After a federal court ruling to reaffirm the Seminole Tribe of Florida’s gaming compact with the state, it seems likely that sports betting will be back up and running in the Sunshine State within the next month.
PlayUSA spoke with several gaming attorneys to get their thoughts on the prospects for continuing the case against the Seminole compact.
The DC Circuit Court of Appeals ruled June 30 that the District Court erred in invalidating the Seminole compact, which was the first tribal-state compact to include statewide online sports betting under the Indian Gaming Regulatory Act (IGRA).
Although they don’t all agree on the chances for further legal challenges against the compact, the gaming attorneys see all the options as longshots and don’t think appeals at the federal level or new cases in state court will keep the Seminole from relaunching sports betting much longer.
One of those attorneys, Marc Dunbar, works for the Seminole but clarified that he doesn’t speak for the tribe.
“Now football season is coming,” Dunbar said. “From a business standpoint, there certainly is money to be made having the only sportsbook in Florida during football season. Business guys are going to do what business guys do, lawyers will make our recommendations, and, at the end of the day, the tribal council will make that decision.”
Seminoles sports betting relaunch already in motion
Since the ruling, the Seminoles have listed job postings for sportsbook employees and craps and roulette dealers at its seven tribal casinos.
But the DC Circuit has not yet issued the mandate to formerly close out the appellate proceeding and send the ruling to the district court. And plaintiffs have options to appeal that could extend the case and delay issuance of the mandate.
The plaintiffs have 45 days to file for a rehearing, putting the deadline at Aug. 14. In the absence of such a filing, the DC Circuit Court must issue the mandate reaffirming the Seminole compact by Aug. 21.
Delaying the mandate doesn’t necessarily block the Seminole tribe from relaunching sports betting. If the DC Circuit does opt to withhold the mandate while the appeals process plays out, the Seminoles can test the boundaries and press forward.
The Seminoles don’t really have a red light right now. It’s more of a yellow light.
“While I expect the Seminoles to follow the mandate, they’re under no obligation to hold off,” Florida-based gaming attorney Daniel Wallach told PlayUSA. “They can basically do whatever they want. And the downside risk is having the court not take kindly to that.”
If the DC Circuit withholds the mandate past Aug. 21 because of appeals, it becomes a cost-benefit analysis for the tribe on whether it’s worth having sports betting for the start of the college football and NFL seasons.
Once the Seminoles relaunch the Hard Rock Bet app, Florida would take over as the largest state by population with legal sports betting operations.
“I would assume the Seminoles are moving forward with implementing the compact, including sports betting, as we speak,” Washington DC-based tribal attorney Derril B. Jordan told PlayUSA. “I don’t think they’re waiting for anything.”
Possibilities to continue legal challenge all long shots
There’s a lot of money at stake. The quicker the Seminoles execute the compact, the sooner the state gets its revenue share of $2.5 billion over the first five years. And the compact isn’t just about sports betting. It includes the addition of craps and roulette at Seminole properties, as well as building three more tribal casinos.
With the strength of the DC Circuit ruling, the Seminoles can rightly feel emboldened to begin executing its compact anew. Gaming attorneys say that options to continue the case are long shots even to be heard, let alone be successful.
“We have an opinion that’s pretty much bullet-proof from appellate review,” Dunbar said. “I don’t see any mechanism for anyone to stop it now.”
Even if options to appeal are unlikely to be successful, Wallach believes plaintiffs will attempt to continue the case by filing for rehearing and petitioning the Supreme Court.
“My expectation is they’ll do both. As an appellate lawyer, what’s the downside of going for a petition for rehearing? The mere filing of the petition is not an expensive proposition and it helps sharpen the analysis for the Supreme Court. If you’re the plaintiff, your goal is to keep the mandate from being issued. The likelihood of rehearing being granted is exceptionally low. But it does prevent the mandate from being issued, and once the mandate is issued then the tribe will definitely move forward with online sports betting without delay.”
Here are the ways West Flagler Associates and other plaintiffs could seek to extend the case and delay issuance of the mandate.
Request a rehearing
Plaintiffs have two ways to ask for a rehearing.
They can request a panel rehearing before the same three-judge panel on the grounds that the court overlooked some point of fact or law.
The more likely option is requesting a rehearing en banc, or before all 11 circuit judges. En banc requests may be granted if the decision conflicts with another decision by the court or the issue is deemed of exceptional importance.
