DraftKings, FanDuel Start Pitching Florida Sports Betting Inclusion

Posted on May 17, 2021
Florida sports betting

Sports betting in Florida could become a monopoly, but DraftKings and FanDuel are working hard to make sure that does not happen.

That is according to Jim Allen, CEO of Seminole Gaming and chairman of Hard Rock International. His comments to the Senate Appropriations Committee came during the first day of Florida’s special session to consider the newly negotiated compact between the Seminole Indians and the state of Florida:

“I want to make sure that there isn’t a perception that companies like FanDuel and DraftKings and Barstool, and obviously the parimutuels themselves, will not have an opportunity. As a matter of fact, for the record, we actually have proposals from some of those companies, specifically DraftKings and FanDuel, I’ve met personally with Barstool and many of the other companies.

“The tribe is 100% interested and willing to create a business relationship with those companies whether it be through the parimutuels or directly.”

Allen: Whether mobile is allowed is Seminole’s problem

The compact language says FL sports betting only takes place within a tribal casino, as that is where all of the servers will be located. That does not exactly fall into line with the Indian Gaming Regulatory Act or other court findings.

There is also concern the expansion of gambling goes against Amendment 3, which put any future casino gambling expansion in the hands of voters after passing in 2018.

Those issues do not matter in terms of whether the Florida legislature should approve the compact, Allen said:

“When someone asks about the legality of sports betting, whether it’s associated with Amendment 3 or whether it does or does not comply with IGRA, very candidly it does not matter because the state of Florida is not taking the risk.

“By approving this compact, the tribe takes the risk. If in a court the tribe does not prevail with its belief that sports betting is legal, then it is still committed to pay to the state of Florida for 30 years all of its revenue share on all of its land-based casinos.”

Allen added the Seminole contributed $22 million to Amendment 3 and does not believe it impacts the tribe.

Report: DraftKings lobbying against Florida sports betting deal

According to Politico, DraftKings Sportsbook is not waiting for the Seminole to agree to a FL sports betting deal.

Publicly-traded DKNG hired 11 lobbyists over the last few weeks to either change or disrupt the compact agreement, according to the Politico report.

DraftKings declined to comment on the story to LSR.

Compact approved by committee

The committee favorably approved SB 2-A, which signs into law the new gaming compact. The compact, among other things, gives the Seminole Indians exclusivity to operate FL sports betting.

The state’s 35 pari-mutuels can sign marketing agreements with the Seminole and launch their own sports betting skins. That is as long as there is a revenue-share agreement between the Seminole and the pari-mutuel and all bets take place on the Seminole’s platform. The parimutuels would get to keep 40% of revenue.

Of course, the Seminole Indians do not have to sign an agreement with anyone.

Would tribe pay to keep Florida sports betting exclusivity?

Right now, the compact calls for the Seminole to share 13.75% of sports betting revenue with the state of Florida.

That is as long as the Seminole agree to sports betting contracts with three parimutuels within three months. If those three agreements do not happen, the revenue share increases to 15.75%.

That does not seem like a big enough jump to dissuade the Seminole from keeping all FL sports betting revenue for themselves. Mike Rogers of the Stronach Group, owners of Gulfstream Park, agrees:

“Sports wagering, you can debate whether that’s an exclusivity or not. We feel it probably is an exclusivity. The tribes could pay the extra 2 percent and keep that exclusivity in place, which would be something that probably we would do it we could do it.”

Florida sports betting gets mid-October start

The special session barely started before an addendum to the compact was announced.

First, sports betting will not start until the middle of October, according to House Speaker Chris Sprowls:

“In addition, the tribe has agreed to delay the launch to market for the sportsbook component of the compact until October 15, ensuring that the product will be launched with appropriate safeguards.”

The addendum signed Monday also removes any potential expansion for iGaming throughout the state. The compact originally called for good-faith negotiations after 36 months with the Seminole on the implementation of iGaming.

Changes made to Florida DFS bill

There were multiple changes made to a bill that would regulate daily fantasy sports in Florida. That includes removing a requirement for official league data to settle contests.

Still, there is more that has to be done to the bill, said attorney Scott Ward. He represented both DraftKings and FanDuel to propose additional changes:

  • Add a grandfather clause. The bill as written would mean DFS operators need to shut down operations until they are licensed as they would be in violation of state law to accept entry fees without a license once the bill is enacted. That could affect their licensure in other jurisdictions, Ward cautioned.
  • Allow contests on college fantasy sports.
  • Remove requirement on limit of entries. Floridians could be at a disadvantage if contestants cannot enter as many entries as players in other states, Ward said.
  • Remove limitation for 21 and older and revert to 18 and older.

The Fantasy Sports & Gaming Association also tweeted its opposition to the bill.

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Matthew Waters

Matthew Waters is a reporter covering legal sports betting and the gambling industry. Previous stops include Fantini Research and various freelance jobs covering professional and amateur sports in Delaware and the Philadelphia area.

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