More Than a Fantasy? An Analysis of the Legality of Daily Fantasy Sports

From a historical overview, Florida Statutes Section 849.14 makes it unlawful to bet on the result of a trial or contest of skill. Daily fantasy sports contests and leagues for which participants pay a fee for the right to manage a team are also prohibited under this statute.

On Jan. 8, 1991, an Attorney General advisory legal opinion was issued on the topic of gambling and fantasy sports leagues. At its core, the opinion letter served as a brief analysis of Section 849.14, but the attorney general noted an important nuance in the law: contests in which the skills of the contestants are predominant do not violate Florida's gambling statute. However, staking, betting or wagering anything of value on such contests does violate the gambling laws in Florida.

To support this conclusion, the letter cites Florida Supreme Court case law where the court found a violation of Florida's gambling statutes when wagers were placed on games of chance and contests of skill. Such violations were found even when the betting or wagering parties were actors in the event.

The opinion letter also highlighted Florida case law where distinctions were made between a purse or prize, and a stake or bet. Prizes and purses are permitted under Florida law, as the value offered by the donor cannot be reclaimed. Stakes and bets, however, are not permitted under Florida law because there is a chance for the donor to recoup the initial investment after the commencement of the event. In essence, the court determined that despite the presence of a risk of loss, the chance of gain was the distinguishing factor.

Over the course of the past three decades, several attempts have been made to legalize participation in fantasy sports leagues in Florida, but these attempts have not yet been successful.

Despite the extensive lobbying efforts of daily fantasy sports operators such as FanDuel and DraftKings, a proposal that sought to legalize paid-entry fantasy sports last spring was rejected by the state House.

In essence, House Bill 7047 would have exempted fantasy sports contests from regulation under several statutes, including Section 849.19. In pertinent part, an amendment stated: "A fantasy contest is not subject to regulation by the Department of Business and Professional Regulation and is not subject to" Sections 849.01, 849.08, 849.09, 849.11, 849.14 or 849.25.

Of noteworthy consideration, however, is the language of the initial bill, as it was seemingly unrelated to fantasy sports or gambling.

The Gray Area

Although daily fantasy sports are not legally permitted in Florida, several fantasy sports operators permit residents and visitors of Florida to access their services. Curiously though, participants in Florida are not often, if ever, prosecuted for their participation in daily fantasy sports.