[toc]A pair of Florida state lawmakers will be introducing daily fantasy sports legislation that aims to clarify the industry’s legal status while also establishing consumer protections.
Who is introducing the Florida DFS bill?
The news came via a press release issued by Republican state Senator Joe Negron and Representative Matt Gaetz. According to the press release, the two legislators had this to say:
“Currently, 3 million Floridians participate in fantasy sports contests, from traditional leagues with friends or coworkers, to the newer, daily fantasy sports contests,” said Senator Negron. “I do not believe that these Floridians should be at risk of criminal prosecution for doing nothing more than participating in the fantasy sports contests they enjoy. However, due to a dated Attorney General opinion, there is a need to clarify in Florida law that fantasy sports are legal, as well as institute commonsense regulations that address consumers. I believe this legislation will do just that.”
“Government should have little to no involvement in the recreational daily lives of Floridians,” said Representative Gaetz. “I have played fantasy football since I was a freshman in high school, and I have never felt the need for protection from the government. Unfortunately, we have some ambitious prosecutors who want to make criminals out of the 3 million Floridians who play fantasy football, which makes this legislation necessary.”
It’s important to note, however, there have been no reports that DFS users in Florida are currently in any danger of criminal charges.
The basics of the Florida DFS bill
Here is what we know so far about the legislation:
- The bill draft leans heavily on the UIGEA for language to define qualifying games.
- License fee is $500,000 with renewal of $100,000.
- Who needs a license? A “Game operator” is defined as “a person or entity that offers fantasy games for a cash prize to more than 750 members of the public”
- Employees and relatives in household would be blocked from playing games with prizes over $5.
- Players and officials blocked: The bill restricts “any individual who is a player, game official, or other participant, in a real-world game or competition from participating in any fantasy game that is determined in whole or in part on the performance of that individual, the individual’s real-world team, or the accumulated statistical results of the sport or competition in which he or she is a player, game 80 official, or other participant.”
- Player funds protected: The bill requires operators to “[s]egregate game participants’ funds from operational funds and maintain a reserve in the form of cash, cash 90 equivalents, an irrevocable letter of credit, a bond, or a combination thereof in the total amount of deposits in game participant accounts for the benefit and protection of authorized game participants’ funds held in fantasy game accounts.”
- Civil penalty for non-compliance: “Any person or agent or employee thereof who violates this chapter is liable for a civil penalty not to exceed $1,000 for each violation which shall accrue to the State and may be recovered in a civil action brought by the Department.
The bill is in the same mold as a recently introduced bill in Illinois that is considered relatively friendly to the industry. Other states — such as New Jersey and Pennsylvania — are considering legislation that would be much worse for the DFS industry.
The Florida bill would appear to allow the DFS industry to operate on an interstate basis, and would not ring fence Florida DFS players from the rest of the world.
The $500,000 licensing fee could be a sticking point, as it might be too pricy for all but DraftKings, FanDuel and a handful of other larger operators. The $1,000 civil penalty mimics the Illinois bill.
You can read the full bill here.
The climate for DFS in Florida
Florida is one of the hot spots for DFS, as a federal grand jury has been convened there to look into fantasy sports. The targets and scope of that investigation are unknown. In the wake of that, several mid-level operators pulled out of the state, including StarsDraft.
Prior to increased media and governmental scrutiny in the past month, the Fantasy Sports Trade Association had hired lobbyists in the state. But the lobbying efforts have picked up, according to the Miami Herald, with 10 lobbyists working for FanDuel and DraftKings, reportedly. Also from the Herald:
While the Fantasy Sports Trade Association is new to Tallahassee, they are already wise to the money game, donating $10,000 each in the last two weeks to four of the biggest players in the state’s discussion on gambling. That group gave checks to political action committees run by House Speaker Steve Crisafulli and the chairman of the House Regulatory Affairs Committee, Jose Felix Diaz, R-Miami. In addition, PACs run by Rep. Matt Gaetz, chairman of the Finance and Tax Committee, and Sen. Jack Latvala, chairman of the Senate Appropriations committee handling economic development issues, also got donations.
The bill also comes at a time when other key lawmakers in the state are less enthused about the DFS industry. From the Tallahassee Democrat:
Florida Senate President Andy Gardiner has asked his legal team for an opinion of whether playing in contests like those offered by DraftKings and FanDuel is gambling. The state of Nevada, long considered to be a gambling mecca, has already made up its mind. The Nevada Gaming Control Board recently ruled that fantasy sports is gambling. U.S. Attorney offices in Tampa and New York are also investigating the industry.
“President Gardiner is firmly opposed to the expansion of any form of gambling,” said Gardiner’s spokeswoman Katie Betta. “With the information, senators can determine whether changes to existing law needs to be made.”
Sen. Rob Bradley, chairman of the Regulated Industries Committee, told the T-D that a fantasy bill passing in the near future is “not likely.” In October, he likened DFS to sports betting.
The Tallahassee Democrat story also notes that Attorney General Pam Bondi is “taking a hands off approach” and allowing the U.S. Attorney’s office to deal with the legality of DFS.