear DFS regulations. A 1991 opinion from then-Attorney General Robert Butterworth implies that fees linked to fantasy sports contests may be considered gambling. However, this stance was articulated 16 years before the inception of the first DFS website, and these platforms have persisted in serving Floridians. Despite this, lawmakers have deliberated on various proposals to formalize the industry. To date, neither legislative chamber has passed any such proposals.
