Questions Of Legality, DFS Operators In State Likely Behind Move

DraftKings, FanDuel Partner To Lobby In Florida: Here’s Why It’s Important For DFS

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DraftKingsFanDuel and the Fantasy Sports Trade Association will start lobbying Florida government officials to guard the legal status of daily fantasy sports in the state, as first reported at SaintPetersBlog.com.

Why is lobbying in Florida important?

The two giant DFS operators and the FSTA have retained Florida-based Ballard Partners.

The fact that the trade association and the DFS duopoly of DraftKings and FanDuel retained new lobbyists isn’t necessarily a shocking development. But it is interesting as there is no active or pending legislation regarding fantasy sports there. Most DFS operators allow players in the state.

DFS sites also have an increasing presence in the state. CBS, which just launched its SportsLine.com DFS product, has offices in Florida. FanDuel recently took over the shuttered Zynga Sports 365 in Orlando.

What the FSTA said

FSTA chairman Peter Schoenke confirmed the retention of Ballard to Legal Sports Report and outlined the reasons behind the move.

“We continue to boost the FSTA’s resources in states with a large number of fantasy sports players to ensure that residents there can continue to fully play fantasy sports,” Schoenke said. “And certainly there’s an added benefit with both CBS and FanDuel and several more fantasy sports companies having operations in the state.”

Clearly, Florida is an important state for DFS. It has a large population base, and many of the professional sports team in the state have also partnered with either DraftKings or FanDuel.

But there is also another potential reason behind the move: Florida’s status as a “gray” state in terms of the law on fantasy sports.

‘Florida’s Uncertain Legal Landscape for Fantasy Sports’

Daniel Wallach, an attorney who is an expert on the intersection of sports law and gaming law for Becker & Poliakoff (based in Florida), penned an article entitled “Florida’s Uncertain Legal Landscape for Fantasy Sports: A Closer Look” in June.

Wallach notes in his opinion that, unlike most states, the legality of DFS under Florida law does not hinge on its status as a “skill game.” Without rehashing Wallach’s legal analysis in full, it can be illegal to operate game of skills for money, as well, depending on a number of factors, including “correlation between the entry fees and prizes awarded.”

There actually are no laws that address fantasy sports directly in Florida, and the legal status of DFS could depend largely on an attorney general’s opinion from 1991, if challenged in court.

In fact, Wallach notes that the  Kansas Racing and Gaming Commission actually referred to the Florida AG opinion in its initial stance, saying DFS constituted an “illegal lottery.” Earlier this year, however, Kansas passed a bill legalizing fantasy sports for money, rendering the KRGC stance moot.

A change to Florida law?

Suffice it to say, a change to Florida gaming law would take any question out of the matter of DFS’ legality; a carveout for fantasy sports in the current relevant statute would be ideal for the industry, Wallach argues.

And he also warns that maintaining the status quo could be a problem for DFS operators:

Although there have been no criminal prosecutions of fantasy sports operators or participants (or alleged aiders and abetters) since the issuance of AGO 91-3, it is not beyond the realm of possibility that an aggressive state prosecutor could seek to target the industry, which has changed dramatically since 1991. As more money flows into fantasy sports and the character of the games begin to more closely resemble gambling (rather than an informal social game), the risk of a criminal prosecution heightens. As unlikely as that may seem to many, all it takes is one aggressive prosecutor or attorney general to jeopardize Florida’s lucrative and established fantasy sports market.

Viewed through the lens of Wallach’s legal opinion, lobbying in Florida becomes even more important.

Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.