First FL Sports Betting Lawsuit Aiming To Block New Gaming Compact

Posted By Derek Helling on July 6, 2021

Even if the US Dept. of the Interior approves the latest re-negotiated contract between the state of Florida and the Seminole Tribe, it may not matter. That’s if a Florida sports betting compact lawsuit proves successful.

Two off-track betting sites in FL filed their complaint against Gov. Ron DeSantis and Julie Imanuel Brown, the secretary of the FL Dept. of Business and Professional Regulation, last Friday. It argues that the compact that would give the Seminole Tribe complete control over legal sports betting in Florida and violates federal and state law in several ways.

What is the Florida sports betting compact lawsuit all about?

The plaintiffs are two pari-mutuel wagering operations in southwest Florida. One is Magic City Casino in Miami. The other is the Bonita Springs Poker Room in the town by the same name. The allegations in their complaint are several and any one of them could prove to be the pivotal point in the court’s decision.

For one thing, the complaint argues that Gov. DeSantis unilaterally negotiating a new compact that brings legal sports betting to FL violates the state’s constitution. In 2018, voters approved an amendment that requires voter approval for all gambling expansion.

The rest of the lawsuit’s points are about federal law. That’s applicable in this situation because tribal gaming compacts involve federal oversight. The US Dept. of the Interior’s Bureau of Indian Affairs is currently reviewing the compact for compliance right now.

If the Bureau takes any of the opinions of the plaintiffs in this case, it will return the compact with a negative ruling for the Seminole Tribe. The lawsuit points to three federal statutes regarding gambling in its arguments.

IGRA, UIGEA, and the Wire Act

The main point of contention in this complaint is what even members of the FL legislature have expected since they approved the compact terms. The lawsuit asserts an opinion that the compact terms violate the Indian Gaming Regulatory Act because it allows for statewide online sports betting. The act explicitly limits tribal oversight of gaming to tribal lands.

The compact attempts to satisfy that point by requiring servers that the mobile wagers will be placed on to reside on Seminole lands. Thus, the court will have to decide if that is sufficient. Some direction on that point could be forthcoming from the US Congress.

US Rep. Lou Correa will shortly introduce HR 4308. If it becomes law in its current form, it would modify the IGRA in regard to online gaming. The bill explicitly allows states and tribal gaming operators to use the workaround that Florida and the Seminole Tribe are attempting here, placing the servers for online gambling apps/sites on tribal lands.

It isn’t clear how quickly that bill could advance, if at all. However, the IGRA isn’t the only leg this lawsuit has to stand on. The complaint also argues that because under FL law, sports betting is currently illegal on non-tribal lands, the online wagering component also violates both the Unlawful Internet Gambling Enforcement Act and the Wire Act of 1961.

As far as a stated end, the suit asks the FL District Court to issue an injunction preventing Brown and DeSantis from implementing the terms of the compact. That would only really prove pivotal if the Dept. of the Interior actually approves it, though.

This lawsuit may not be the only one seeking such an end for long. Additionally, there are multiple possible paths forward for FL sports betting from here.

Still a myriad of possibilities for Florida sportsbooks

What’s likely to happen now is that attorneys for Brown and DeSantis will file a response with the court. Most likely, they will ask for the court to dismiss the litigation. Their potential strongest argument will be that since the Dept. of the Interior hasn’t ruled on the compact yet, the plaintiffs have no standing to file their complaint.

Even if the court agrees with them on that point and dismisses the suit, the plaintiffs are likely to appeal to the FL Supreme Court. Of course, there’s no guarantee the FL Supreme Court will take up the case. An appeal is also likely from the defendants should the District Court rule against them.

Another scenario involves new litigation from other plaintiffs seeking similar ends. Other gambling establishments in FL could file their own lawsuits making the same arguments. Other possible plaintiffs include civic groups and municipalities in the state. Miami Beach Mayor Dan Gelber has publicly criticized the compact, for example.

An anti-gambling advocacy group in FL has also made public statements in disfavor of the compact. Should the Dept. of the Interior reject the compact or litigation prove successful at blocking its effectiveness, the parties to the compact might be back at the drawing board.

They could sidestep some of these issues by removing the online component of the compact, restricting legal wagering to brick-and-mortar sportsbooks. However, that wouldn’t eliminate the potential issue of conflict with the 2018 constitutional amendment.

Additionally, the other gambling operations in the state could still argue they are getting a raw deal by having to get permission to offer retail betting from the Seminole Tribe. Another potential solution is on the horizon, though.

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Circumventing Tallahassee altogether

The plaintiffs in the Florida sports betting compact lawsuit might prefer the terms of a possible new constitutional amendment instead. A petition behind a ballot measure for the November 2022 elections is now circulating in FL. DraftKings Sportsbook and FanDuel Sportsbook are bankrolling the initiative.

If the petition gets at least 891,589 signatures from registered FL voters, voters around the state would decide for themselves whether to expand legal gambling in their state to include online and retail sports betting. Several states have taken this approach to legalize sports betting already.

Such a measure would need a 60% rate of approval from the voter base to amend the constitution thusly. If that happens, the FL legislature and DeSantis would have the task of drawing up enabling legislation. To what extent that would involve the Seminole Tribe is unclear. However, the state, not the Tribe, would control sports betting in this scenario.

While all these concurrent dramas play out, the first to see a resolution could be the first of many lawsuits looking to block the new compact. It could be months if not years before Floridians have a clear regulatory landscape for sports betting.

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Derek Helling

Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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