FanDuel and DraftKings Pour in $20M for Florida Sports Betting Initiative

Florida Flag With a Casino Background
Sports betting industry leaders FanDuel and DraftKings contributed a massive sum last month to back a proposed constitutional amendment that would legalize sports betting in Florida.

According to campaign finance records reported by Florida Education Champions to the Florida Division of Elections on Monday, FanDuel and DraftKings poured in $10M each during the month of June to back its campaign to allow sports betting platforms to operate in the state.

Established in June, the Florida Education Champions is the sports betting political action committee ( PAC ) that is pushing for the legalization of Florida sports betting.

Said David Johnson, committee chair of the Florida Education Champions:

“Thank you to DraftKings and FanDuel for stepping up to the plate in an incredible way to kick off our amendment process that stands to help all Floridians. Our amendment will direct hundreds of millions of additional dollars toward Florida’s Educational Enhancement Trust Fund and open up the market for online sports betting to competition.”

Contribution Cap Blocked

The $20M funding came in before the expected effective date of a new law that would cap contributions made to committees sponsoring initiatives up to $3,000 until the constitutional amendment they are backing makes the ballot. That initiative however, was blocked by a federal judge on the day it was supposed to take effect.

After spending approximately $160,000 for research, marketing software, website management, and legal services, Florida Education Champions entered July armed with a $19.84M bank account which will be used as it war chest to push for their initiative with education as its selling point.

Legalization of Sports Betting in Florida

If approved, the amendment will legalize sports betting in Florida stadiums and other venues including pari-mutuels all over the state. It specifically authorizes online sports betting by entities authorized to conduct online sports betting and by Native American tribes with a gaming compact with the state.

The initiative would authorize the Legislature to tax legal sports betting with all revenues going to the Educational Enhancement Trust Fund, an account funded by the Florida Lottery and which pays for various educational programs such as the Bright Futures Scholarships.

Magic City Casino Owners Challenge Florida Gambling Compact With Seminole Tribe

Florida State Seal With a Casino Background

Florida’s gaming compact with the Seminole tribe has been challenged by a federal lawsuit from the owners of Magic City Casino.

The lawsuit alleges that the sports betting component in the compact is based on legal fiction and that it violates the federal law.

It was filed last Friday at the U.S. District Court or the Northern District of Florida by the Havenick family owned Southwest Parimutuels. It argues that the agreement authorizing sports betting outside Florida’s tribal lands is in violation of the Indian Gaming Regulatory Act and asks the Court to stop the implementation of sports betting.

Said Isadore Havenick, vice president for public affairs of Southwest Parimutuels:

“While we are fully supportive of Gov. DeSantis and his work to secure a new Seminole Compact, the lawsuit focuses on a very narrow aspect of the Compact — the legality of off-reservation and online sports wagering.’’

The company claims that it stands to lose “millions” in revenues if Florida residents are allowed to make sports bets from their homes using the internet or mobile apps. It adds that this will significantly or even completely hinder their ability to compete with the tribe.

Online Bets on Sports Events

The compact, signed by Gov. Ron DeSantis and Seminole Tribe chairman Marcellus Osceola Jr. last May, would allow online bets on sports events using the internet or web applications from anywhere withing Florida beginning October 5th. All transactions however, would have to go through servers located on tribal lands to bypass both federal and state law which prohibit sports betting in Florida.

It also allows sports bets to be placed at six of the tribe’s reservations but also permits the state’s existing race tracks an jai alai frontons to develop their own mobile apps to conduct off-reservation bets if they are picked by the Tribe as its partners. Under this agreement, the parimutuel would get 60% of the bets’ proceeds while the tribe will receive the remaining 40%.

Bets “Deemed” to Bet Placed on Tribal Land

The main issue is the provision in the compact that says that a bet is “deemed” to be placed on tribal land just because of the location of the operator’s server. The lawsuit argues that this violates the Indian Gaming Regulatory Act, the Wire Act, the Unlawful Internet Gambling Enforcement Act, and other court decisions interpreting those mentioned laws.

In its 67-page complaint, Southwest Parimutuels argues that “contrary to the fiction that the 2021 Compact and Implementing Law, a bet is placed both where the bettor and the casino are located”. It also claims that such a compact between the state and Tribe can only “occur on Indian lands”. Furthermore, it says that the deal clearly allows bets to be placed outside tribal lands.

Pending Federal Review

The deal is currently awaiting approval from the U.S . Department of Interior which has 45-days to decide after the compact is submitted. A representative from the office of the governor said that it was mailed to the approving authority last June 3rd, although the lawsuit states that it was presented to the DOI on June 21st.

The tribe is also threatened by a constitutional amendment for the 2022 ballot which would authorize online sports betting at all Florida parimutuels, professional sports stadiums, and anywhere else in the state using a mobile sports betting platform. This was proposed by FanDuel and DraftKings.

Lawmakers Make New Push to Legalize Sports Betting in Florida

Odds Board and Money
Republican Rep. Chip LaMarca and Democratic Rep. Anika Omphroy are teaming up to push separate drafts that would legalize sports betting in Florida.

LaMarca will take charge of two bills that will implement the overall policy (HB1317) and set up the requirements for licensing (HB1321). Meanwhile, Omphroy will sponsor the legislation that will establish the tax structure surrounding the sports bets (HB1319).

This isn’t the first time that legislators are seeking to legalize Florida sports betting. But while previous attempts have not succeeded, lawmakers are looking for ways to augment the state’s revenues which have been ravaged by the ongoing pandemic.

Said LaMarca on Thursday:

“Right now, Floridians are sending millions of dollars out of the state every year, mostly overseas to foreign countries, because Florida has failed to bring legal sports wagering to our state. We have an opportunity to keep that money here in Florida. Allowing online and retail sports betting to operate legally translates into millions in revenue. That’s money from Floridians that should be invested in Florida.”

HB1317

According to the proposal, legal Florida sports betting licenses will be limited to tribal properties, casinos, pari-mutuel facilities, and professional sports venues. The license would allow those entities to set up sports betting via website and app, enabling customers to wager on games online. Betting kiosks where sports bets can be placed via touchscreen game stations are also mentioned in the bills.

Only persons aged 21 or older are allowed to place bets on Florida sports. Betting on the NFL and other professional sports will be permitted, as well as for college athletics. However, the bill specifically prohibits betting action on high school games. If passed, the Florida sports betting bill will provide prop bets on player statistics as well as parlays and other bets that combined multiple bets into one.

Sports and Tourism Destination

The NBA finished its 2020 season using a bubble format at Disney World in Orlando. Then this year’s Super Bowl was also played in Tampa Bay, with the home town Buccaneers upsetting the defending champions Kansas City Chiefs at Super Bowl LV.

Florida Gov. Ron DeSantis has been pushing for the Sunshine State to become a top sports and tourism destination in the United States. To do so, visitors would need entertainment choices, and sports betting could be one of those. Having a well-connected sports betting industry will help the state achieve that.