Florida Sports Betting Update: Feds Say Seminole Compact Meets IGRA, State Law

The amended Florida gaming compact with the Seminole Tribe of Florida that the federal government deemed as approved earlier this year does not violate the Indian Gaming Regulatory Act (IGRA). That’s even though officials with the Interior Department conceded that federal law states that the location of a wager is based on where the bettor is located.

That might seem to indicate federal officials are conceding a point raised by Florida-based pari-mutuel operators. They are asking a US district judge in the District of Columbia to block certain provisions of the Seminole compact. But  attorneys for the federal government say the agreement designed to give the Seminoles exclusive rights to operate sports betting was handled properly.

In a memorandum filed late Monday in the DC federal district court, Rebecca Ross, a Justice Department attorney representing Interior Secretary Deb Haaland and the Interior Department, argued that the Magic City Casino and the Bonita Springs Poker Room have no case against the government.

Ross said that the pari-mutuels’ argument that bets made off tribal lands are not allowed by IGRA, the 33-year-old federal law regulating Indian gaming, “reflects a misunderstanding” of how tribal compacts work.

The State and Tribe are free to denominate where the gaming occurs for state or tribal law purposes, and moreover, IGRA permits the Tribe and the State to allocate jurisdiction and regulatory authority over the gaming activity addressed in the Compact consistent with federal law, including IGRA,” the defendants’ memo states.

The feds filing was in response to a request made by US District Judge Dabney Friedrich during a nearly two-hour hearing on Friday. That was regarding the motion for summary judgment or an injunction sought by Magic City and Bonita Springs.

Federal officials want the case dismissed.

Interior Dept. Deemed Florida Compact Approved

The pari-mutuels operators filed the suit in August. They claimed the compact’s provisions give the Seminoles the rights to statewide online betting. It also allows tribal gaming leaders to establish a “hub-and-spoke” system with pari-mutuels, which went against federal law because those wagers would be placed off tribal land.

Prior to  Gov. Ron DeSantis and Seminole Chairman Marcellus Osceola Jr. signing the amended compact in April, sports betting was illegal in Florida. The vote lawmakers took to pass the compact in a May special session also served as the vote to legalize sports betting in the state.

By giving the Seminole Tribe statewide sports betting rights and additional table games at its casino, Florida stands to receive $2.5 billion over the next five years and $6 billion by 2030.

Pari-mutuels Already Claim Damage from Sports Betting

The plaintiffs, in this case, are not contending the Seminoles can’t offer sports betting at their tribal casinos. However, by giving the tribe statewide rights, the pari-mutuel operators say the compact will harm them, because they will not be able to offer it themselves to their customers.

During last Friday’s hearing, a lawyer for the pari-mutuel operators said their daily handle dropped by 35 percent after the Seminoles went live with a Nov. 1 soft launch of its Hard Rock Sportsbook.

However, an amicus brief submitted last month by Florida Attorney General Ashley Moody makes further note. The state cites that IGRA allows states and tribes to include “any other subjects that are directly related to the operation of gaming activities” in the compact negotiations.

“The bets and wagers placed by individuals physically located off Indian Lands directly relate to the operation of online-gaming activities physically housed on Indian Lands,” Moody said in the brief. “They therefore are expressly made a permissible subject of the Compact.”

Other Parties Involved in Case

The two pari-mutuel operators and the federal government are listed as the plaintiffs and defendants, respectively. However, there are other parties involved in the case as well.

The Seminole Tribe has sought to intervene in the case and would seek a dismissal of the case. Tribal leaders argue they have a right to take part in the litigation because the outcome would directly impact their interests.

In addition, a Florida anti-expanded gaming group called “No Casinos” organized a separate federal lawsuit in the DC. The organization and other individuals are seeking to have the entire compact blocked, because they argue it goes against an amendment to the Florida constitution. That amendment, which voters ratified in 2018, requires any attempt to expand casino gaming to go before the voters first. Friedrich also heard their arguments against the compact during Friday’s hearing.

In a separate filing in that case, also submitted on Monday, the federal government clarified its stance. It said Florida’s negotiations with the Seminole Tribe to give the sovereign nation exclusive rights to sports betting – and allowing the tribe to offer roulette and dice table games at its Class III casinos – do not violate IGRA or any other federal law or constitutional provision.

Indeed, tribes across the country have been granted, through compacts, the exclusive right to conduct certain forms of gaming in exchange for providing revenue sharing payments to the state, and exclusivity is the very justification that allows for such revenue sharing,” the government argued.

Florida officials also submitted an amicus brief in the “No Casinos” case, doing so last week.

In that brief, Moody points out that the referendum voters passed in 2018 included a carve-out exception for Indian tribes negotiating Class III compacts with the state.

“This language expressly permits the state to enter into an IGRA compact with an Indian tribe without a referendum,” wrote Moody, who added the sponsors of the measure and the Florida Supreme Court agreed with that interpretation.

Showdown in State Court?

The essence of Monday’s two filings from the government is that Interior officials followed federal statutes accordingly.  Most of the claims the pari-mutuel operators and the anti-expanded gaming parties make involve state laws.

While federal courts can make rulings on state laws, Ross urged Friedrich in both filings to instead abstain if she had questions or rejected the state’s points in its amicus briefs.

“The court should consider refraining from reaching such questions, as plaintiffs presumably could and should resolve these issues in an appropriate state forum,” Ross wrote. “Indeed, since many of the claims and relief sought in these cases involve the state and state law, a state forum would be the more appropriate for any such challenge.”

Regardless of how Friedrich rules in the case, and even if one of the plaintiffs were to pursue a case in the Florida courts, it’s highly likely the case will make its way through the federal court system. That’s because it could impact how states and tribes negotiate future compacts.

Federal Lawyer: No “Gamesmanship”

Throughout the hearing, Friedrich openly expressed her frustrations at the response the federal government submitted and the responses Ross gave her. Friedrich was stunned that federal lawyers did not adhere to the briefing schedule she laid out when the plaintiffs made their motion for either summary judgment or an injunction.

Toward the end of the hearing, the judge wondered if the government’s actions were intentional. Ross addressed that in a footnote in her response.

“That was certainly not the intent and counsel respectfully disagree that they engaged in gamesmanship. Counsel asserted positions on behalf of Federal Defendants in good faith, focusing on the issues that Federal Defendants believe necessary to resolve this case, including this Court’s jurisdiction, and sought to narrow the issues rather than to delay the proceedings,” the footnote stated.

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