Underdog, Betr, PrizePicks, other daily fantasy operators set to exit Florida

While daily fantasy as a category is receiving less overall media attention these days than it was in the era before more typical sports betting received wider legalization, there are still plenty of interesting developments with it. Some of what’s going on there is about companies like PrizePicks, Betr, and Underdog, which have taken flak in some quarters for their offerings of daily fantasy picks versus the house (rather than versus other users) that look to many like gambling. And that’s now led to those companies withdrawing from Florida at least for a while after threats from the Florida Gaming Control Commission:

NEW: Fantasy sports companies including Underdog will pull out of the lucrative Florida market at least temporarily after @FLGamingControl sent a second demand letter to multiple companies in January @MazzNYC @sam_mcquill https://t.co/OV8kT2fGyz

— Legal Sports Report (@LSPReport) February 15, 2024

Here’s more from that piece by Mike Mazzeo:

Daily fantasy sports pick’em operators plan to leave Florida by March 1 while they consider a court response to multiple state orders to leave, multiple sources told LSR.

It comes after Florida regulators sent a second round of cease and desist letters in January, promising no further legal action against Betr, PrizePicks and Underdog Fantasy should they leave the state by that date.

Two sources told LSR that at least one of, if not all three, plan to comply. A third source said it was multiple pick’em operators, which could mean all three. A fourth source confirmed Underdog specifically will leave Florida.

…“The Coalition for Fantasy Sports is committed to ensuring its member companies remain in the state and is actively engaging with Florida policymakers to protect the ability of fantasy sports fans to engage in the games of skill they enjoy,” a spokesperson with the Coalition for Fantasy Sports, a trade group representing the companies said in an emailed statement.

Why is there such backlash against these particular operators, and not the daily fantasy offerings from the likes of DraftKings and FanDuel? It has to do with the particular setups of each entity’s contests. But that hasn’t always satisfied all critics, as noted in comments by state senator Joe Gruters to Orlando ABC affiliate WFTV in January:

Sen. Joe Gruters, R-Sarasota, wants the commission to explain why the businesses were targeted and to clarify why they could be breaking the law while the biggest players in the industry — DraftKings and FanDuel — aren’t. The senator raised the issues in a Dec. 18 letter to the commission’s executive director, Lou Trombetta.

…“The letters definitively state that ‘betting or wagering on the result of contests of skill … including fantasy sports betting, is strictly prohibited and constitutes a felony offense.’ Notably, however, the commission’s public position is less definitive. In the FAQs (frequently asked questions) on the commission’s website, the commission states that ‘wagering on fantasy sports’ is ‘probably not’ legal. I am concerned that the commission is applying an interpretation that is not supported by law and that the commission may be selectively enforcing its interpretation,” Gruters wrote.

Gruters told The News Service of Florida that he spoke with Trombetta about the situation and asked why DraftKings and FanDuel weren’t targeted.

“I guess the biggest guys have not been issued those letters. And so, for me, it’s just a matter of fairness. I think it should be across the board. I talked to the executive director about that, personally. He was in my office. And I think he said letters were forthcoming, but I don’t think those have gone out yet,” Gruters said in a phone interview Wednesday.

However, it’s notable that Hard Rock International chairman Jim Allen (whose company’s gambling outlets are mostly operated by the Seminole Tribe of Florida) told media last December that FanDuel and DraftKings daily fantasy offerings weren’t seen as a problem for them. Here are those comments from Allen, via Brant James of Gaming Today:

“The compact allows for the existing scope of fantasy to not be an exclusion or a default. So if DraftKings and FanDuel continue to do what they’re doing, we’re fine with that. So that’s category one. We have no issue with that whatsoever. But certainly what Betr and Underdog and others like them are doing is flat-out illegal. There is no way around it. Eleven other states have declared exactly what they’re doing as illegal and we support the Florida Gaming Commission and the Attorney General in pursuing that.”

It’s significant that both Betr and Underdog have major media operations. None of those are necessarily Florida-specific, but those media efforts and their idea of a “zero-cost customer acquisition platform” definitely become less scalable if the platforms are operating in less jurisdictions. So we’ll see if these companies wind up able to return to Florida or not.

[Legal Sports Report]