Doing so successfully requires six of the 11 DC Circuit judges to approve a rehearing. Assuming the three judges who participated in the ruling would not grant a rehearing, that means six of the eight remaining judges need to see merit. If a petition for rehearing is filed, a decision likely won’t take long.
“En banc review on a 3-0 opinion is like 1 in a billion,” Dunbar said. “It’s not going to happen. And if you read the opinion, it’s a very well-written opinion. Obviously, I’m biased because we won, but they kind of walked through this is what IGRA is for and this is the authority of the Secretary.”
Any conflict likely would center around whether a tribe can compact with a state to include gaming off Indian lands. The DC Circuit ruled that while compacts under IGRA can legally authorize a tribe to conduct gaming only on its own lands, not every aspect of the gaming must be on Indian lands.
Wallach contends the ruling conflicts with two prior DC Circuit decisions that said gaming under IGRA could only be on Indian lands: Citizens Exposing Truth About Casinos v. Kempthorne (2007) and Amador County, CA v. Salazar (2011).
But Wallach still believes granting of rehearing is unlikely.
“They’re both statistical longshots, but it’s significantly more likely to go before the Supreme Court because the Supreme Court takes on more cases than the DC Circuit grants rehearings. And the grounds for granting ceriorari are much broader than the grounds for granting rehearing en banc. The Supreme Court can consider circuit splits among the various federal appeals courts, whereas the DC Circuit is focused on intra-circuit conflicts.”
Appeal to the US Supreme Court
The plaintiffs have 90 days to file a petition with the US Supreme Court, but those 90 days can be measured from the date of the decision or the date of a denial of a petition for rehearing. So without filing for a rehearing, the plaintiffs need to file with the Supreme Court by Sept. 30. But with a rehearing, they could have until December or January.
Four of nine Supreme Court justices must decide the court should hear the case. The US Supreme Court hears 70-to-80 cases a year. It typically grants cert in cases that could have national significance or harmonize conflicting decisions in federal circuit courts.
Whether the DC Circuit would put off issuing the mandate if a petition is filed with the Supreme Court is debatable. Dunbar doesn’t think a petition filed with the Supreme Court would prevent the DC Circuit court from issuing the mandate.
If the Supreme Court took the case, it likely would issue an injunction to stop the Seminoles from offering online sports betting.
Arguments for and against US Supreme Court taking case
Wallach said he is bullish on the Supreme Court granting cert but admits it would be an uphill battle.
“There have been a number of lower court decisions addressing whether IGRA allows tribal gaming off Indian lands. That has been a topic of debate since the demise of PASPA, exemplified by two attempts to revise IGRA in Congress and [Department of the Interior] rulemaking to interpret IGRA to allow for compacting of online gaming or sports betting.”
Wallach cites seven Ninth Circuit and one 10th Circuit decision that he finds in conflict with the DC Circuit ruling. Among them are California v. Iipay Nation (2016, 2018) and Artichoke Joe’s California Grand Casino v. Norton (2003).
Dunbar argues that the difference is those cases involved tribes attempting to execute gaming that wasn’t legal in the state. In contrast, the Seminoles reached an agreement with the state to permit this gaming with elements taking place off Indian lands.
“There’s not this inter-circuit conflict you need to resolve. In other cases, tribes were pushing the envelope when the state itself hadn’t said yay or nay on the issue. Here we have a clear indication that the tribe and state agree on what is and isn’t legal gambling. If you put that in a compact, it goes to Interior and the Secretary says that’s a fair exchange under IGRA, that’s within the Secretary’s authority.”
Wallach also thinks the case checks the box for national significance. If the Supreme Court declines to take the case, Wallach could see it leading to further lawsuits and more fracturing of federal courts around this issue.
“The heat around this issue has been building the past couple years, and this is the perfect opportunity for the US Supreme Court to resolve the question once and for all. The DC Circuit is not going to be the last federal court to rule on this issue. If other tribes and states attempt to copy the Seminole-Florida model, there is potential for a legal challenge in that jurisdiction.
“And once the Department of the Interior finalizes its proposed rulemaking on IGRA compacts, which mirrors the Seminole Tribe’s arguments on the compactibility of internet gaming, that will open the door to further legal challenges on the topic.”
