TAMPA – Fantasy sports sites are operating in Florida despite laws that seem to forbid them, but new legislation may turn the gamble into a sure thing.
In January, the Business and Professions Subcommittee considered and approved House Bill 707, which would explicitly legalize fantasy sports contests under Florida state law.
“If someone were to call their legality into question with a lawsuit or other legal action, the daily fantasy sites have a legal defense ready to go,” Dustin Gouker, author at Legal Sports Report told the Florida Record.
He said that he’s not sure exactly what the defense would be, but that the sites have certainly considered their options.
Major fantasy sports sites like DraftKings and FanDuel have been operating in Florida for years. But others, like Yahoo Sports, have pulled out of the state or restricted Florida residents from pay-for-prize options due to concerns about Florida Statute 849.14.
The statute states that anyone who stakes, bets or wagers money on a trial or contest involving humans or animals commits a second degree misdemeanor. Anyone who receives money from bets, or becomes the depository of money from bets commits the same crime.
This fairly straight-forward law is explained in more detail in a 1991 advisory legal opinion written by the former Attorney General Robert A. Butterworth. It states that the statute prohibits the operation of or participation in a fantasy sports league that asks users to pay an entry fee and then pays cash based on real-world outcomes.
Yet, DraftKings and FanDuel are both still operating in Florida. Both companies allow users to enter sports-related contests and win monetary prizes, which seems to be in direct violation of the Florida statute.
If House Bill 707 makes it into law, it will be first revision of this area of Florida law since before the 1991 advisory opinion.
“The main opinion referenced was written in 1991, and there are two other related opinions that work in concern with the '91 opinion and the law,” Gouker said. “Daily fantasy sports as currently situated didn't really crop up until 1991, and there's been no attorney general opinion to say yes or no to confirming this opinion applies to DFS.”
Thus far Attorney General Pam Bondi has made no move to enter the daily fantasy site (DFS) debate or adjust the 1991 opinion. However, a class-action lawsuit filed in South Florida names the DraftKings and FanDuel as defendants and alleges that both companies rig their games to cause users to lose money. The U.S. Attorney’s office in Tampa has convened a grand jury that is considering daily fantasy sports, but it is unclear what sites if any are targeted in its investigation.
“No one has been taken to court over operating daily fantasy in Florida, to my knowledge,” Gouker said.
If HB 707 continues to move forward, it will create consumer protection and oversight for DFS operators. It will also most likely include taxes or fees for operators. According to the hearing packet, overseeing fantasy sports will cost the state of Florida about $100,000 per year.