JACKSONVILLE, Fla. — The Seminole Tribe is taking DraftKings to court, alleging the sports betting company’s prediction market business in Florida constitutes an illegal gambling operation.
The Tribe said DraftKings is violating its exclusive rights over sports betting in the Sunshine State.
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Action News Jax State and Local Government Reporter Jake Stofan first questioned whether DraftKings’ offerings could lead to a legal battle back in June.
At the time, we asked whether the Tribe may challenge the legality of prediction markets, which offer investment opportunities that more or less look just like sports betting in some cases.
Now the Tribe is contending what DraftKings is offering isn’t a prediction market at all. It’s just plain sports betting.
At issue are new apps launched by DraftKings in Florida that allow gamblers to “invest” in the outcomes of sporting events.
RELATED: Could prediction market offerings put Florida’s gaming compact with the Seminole Tribe at risk?
Those apps are branded as prediction markets, which have so far been upheld as separate from gambling through various federal court cases.
But in a new 72-page lawsuit filed in state court, the Tribe alleges DraftKings’ offerings aren’t prediction markets. Instead, the Tribe argues they are gambling.
Gaming attorney Daniel Wallach said it is not surprising to see the Tribe pushing back against what has become a legitimate threat to its monopoly on sports betting in the Sunshine State.
“It’s a similar type of challenge to prediction markets that have been waged nationwide,” Wallach said.
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Every dollar spent on prediction markets is arguably a dollar lost by the Tribe, and that also means less money going to the State of Florida. The Tribe contributes about $1 billion to the state every year as part of the compact.
“Ultimately this is gonna come down to a question of whether these are prediction markets, and if so, who gets to regulate this?” Wallach said.
Wallach noted the Tribe is not challenging the existence of prediction markets in general, and that in and of itself may be strategic.
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The industry has strong support from the White House, with Donald Trump Jr. serving as a strategic adviser to one of the biggest prediction market companies in the country, Kalshi.
“That may be the reason why only DraftKings was sued and not Kalshi, Polymarket, Underdog, Prize Picks and Crypto.com, because then you’re going after the instrumentality that has the full-throated support of the White House,” Wallach said.
In a statement, DraftKings defended its offering in Florida, telling Action News Jax in part, “While the company has deep respect for Seminole Tribe’s sovereignty, we remain confident in our legal position.”
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