Seminoles Vs. DraftKings, FanDuel: Tribe Says Florida Fantasy Sports Bills ‘Violate The Tribe’s Exclusivity’

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grand opening for the Seminole Hard Rock Hotel

Proposed daily fantasy sports legislation would violate a gaming compact in Florida, the Seminole Tribe contends in a new letter that came to light on Wednesday.

In a letter to state legislators first reported by Florida Politics, the tribe warned that legalizing DFS would give them grounds to cease making payments to the state. Those payments amount to more than $200 million per year in return for gambling exclusivity.

Seminoles vs. DFS

The letter was penned by Jim Shore, general counsel for the Seminole Tribe. It was hand delivered to Sen. Travis Hutson and Rep. Mike La Rosa, the two chairs of the relevant committees.

“I am writing to express the Tribe’s initial concerns about “fantasy contest” legislation under consideration by the Florida Legislature,” the letter begins.

Shore goes on to explain his client’s position:

The Tribe believes the games permitted by these bills would violate the Tribe’s exclusivity, as set forth in Part XII of the 2010 Gaming Compact between the State and the Tribe. By providing this notice, the Tribe hopes to avoid a situation where the State enacts legislation that inadvertently violates the Tribe’s exclusivity.

The letter states that the Tribe is willing to discuss the issue of fantasy sports contests. It warns, however, that “any reduction in the Tribe’s exclusivity must be balanced by some additional consideration from the State.”

Without such an agreement, the 2010 Gaming Compact would allow the Tribe to cease all revenue sharing payments to the State based on the expanded gaming contemplated by these bills.

Why now for the Seminoles?

The Seminoles, to date, have done most of their lobbying against DFS behind the scenes. The public acrimony is a new development. It’s at least possible that the Seminoles’ change in tactics means the legislation has a chance of passing, despite its more private protestations in the past.

Still, the Seminoles taking things public makes things more difficult for DFS. If lawmakers view the Seminoles cutting off their payments to the state as a real threat, it’s not likely that DFS regulation will be the hill lawmakers see fit to die on.

It could also be that DFS ends up being a moving part in negotiations between the state and tribes, among other gaming issues.

Regardless, it’s an interesting shift in a DFS battleground state.

Past and present DFS legislation in Florida

Florida is about as gray as it gets for fantasy sports legislation. Although lawmakers have been trying since 2015, there is nothing on the books at the moment.

Attorney General Pam Bondi has repeatedly deferred to federal officials when asked for her opinion of DFS legality. Robert Buttersworth, a former Florida AG, did provide an opinion way back in 1991. It was about just paid-entry fantasy sports — DFS didn’t exist then. But it still wasn’t good vis a vis the industry as situated:

While the skill of the individual contestant picking the members of the fantasy team is involved, the prizes are paid to the contestants based upon the performance of the individual professional football players in actual games.

Accordingly, I am of the opinion that the operation of a fantasy sports league such as described in your letter would violate s. 849.14, F.S.

Florida trying again

Shore’s letter references three specific pieces of legislature that are pre-filed for 2018:

Previous legislative efforts have failed, at least in part because of concerns over the compact. Rep. Jose Felix Diaz previously said as much on behalf of Gov. Rick Scott:

It was something the governor was very clear on, that he did not want a standalone fantasy bill to pass if it was not addressed in the Compact.

The new version of the Compact specifically says if fantasy sports were approved, the Seminoles would think it was gambling and then they could do internet gambling, including but not limited to fantasy sports.

Proponents of legislation would argue that DFS does not qualify as expanded gaming. They contend it is a game of skill, as many other jurisdictions have legislated. The three bills in question seek to exempt fantasy sports from the definition of gambling.

Tribes and DFS don’t always mix

Florida isn’t the only state in which tribes and DFS intersect.

Oklahoma is an example. A pair of 2016 bills appeared to be in the clear after passing committee votes in both chambers. Progress stalled, however, and the tribes subsequently boasted about defeating the efforts.

Arizona, too, has vocal tribal opposition to DFS legislation. Paid-entry fantasy contests have always been considered illegal there. The Arizona Indian Gaming Association has blocked legislation in the past.

Other states in which fantasy sports bills and tribal compacts have already intersected:

Florida is a battleground

Florida is one of the biggest ones, though, the third-largest state in the country. DraftKingsFanDuel and others continue to be active in the state despite the lack of legal clarity and a seemingly unfavorable climate, given the old AG opinion’s existence.

Tribes are often still trying to wrap their heads around DFS. They aren’t always interested in letting operators get a law on the books when they see it as possibly infringing on their territory. Some of the same issues are being raised as the nationwide sports betting movement picks up steam, too.

Most of the DFS opposition has happened quietly behind the scenes in Florida. Now, the Seminole Tribe has now put forth some very public opposition.