The Legislature’s rejection of a fantasy sports bill turned out to be just what the fantasy sports business needed.
Officially, the big fantasy sports companies such as FanDuel, DraftKings, and Bet MGM lost big, twice, in the Special Session, when the Legislature refused to come up with a regulatory framework and then handed sports betting to the Seminole Tribe of Florida as a monopoly. Yet the Seminole Compact also gave fantasy sports what it needed.
The Seminole Compact now explicitly defines fantasy sports, saying they are games of skill, not games of chance.
That means the unregulated, yet unauthorized business that’s been operating for many years in Florida now is officially defined by the state of Florida, because the Legislature ratified the Compact, and Gov. Ron Desantis signed it. With that, the businesses can continue to do what they’ve been doing without the previously lingering fear that some rogue State Attorney or crusading Attorney General might try to charge operators with practicing a form of unauthorized, regulated gambling.
At least that’s how some observers are interpreting what went down in the Special Session on gaming.
“You can have fantasy sports; it’s not regulated. So that’s a very good thing,” said lobbyist Brian Ballard, president of Ballard Partners, whose clients include some fantasy sports interests. “They’re allowed to operate. You don’t have to run fantasy sports through the Tribe. The Tribe can offer fantasy sports. But you can offer fantasy sports, an operator can operate in Florida and not be in violation of the Compact.”
And with the failure of the fantasy sports bill, those businesses can operate in Florida without being regulated or taxed.
“I don’t think within the industry is changed at all. It’s something that’s just not regulated,” said Jill R. Dorson, managing editor at SportsHandle.com, a leading news and information medium in the industry.
What’s more, the commercial fantasy sports operators -— whose games are called daily fantasy sports — should have an advantage over the Seminole Tribe, should the Tribe decide to offer fantasy sports games. The Tribe can only do gaming business with people at least 21 years old, and that presumably would apply to any fantasy sports gaming. But with no state regulation, there’s no age restriction on fantasy sports in general, so the commercial operators can open their market to college-age and younger.
It’s possible the Seminole Tribe won’t bother.
“Most tribes don’t even do fantasy sports. I don’t know of a single tribe that offers it,” Dorson said.
Two bills attempting to add fantasy sports to the gaming package the Legislature approved last week, SB 16A and SB 18A, died largely because of fighting between the chambers about what should or shouldn’t be included in the regulations. The fantasy sports companies just wanted to make sure nothing in legislation would disrupt their business even for a matter of weeks or months, as that would have wiped out a lot of business already in their books. No bill, no disruption.
“In essence by this Compact, which is a public agreement by the state of Florida, you acknowledge the existence and verify that fantasy sports are not gambling, which is a big deal for us,” Ballard said. “And there’s no restriction on the number of operators that can be from outside. And by not passing a regulatory bill, there’s no fees, no regulatory structure. It just allows the status quo. So basically what they were doing before, they can continue to do without the threat of someone trying to shut them down or the Tribe saying this is a violation of the Compact.”
Across the country, for the most part, daily fantasy sports are not defined as gambling excepting in Nebraska, which defines them as a form of sports betting, which is broadly banned there. Elsewhere, varying layers of state laws, past court decisions, and regulations have created a state-by-state patchwork of legal uncertainty. More than 20 states have passed daily fantasy sports regulations and taxes. On the other hand, legal concerns keep the major daily fantasy sports operators out of at least a half-dozen states, including Louisiana, according to the LegalSportsReport.com website.
“There’s nothing wrong with it. It’s just that it’s not a regulated industry in a lot of states. And so the operators went into those states and just decided they were going to operate, and nobody said anything. It’s not illegal,” Dorson said. “The states are perfectly within their bounds to want to regulate them and get a tax and the DFS companies are perfectly happy to be regulated or get taxed.”