Fantasy sports companies and their national trade association have begun ramping up a political profile in Florida, hiring big-name lobbyists and handing out large campaign donations to key state legislators as they aim to protect their lucrative industry from regulatory scrutiny.
Although there is no legislation aimed at curtailing fantasy sports businesses in Florida yet, there is early “chatter,” according to one lawmaker, about whether fantasy sports are a form of entertainment or should be treated as unsanctioned gambling.
“They are promoting a product that looks a lot like sports betting,” said Sen. Rob Bradley, a North Florida Republican and lead negotiator on gambling issues in the Florida Senate.
At issue are two companies that have blanketed television airwaves in recent months: DraftKings and FanDuel. They advertise daily and weekly fantasy sports leagues where participants pay an entry fee to draft football or baseball players for hypothetical sports teams. The real game statistics from those players are compared to other entrants for a chance to win prizes. In ads, both companies say they will give out more than $1 billion in 2015.
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The heightened political activity comes amid new legal scrutiny on the increasingly popular fantasy sports companies. Last week the New York Times reported that both FanDuel and DraftKings were forced to defend the integrity of their business after allegations that employees of the companies benefited from what amounted to insider trading.
According to television commercial analytics company iSpot.tv, DraftKings and FanDuel were among the 10 most prolific advertisers nationally over the past 30 days. Both spent more money and aired more commercials than advertisers like Ford, Chevrolet and McDonald’s, according to iSpot.tv.
But the surge of advertising is drawing attention to the industry at just the wrong time for the typically gambling-cautious Florida Legislature. Lawmakers are examining all forms of gaming in light of the state’s expiring gambling compact with the Seminole Tribe of Florida. The state had a five-year deal with the Tribe that allowed them to run blackjack and other table games at five of its casinos in exchange for $1 billion. As the state reviews that deal, lawmakers are exploring how to manage other forms of gambling.
Bradley, who is leading the Florida Senate’s negotiations with the Tribe, said any time the state starts looking at the compact, there is a ripple effect that draws other forms of gaming into the discussion. He said fantasy sports with big payouts could be included, but it is too early to tell how that conversation will go.
Fantasy sports companies already see the threat and are responding swiftly. In August, FanDuel and DraftKings combined to hire 10 lobbyists to advocate on their behalf in Tallahassee. Among the hires are well-known veteran lobbyists Brian Ballard and J.M. “Mac” Stipanovich.
And an industry group that both companies are part of, the Fantasy Sports Trade Association, also hired Ballard and Stipanovich as part of a team of six lobbyists.
“It’s smart for them to have boots on the ground,” Ballard said.
Ballard disagrees with critics who say short-term fantasy leagues are promoting gambling. He said participating in fantasy sports is “a game of skill” as opposed to a game of chance — an important distinction in the regulatory world.
While the Fantasy Sports Trade Association is new to Tallahassee, they are already wise to the money game, donating $10,000 each in the last two weeks to four of the biggest players in the state’s discussion on gambling. That group gave checks to political action committees run by House Speaker Steve Crisafulli and the chairman of the House Regulatory Affairs Committee, Jose Felix Diaz, R-Miami. In addition, PACs run by Rep. Matt Gaetz, chairman of the Finance and Tax Committee, and Sen. Jack Latvala, chairman of the Senate Appropriations committee handling economic development issues, also got donations.
Latvala, a Clearwater Republican, said the trade association has not talked to him about what issues they may have before the Legislature.
The political build-up in Florida comes as a dozen other states are considering various bills that would affect the industry. Texas, Illinois and California are all considering bills that would restrict or ban the short-term fantasy sports leagues. None have passed, but they have provoked the FTSA to go on the offensive in states like Illinois, where the FTSA is telling supports to email state legislators to urge them to oppose the bill.
Currently Arizona, Iowa, Louisiana, Montana and Washington all prohibit collecting fantasy sports winnings. The FTSA has ongoing campaigns in each of those states to legalize it.
Bradley said he doesn’t know what will happen on the regulatory end in Florida, but one thing is clear: there is a lot more informal discussion around the state Capitol about fantasy sports lately.
“There’s a lot of chatter that wasn’t there a few weeks ago,” Bradley said.
Contact Jeremy Wallace at email@example.com. Follow @jeremyswallace.