Federal Attorneys Defend Florida’s Ability to Sign Gaming Compact with the Seminole Tribe
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Tuesday became an important day in the ongoing progress towards legalized sports betting in Florida as federal attorneys filed a brief in their defense against two Florida parimutuels who are suing the United States Department of the Interior. Sports betting launched in a limited capacity on November 1, with Hard Rock Sportsbook now live in Florida. United States District Court Judge Dabney L. Freidrich is expected to make a summary judgment by November 15, and until then, sports betting will be permitted to continue in the state. The federal attorneys’ statements on Tuesday provide some insight into the legal ramifications of what has already taken place in Florida.
Federal Attorneys Deal a Blow to Plaintfifs
West Flagler Associates (Magic City Casio) and Bonita-Fort Meyers Corp. (Bonita Springs Poker Room) have sued the United States Department of the Interior for approving Florida’s compact allowing off-reservation wagering. Their stance is that the Indian Gaming Regulatory Act of 1988 (IGRA) does not allow tribes to oversee off-reservation gambling. However, the federal attorneys stated that the “hub-and-spoke” system grants the Seminole Tribe the ability to claim sports bets placed anywhere in the state as long as Seminole servers process them on tribal land.
Federal Defendants Make a Concession
One statement made by the federal defendants raised some eyebrows as they stated that “under federal law, the location of the bettor determines where the bet is placed.” A tribal-state compact cannot alter that law, and therefore, a bet placed outside the confines of tribal lands does not fall under IGRA but is regulated by state law. Federal attorneys stated that the federal government has no jurisdiction over whether or not bets placed not physically on tribal lands are legal or not. In addition, the Florida Attorney General stated that “plaintiffs are wrong that online sports betting is illegal in Florida outside of Indian lands.”
Seminole Tribe and Sports Betting Monopoly
On May 25, 2021, Florida Governor Ron DeSantis signed off on a new tribal compact that would effectively grant the Seminole Tribe a monopoly over Florida retail and digital sports betting. In exchange, the Tribe promised to pay the state $2.5 billion over the first five years of the deal in addition to the proposed tax rate of 15% paid by operators. Five approved parimutuels have partnered with the Seminole Tribe, and they will establish their partnerships with operators. Those partners must pay 40% of their gross gaming revenue to the Seminole Tribe.
What About Amendment 3?
Many invested parties have referenced Florida’s Amendment 3 in discussing the legal ramifications of sports betting in the state. Amendment 3 was passed in 2018 and required gaming expansion to be voted on by the state’s citizens. Critics of Flordia’s gaming compact expansion reference Amendment 3, saying it violates the constitutional amendment because voters didn’t have the chance to consider the addition to the compact. However, the amendment also includes language speaking to the ability for tribes to negotiate gaming compacts under the IGRA to affect any existing gambling on tribal lands. The state refers to this piece of the amendment as the “IGRA-compact exception.”
What Comes Next?
United States District Court Judge Dabney L. Friedrich will still make her summary judgment by November 15. Still, these statements by federal attorneys give us a strong indication of which direction the federal government is leaning on these issues. With DraftKings and FanDuel vying for spots in the market and plenty of existing parimutuels up in arms about the sports betting expansion, these issues are unlikely to be resolved anytime soon. However, the lawsuits from West Flagler Associates and Bonita-Fort Meyers Corp. are not expected to be a significant obstacle to the Seminole compact following these statements by federal attorneys, which represents a significant step in the right direction.
