The Florida Seminole Tribe has waited long enough for the state to act and decided to pursue legal action against 11 Jacksonville Internet cafes that they say offer illegal electronic gambling machines.

Internet cafes

The Seminole Tribe of Florida filed a lawsuit against 11 Jacksonville Internet cafes and 15 owners claiming that they violated the gaming compact between the state and the tribe. (Image: Florida Times-Union)

The antitrust lawsuit, which was filed a week ago in Duval County’s Fourth Judicial Circuit Court, claims the devices violate an exclusive compact the sovereign nation signed with the Sunshine State in 2010.

That agreement gave the Seminoles the right to be the only operator of Class III gaming in Florida. Slot and video gaming machines fall into that classification. They contend that the cafes are not only  breaking the compact but are afoul of anti-gambling legislation.

A 2013 statute states that machines can not award prizes of more than 75 cents and can not accept credit cards or bills for payment, instead using quarters or tokens. Lawyers for the tribe submitted that 15 operators of the cafes were breaching that law and included them in the legal action.

“(They) engage in various forms of casino-style gambling whereby the patrons pay money in return for which they receive a chance to win greater sums of money as prizes,” they wrote.

Law enforcement agencies have had trouble enforcing the law. They have conducted raids but more venues seem to pop up. There are more than 120 internet cafes in the Jacksonville area, though it is not known how many offer the gambling machines.

Possible Financial Consequences

Part of the agreement the tribe made with the state in 2010 was in exchange for the exclusive rights to gaming they would get a percentage of those revenues.

“The Tribe has thus far paid the State well in excess of $1 billion in revenue sharing in return for the right to conduct exclusive casino gambling, and is continuing to pay the State millions of dollars per month for such exclusivity,” the complaint reads.

There is a provision in the compact that anyone being permitted to operate Class III gaming could make the agreement null and void. The tribe would then not be obligated to pay the revenue taxes to Florida.

Fighting Daily Fantasy Sports

The Seminoles are also saying the compact is at risk of being cancelled because of the state’s impending legislation legalizing daily fantasy sports. Two bills are before lawmakers that would make DFS legal and exempt it from gambling regulations.

A letter was sent to legislators from Seminole Tribe General Counsel Jim Shore warned the governing bodies that DFS could violate the exclusivity pact that exists between the two.

“By providing this notice, the Tribe hopes to avoid a situation where the State enacts legislation that inadvertently violates the Tribe’s exclusivity,” the letter reads. “Federal law requires that any reduction in the Tribe’s exclusivity must be balanced by some additional consideration from the State. Without such an agreement, the 2010 Gaming Compact would allow the Tribe to cease all revenue sharing payments to the State based on the expanded gaming contemplated by these bills.”

Senator Dana Young (R-Tampa), one of the authors of the bill, said it didn’t apply in this case since DFS is not gambling but a game of skill and exempt from the compact.