Senate passes fantasy sports regulations over DraftKings’ and FanDuel’s fears

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DraftKings and FanDuel want to make sure they're grandfathered in until they get permitted.

A Senate panel has given the first approval to a proposed Fantasy Sports Contest Amusement Act to regulate fantasy sports gaming in Florida.

By a 16-2 vote, the Senate Appropriations Committee passed the bill (SB 16A) Monday, its first and final approval before it is ready for the full Senate to consider it. A similar measure (HB 9A) passed the House the same day.

Under an addendum to the Gaming Compact Gov. Ron DeSantis and the Seminole Tribe signed Monday, the sports gaming provisions would be delayed until Oct. 15.

The laws on paid fantasy sports contests have been fuzzy, so companies like DraftKings and FanDuel have been operating at some level in Florida for years, even though they have no overt authority. The Compact and the Legislature’s package would hand fantasy sports games to the Seminole Tribe while leaving the door open for the existing industry to collaborate with the Tribe.

The Tribe would control the front end of any sports betting app in Florida. Existing industry leaders could contract to run the back end of the app.

An estimated 3 million Floridians play fantasy sports today, according to Scott Ward, an attorney representing DraftKings and FanDuel.

Those industry leaders are requesting a grandfather clause to keep them operating until they can get permitted to operate. They would happily accept regulations, Ward added.

“We would want it to be in a way that we continue to offer the high quality service that we offer now for Floridians, and so that’s why we’re opposed to this bill currently,” he said.

Protecting consumer data privacy was a priority of DeSantis and the Legislature in the Legislative Session that wrapped last month. However, the House and Senate weren’t able to reach an agreement on the process for litigating violations of the proposal and the measure died.

The House includes some data protections while the Senate version does not. Hutson told reporters that would be hammered out in negotiations this week.

And in his view, the Tribe already has a framework for addressing addiction.

“We’re not going to micromanage the Tribe and how they do stuff,” Hutson said. “I’m not going to sit there and micromanage any contract. It’s something that they’re able to do. Other tribes have done that. I believe they have the ability to do that already.”

St. Petersburg Republican Sen. Jeff Brandes voted against the bill, along with Jacksonville Democratic Sen. Audrey Gibson. Brandes voted against all gaming measures that came before the committee Monday.

Central to permitting paid fantasy sports contests is the question of whether it constitutes gambling. DraftKings and FanDuel argue they are games of skill rather than games of chance. Hutson agrees, but he said he filed the bill during the “Gaming” Session to make sure the proposed Florida Gaming Control Commission doesn’t target them.

“Maybe different attorneys will disagree with me, but I think at the same time I want to make sure that those that are operating this and those that are participating in this can continue to participate going forward,” Hutson said.

The Compact would enable the Seminoles to serve as a hub for online sports betting, with pari-mutuel operators contracting with the tribe. Pari-mutuels would get to keep 60% of sports-betting revenue, with 40% going to the Seminoles. The tribe would pay the state up to 14% on the net winnings.

Online sports betting is not affected by the removal of a provision that could have led to legalizing other online wagering.

But opponents of the proposed compact maintain that the sports betting authorization violates a 2018 constitutional amendment, known as Amendment 3, which required statewide voter approval of future expansions of gambling.

Rep. Sam Garrison, a Fleming Island Republican who is co-sponsoring legislation to ratify the compact, told a House panel Monday that the sports betting provision could be problematic.

“There’s a legitimate question and legal question as to whether or not the sports gaming, with the hub-and-spoke model as contemplated in the compact, triggers Amendment 3,” Garrison, a lawyer, said. “It’s an open legal question. Period.”

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The News Service of Florida contributed to this post. Republished with permission.

Renzo Downey

Renzo Downey covers state government for Florida Politics. After graduating from Northwestern University in 2019, Renzo began his reporting career in the Lone Star State, covering state government for the Austin American-Statesman. Shoot Renzo an email at [email protected] and follow him on Twitter @RenzoDowney.



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