Seminole Tribe Suing DraftKings in Florida

The Seminole Tribe is asking the court to shut down DraftKings

The Seminole Tribe is calling upon the Broward County court to shut down the prediction market operation that DraftKings is running in Florida. There are two specific programs that the tribe is especially taking issue with: Pick6 and the Super App Sportsbook. Included in the 72-page complaint are images of online ads and physical billboards proclaiming that DraftKings is “now in Florida.”

The tribe is also requesting that the court order DraftKings to hand over all of the money that DraftKings has made in Florida. According to filings in the lawsuit, that money would then be distributed by the Seminole Tribe for use in “consumer protection initiatives and problem-gambling recovery programs.”

“Florida has decided that legal sports betting should be conducted through a single, accountable, trustworthy, and heavily regulated operator, and it selected the Tribe, not DraftKings, as the steward of its policy,” reads the lawsuit, according to reporting by the Tampa Bay Times.

DraftKings is insisting that it has broken no laws

Massachusetts-based DraftKings operates legal and regulated sports betting sites in 27 U.S. states. In other states, including Florida, DraftKings offers action through its prediction market site.

In the U.S., sports betting is regulated on a state-by-state basis. Prediction markets are regulated federally under the auspices of the Commodity Futures Trading Commission (CFTC).

Prediction markets offer sports-event contracts. Operators of sports betting sites, as well as state gaming regulators, insist these are nothing more than illegal sports betting. This is a contentious issue with state regulators. They believe that prediction market sites are skirting state gambling laws. In doing so, they aren't paying the necessary licensing fees or submitting the required revenue payments to state governments. This is a legal requirement of sportsbooks under state sports betting regulations.

However, the prediction market sites counter that the sports-event contracts are federally regulated derivative swaps and therefore not subject to state laws.

DraftKings insists that it is breaking no laws in Florida.

“Furthermore, DraftKings Pick6 is a peer-to-peer fantasy sports variant centered on a simple ‘more or less’ mechanic tied to individual athlete performance metrics and is not sports betting,” a DraftKings spokesperson said in a statement given to the Tampa Bay Times.

“While the company has deep respect for Seminole Tribe’s sovereignty, we remain confident in our legal position.”

DraftKings CEO is also named in the Seminole Tribe lawsuit

DraftKings CEO Jason Robins is also named in the Seminole Tribe's lawsuit. They are accusing Robins of violating Florida’s anti-racketeering act.

Lawyers for the tribe argue that Robins and DraftKings do not pay “even a penny” in taxes to Florida. By operating illegal sports betting, they are taking money away from Florida’s environmental and educational programs.

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