Dunbar counters that other circuits would defer to the DC Circuit ruling.
“You’ve got to remember, they don’t call the DC Circuit the Junior Supreme Court for nothing,” Dunbar said. “The DC Circuit interpreted a matter of federal administrative procedure and a federal statute. That’s squarely within the DC Circuit’s charge. I don’t expect any other circuit to question what the DC Circuit decided here.”
State lawsuit also faces obstacles
If there are no options to continue the case at the federal level, the DC Circuit did provide the blueprint for a state challenge.
The three-judge panel’s ruling stated:
“Whether it is otherwise unlawful for a patron to place bets from non-tribal land within Florida may be a question for the state’s courts.”
“It’s like a gold-plated invitation to file in state court,” Wallach said.
But Dunbar isn’t concerned with a state challenge under Amendment 3. The Seminoles supported the ballot measure amending the state constitution to prevent the expansion of gambling because it had a carve-out for the Tribe.
“Our constitution has a specific exemption for compacts under IGRA,” Dunbar said. “I’m pretty confident if someone challenges the hub-and-spoke model under the Florida constitution, Florida courts are going to determine that the governor and tribes did exactly what they are allowed to do.”
Scott Crowell, a tribal gaming attorney in Arizona, also doesn’t think a state challenge of the compact would be successful. And, worst case scenario, he says the state courts force the Seminoles to go back to voters for clarification. He expects voters would support the tribe offering online sports betting.
“The court does opine that West Flagler can file suit to determine whether or not the online wagers are legal under state law,” Crowell said. “But the enabling legislation passed by lawmakers clearly authorizes the wagers, so I think it would lose on that point.”
State challenge unlikely to deter Seminoles
Most lawsuits on gaming in Florida end up going to the Florida Supreme Court. That means the case could take years.
But a state court wouldn’t have the authority to issue an injunction stopping two sovereign entities, the Seminole Tribe and the State of Florida, from executing a federally approved compact.
“Florida court wouldn’t have any jurisdiction over tribes, so it couldn’t enjoin the Seminole nation from exercising its rights under the compact,” Jordan said. “So I’m not sure how a challenge in state court would stop or slow down the tribe from implementing the compact.”
Dunbar faced this issue firsthand more than 20 years ago. Back then, he worked for a client trying to prevent the first Seminole compact from taking effect. They asked for the Florida Supreme Court to go to federal court and request an injunction to stop the compact. But they couldn’t get it. He expects any attempt to stop this Seminole compact in state court to go the same way.
If a Florida court decides the hub-and-spoke model is invalid under state law, then the Seminoles would have to stomp the brakes on sports betting once again. But that’s only if it reaches a final decision by the Florida Supreme Court.
“If a Florida court determined that the act and enabling compact were unconstitutional, I think that would pull the rug out from under the compact,” Jordan said. “But that’s on a final decision, not an injunction.”
Seminoles aren’t ones to wait and see
In November 2021, the Seminoles launched sports betting on the Hard Rock mobile app four days before the US District Court judge was to hear arguments.
For 34 days, the tribe offered online sports betting in Florida, continuing even after the district judge struck down the compact.
So it’s clear that the Seminoles aren’t going to ask for permission to begin offering sports betting. They are more likely to relaunch and make someone force them to take it down.
“We already know that the Seminoles continued online sports betting for three weeks in the face of an adverse court ruling back in November 2021,” Wallach said. “So with that ruling now vacated, even though it’s not final, I can easily envision the Seminoles relaunching online sports betting as soon as rehearing is denied, which could potentially happen in early-to-mid September, right in line for the launch of college football and the NFL.”
The NFL season begins Sept. 7. Though Dunbar sees the big LSU vs. Florida State game Sept. 3 and suspects the Seminole Tribe would like to give Floridians a legal option to bet on the Seminoles team.
But sports wagering really isn’t the biggest part of the compact. So the Seminoles could also choose to wait until all the smoke clears on online sports betting and focus on other compact areas.
“The tribe offered Florida a half billion dollars a year to do this, and the tribe isn’t going to make half a billion a year off sports betting in Florida,” Dunbar said. “So if the tribe chooses from a business standpoint to keep the app down while litigation is filed, that isn’t necessarily a bad business call. If it chooses to flip it on, it isn’t necessarily a bad business call.”