Fantasy sports controversy emerges as Florida looks to expand online gambling – Sun Sentinel

TALLAHASSEE — As the Seminole Tribe of Florida offers online sports betting, the fight over fantasy sports is heating up as gaming regulators seek to rein in companies accused of running potentially illegal betting games.

The Florida Gaming Control Commission sent cease-and-desist letters to three fantasy sports operators in September, threatening legal action if the sites were not shut down immediately.

But Sen. Joe Gruters, R-Sarasota, wants the commission to explain why the companies were targeted and why they may be violating the law while the industry’s biggest players – DraftKings and FanDuel – are not. The senator raised the issues in a Dec. 18 letter to the commission’s executive director, Lou Trombetta.

Gruters pointed to the cease and desist letters Trombetta sent to Underdog Sports, LLC; SidePrize LLC, also known as Performance Predictions LLC, does business as PrizePicks; and Betr Holdings, Inc.

Gruter’s letter asked why “the two largest fantasy sports operators” in Florida had not received similar threats from the commission.

“The letters clearly state that ‘betting or wagering on the outcome of any competition of skill… including fantasy sports betting, is strictly prohibited and constitutes a criminal offense.’ What is noteworthy, however, is that the Commission’s public position is less clear. In the FAQs (Frequently Asked Questions) on the Commission’s website, the Commission states that “betting on fantasy sports” is “probably not” legal. “I am concerned that the Commission is applying an interpretation that is not supported by law and that the Commission may be selectively enforcing its interpretation,” Gruters wrote.

Gruters told the News Service of Florida that he spoke with Trombetta about the situation and asked why DraftKings and FanDuel were not targeted.

“I guess the biggest people didn’t get those letters. So for me it’s just a question of fairness. I think it should be nationwide. I spoke personally to the managing director about this. He was in my office. And I think he said there would be letters coming, but I don’t think those have gone out yet,” Gruters said in a telephone interview on Wednesday.

Gruters said he understood letters would be sent to DraftKings and FanDuel.

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The Gambling Commission is “in the process of responding to Senator Gruters’ letter,” Eric Carr, the commission’s external affairs director, told the News Service this week.

Months after receiving cease-and-desist letters, the three daily fantasy sports operators appear to be continuing to offer games on their apps and websites in Florida.

The questions about fantasy sports companies have been raised ahead of the 2024 legislative session, which begins Tuesday.

The three companies targeted by the Gaming Commission have hired a number of lobbyists, including some of Florida’s most prominent lobbyists such as Nick Iarossi and Ron Book.

Gruters said he offered to submit a bill to clarify the issue, but was told the commission was still “processing all the information.” Florida has laws regulating gambling activities, but there is no law that specifically addresses fantasy sports.

Meanwhile, Rep. Jason Shoaf, R-Port St. Joe, filed a fantasy sports measure that supporters say would mirror federal law. A Senate version of Shoaf’s bill has not been filed.

The fantasy sports controversy also comes as the Seminole Tribe has pushed online sports betting.

A 30-year agreement signed by Gov. Ron DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola Jr. and ratified by state lawmakers in 2021 granted the tribe “exclusivity” for sports betting – including mobile sports betting – throughout the state. Under the agreement, bets could be placed anywhere in the state via mobile devices, with bets settled on tribal lands. In return, the tribe agreed to pay the state at least $2 billion over the first five years of the agreement, a so-called compact. The deal also allowed the tribe to contract with the state’s pari-mutuel operators to offer sports betting and gave the Seminoles permission to offer craps and roulette at their casinos.

The agreement included an exception allowing “fantasy sports competitions” to be held.

But the fantasy games targeted by gaming regulators could violate the pact, according to Jim Allen, who heads the Seminoles’ gaming department and was instrumental in negotiating the deal.

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Allen, chairman of Hard Rock International and CEO of Seminole Gaming, told the News Service that the types of games operated by the three fantasy companies are not permitted under the compact – or state law.

“We have made it very clear that we have no problem with fantasy sports, particularly what DraftKings and FanDuel offer. However, when we come to Underdog, when we come to BetR and similar companies, there is no doubt, not just Jim Allen’s opinion, it’s not just the Florida State Gaming Commission’s opinion, it’s not just the attorney’s opinion of the general, but 11 other states… have stated emphatically that what they are doing is gambling, that they accept live bets and that it is illegal. And yes, it clearly violates the compact,” Allen said in a telephone interview last month.

The tribe began accepting mobile sports bets from a limited number of players on November 7 and launched nationally in early December.

However, the fantasy operators targeted by regulators claim their activities are legitimate.

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