FanDuel, DraftKings: Do fantasy sports violate Florida's gambling laws?

TALLAHASSEE, Fla. — As the NFL season kicked off, another big contest may be soon be played in the halls of the Florida Capitol.

The growing fantasy sports industry, which is already subjecting television viewers to a barrage of wall-to-wall advertising with the new football season, is now setting its sights on getting the blessings of the Republican-controlled Florida Legislature.

Two rival fantasy sports companies, FanDuel and DraftKings, have joined forces to hire one of Tallahassee’s more prominent lobbying firms led by a well-known GOP fundraiser.

The reason? Despite promises to players that fantasy sports are completely legal, questions remain about whether participating in such games violates Florida’s gambling laws.

Peter Schoenke, president of the Fantasy Sports Trade Association, said his group also decided to hire lobbyist Brian Ballard and his firm this summer because it’s “important to establish a presence in Tallahassee and begin educating legislators about the dynamics of fantasy sports.”

Schoenke’s group contends that as many three million Florida residents participate in fantasy sports contests where big money often is at stake, including traditional fantasy football leagues or the daily and weekly contests run by FanDuel and DraftKings.

Those two companies have paid for a flood of television and radio ads promising big payouts to players. DraftKings’ website says it is guaranteeing that more than $1 billion will be paid out in 2015.

But a well-known gambling and sports law attorney warns that as the industry grows and becomes more lucrative it could invite scrutiny.

“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,” wrote Daniel Wallach, an attorney with the Fort Lauderdale office of Becker & Poliakoff, in a recent analysis of Florida law. “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.”

While federal law has an exception utilized by those in the fantasy sports industry, the legal situation in Florida in murkier, thanks in part to a 1991 opinion authored by then-Attorney General Bob Butterworth.

He flatly stated that an NFL fantasy league — where team owners paid $100 to join and won money based on the performance of their team — was illegal gambling.

Butterworth stated that while there may be some skill in picking a fantasy team, the prizes in a league are based on the performance of a player in an actual football game and that it is like placing a bet.

Schoenke would not comment on the opinion, but he did note it was issued back when “fantasy sports was still in its infancy and well before it became our country’s new national pastime.”

Attorney General Pam Bondi’s office has no plans to revisit the issue, said her spokesman, Whitney Ray. He also said the attorney’s general does not rescind previous legal opinions.

While Bondi’s office — and a spokeswoman for the fantasy industry — say there are no current investigations, Wallach has suggested it’s time for legislators to clarify whether fantasy sports are legal.

House Majority Leader Dana Young, who tried and failed to pass a comprehensive gambling bill last year, said she would support changing state law to make it clear fantasy leagues are allowed.

“That’s something that a lot of people enjoy doing and it’s not gambling,” said Young, a Tampa Republican.

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