The revolving door dilemma: Florida regulator joins FanDuel
The recent resignation of Louis Trombetta, former executive director of the Florida Gaming Control Commission (FGCC), to join FanDuel has sparked a heated debate about the ethics surrounding regulators shifting into the gaming industry. This move has prompted Florida lawmakers to consider imposing stricter rules to prevent such transitions, with a proposed two-year cooling-off period aimed at safeguarding regulatory integrity.
Trombetta’s decision to join Flutter-owned FanDuel, a leading sports-betting and fantasy-sports operator, just one month after leaving his post has raised questions about the revolving door between regulators and the industries they oversee. In response, Republican state Representative John Snyder introduced House Bill 1467 in March, which seeks to prohibit FGCC employees from working within the gaming industry for two years after leaving their roles. The bill is set to be reviewed by the Florida House Budget Committee today (8 April).
Bob Jarvis, a law professor at Nova Southeastern University, pointed out that Florida is one of the few states without a cooling-off period for gaming regulators. “It’s impossible to write a law that addresses every possible type of move,” Jarvis explained, emphasising the challenges of regulating transitions between public service and private industry.
The ethics of regulatory capture in gaming
The movement of regulators into the industries they once oversaw is not unique to gambling but is a phenomenon that economists refer to as ‘regulatory capture.’ Richard Schuetz, a seasoned gaming consultant who has worked on both sides of this divide, believes this issue is under-discussed in gambling circles. “Regulators, when they’re young, they want to do a lot,” Schuetz said. “But over time, they become a tool of the industry.”
Schuetz argued that even existing cooling-off periods may be insufficient to prevent undue influence. “I’m a strong believer in cooling-off periods. I think they should be at least two years,” he stated. However, he acknowledged that imposing longer breaks would require higher salaries for regulators to offset lost opportunities in the private sector. “You have to pay for talent,” Schuetz said, though he admitted this would be difficult to sell to taxpayers.
FanDuel defended Trombetta’s move, explaining that their operations in Florida, limited to fantasy sports contests, are not regulated or licensed by the FGCC. A company spokesperson stated: “FanDuel is not a sports betting or iGaming licence holder in the state of Florida and is not subject to regulatory oversight by the Florida Gaming Control Commission.”
Still, Trombetta’s tenure does raise questions about regulatory impartiality. As FGCC executive director, he took an aggressive stance against certain fantasy sports operators like Underdog Sports and PrizePicks however he didn’t target major players like FanDuel or DraftKings.
Can cooling-off periods truly safeguard integrity?
The ambiguity surrounding unregulated companies like FanDuel highlights broader challenges in defining and enforcing cooling-off laws. Fantasy sports, sweepstakes platforms, and skill-based gaming machines often blur the lines between regulated gambling and non-gambling products.
Jarvis noted that such grey areas make it difficult to create comprehensive laws: “No matter how you write a cooling-off requirement, you are going to have people who will try to find ways around them.”
He likened the situation to “a game of whack-a-mole,” where loopholes inevitably emerge despite best efforts. For example, former regulators barred from working for certain companies may simply join those operating in other jurisdictions or wait out their cooling-off period before returning.
Schuetz agreed with Jarvis’ assessment but emphasised that regulatory capture remains a pervasive issue across industries, from aviation to nuclear energy. “Economists seldom agree on anything,” Schuetz said, “but there’s one area that they do agree on: regulators have a tendency to be captured by the industry they’re trying to regulate.”
Both experts acknowledged that while improving rules at the margins might help, finding an effective solution remains elusive. Jarvis concluded: “If there were an easy fix, you could have done it with nuclear power… It’s never worked.”
The debate over Trombetta’s move marks broader concerns about maintaining integrity within regulatory frameworks while balancing practical considerations like attracting qualified talent.
As Snyder’s proposed bill moves forward, it is still unclear whether stricter cooling-off periods can effectively address these challenges or whether they will simply lead to new ambiguities in an already complex landscape.
