Daily Fantasy Sports Sites are Preparing to Exit Florida Sports Betting Market

The Florida sports betting market is cracking down on daily fantasy sports sites.

According to a recent report, Florida sports betting regulators recently cease and desist letters to DFS operators. While no immediate action has been taken, at least one major player is expected to shudder operations in The Sunshine State by March 1, 2024.

What are the full details behind this decision? What type of impact will it have, if any, on sports betting in Florida? Will all daily fantasy sports sites close their doors by March 1? Is there a chance The Sunshine State’s stance on this issue will change? Or be amended into a different law? 

We have lots and lots of questions. Let’s try to find some answers.

Why Florida Sports Betting Regulators Have Taken Aim at Daily Fantasy Sites

This latest news is the culmination of a longstanding and increased focus on daily fantasy sports sites in Florida. While sports betting throughout Florida is once again legal, the Seminole Tribe is the exclusive provider of all services. Daily fantasy sports sites do not fall under their umbrella.

In fact, daily fantasy sports sites have for so long tried to operate independent of other online sportsbooks in the United States. Because companies such as PrizePicks, Betr and Underdog Fantasy don’t process long-term or outcome-based bets, they have argued that their services are not considered gambling. Many states have accepted this justification. Others have looked the other way. Daily fantasy sports sites are actually operational in certain states without legalized sports gambling.

Still, Florida sports betting officials began looking into daily fantasy sports transactions with an increased focus just a few months ago. The re-introduction of sports gambling in Florida fueled this scrutiny. 

Regulators believe that daily fantasy sports is essentially sports betting, and that sites like PrizePicks, Underdog and Betr need specific gaming licenses. As a result, one member of congress proposed a Florida daily fantasy sports bill just before the end of last year. However, it doesn’t appear to have gained any traction. The bill would have called for DFS operators to exist as their own industry separate from sports betting, since the state cannot currently license anything but Seminole Tribe locations as sports gambling providers. 

Which Daily Fantasy Sports Sites are Preparing to Leave Florida?

To be honest, all daily fantasy sports sites in Florida are likely preparing to exit the state. For now, though, PrizePicks is the only one that has officially announced their plans to leave. Here’s Sam Maquillian from Legal Sports Report with the complete lowdown:

“PrizePicks notified Florida customers Friday that it will cease operations in the Sunshine State on March 1, a week after LSR reported the impending departure. ‘We are writing you with an important update. At the request of the Florida Gaming Control Commission, we are pausing our contests in the state,’ PrizePicks said in an email to Florida customers. ‘After Thursday, 2/29 at 11:59 p.m. ET, you will no longer be able to place entries on PrizePicks.’ In exchange for their cooperation, the FGCC agreed not to take further action against those companies. PrizePicks, meanwhile, vowed to return. ‘We are working with policymakers to bring greater clarity to fantasy sports laws in FL, and hope to provide an update on these efforts soon,’ PrizePicks said in the email to Florida customers."

The language here suggests Betr, Underdog and any other DFS providers will follow PrizePick’s lead. These companies have generally exited markets after gaming commissions treat daily fantasy sports transactions as “likely illegal.” 

Most recently, daily fantasy sports sites in New York left the market entirely after facing similar issues. And to be frank, this is the risk operators like Betr, Underdog and PrizePicks have willingly subjected themselves to. 

Daily fantasy sports in the United States has always operated in a legal gray area. Very few states have specific laws against it. But very few also have laws allowing it.

Will Daily Fantasy Sports Return to Florida?

Despite PrizePicks’ stated hope to return, don’t hold your breath for daily fantasy sports getting legalized in Florida anytime soon. Sure, it’s not impossible. But their chances of re-entering the market, as Florida sports betting laws currently stand, aren’t great.

To that end, daily fantasy sports sites are up against two issues. First and foremost, Florida sports betting regulators are not the only ones cracking down on DFS operators. On the contrary, there has been a groundswell of scrutiny dedicated to the DFS practice now.

As of this writing, nearly one dozen states have sent cease and desist letters to DFS sites operating inside their region. And in the majority of these cases, we have seen companies leave the market without yet returning. 

Beyond this, the Florida sports betting compact is an even bigger hurdle to PrizePicks’ re-entry into The Sunshine State. As we already mentioned, Seminole Tribe-owned casinos are the only places allowed to offer legal sports betting in Florida. The state isn’t going to create an exception that allows DFS special access. Not only would the Seminole Tribe need to collaborate on such an addendum, but greenlighting DFS would incense online sportsbooks in the USA who want to operate in Florida. 

Mind you, this all presumes policymakers are even interested in preserving the DFS business. Right now, they are more consumed with the ongoing litigation over the future of general sports betting in Florida. The legality of DFS is likely not high on anyone’s radar, otherwise this year’s Florida daily fantasy sports bill would have generated more interest.

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