Lawsuit Targets Sports Betting Provision in Amended Florida Tribal Compact

Posted on: July 5, 2021, 11:55h. 

Last updated on: August 7, 2021, 02:36h.

Two affiliated gaming companies are going to court to quash parts of the amended gaming compact Florida legislators approved in May. That deal would give the Seminole Tribe of Florida exclusive statewide rights on sports betting, including mobile access.

Florida sports betting lawsuit
Florida Gov. Ron DeSantis (left) and Seminole Tribe of Florida Chairman Marcellus Osceola Jr. hold a finalized copy of the amended gaming compact between the state and the tribe during a signing ceremony in April. Last week, two Florida commercial gaming properties filed a lawsuit against the sports betting provisions of the deal. (Image: Gov. Ron DeSantis/Twitter)

West Flagler Associates, Ltd., which operates the Magic City Casino in Miami, and the Bonita-Fort Myers Corp., which operates the Bonita Springs Poker Room, filed the suit in the US District Courthouse in Tallahassee on Friday. It named Gov. Ron DeSantis and Florida Department of Business and Professional Regulation Secretary Julie Brown.

Both gaming entities are owned by Southwest Florida Enterprises Inc.

DeSantis negotiated the amended tribal gaming compact with the Seminoles in April. If approved by the US Interior Secretary Deb Haaland, Brown would be responsible for overseeing the approved compact.

At the heart of the lawsuit, the casino and poker room claim the amended agreement runs afoul of the 1988 Indian Gaming Regulatory Act (IGRA). That law claims that tribal nations have the right to operate gaming on their lands provided that the activity is legal under federal law and allowed by the state. The suit states that the IGRA allows for tribal gaming to only take place on tribal lands. Further, it cites a state law passed 11 years ago that allowed for tribal casinos only on sovereign territory.

The casino and the poker room want the court to bar the “off-reservation sports betting provisions” of both the compact and the state implementation law from being enacted. They also seek an injunction against DeSantis that would keep him from working with Seminole authorities in getting federal approval for the compact.

A message to DeSantis’ office was not returned Monday.

Sports Betting Lawsuit May Be Pre-Emptive Strike

The agreement with the Seminoles guarantees the state $2.5 billion in revenue over the next five years in return for allowing the Seminoles to construct three more casinos and offer more table games, as well as sports betting.

Not only does it allow them to offer mobile sports betting if that’s deemed legal, but it also allows them to negotiate with pari-mutuel gaming facilities, like Magic City and Bonita Springs, for the right to have betting kiosks at their facilities. Magic City operates a jai-alai fronton, while Bonita Springs has a racing and jai-alai simulcasting center.

Last month, the Seminoles sent Magic City a letter inquiring about its interest in offering sports betting. According to the June 24 letter, a copy of which was filed with the suit, Seminole Gaming CEO Jim Allen gave Magic City until next Monday (July 12) to respond.

The plaintiffs state that if they choose not to participate, or if they’re unable to reach an agreement with tribal leaders they become “shut out” of the market.

“Accordingly, the pari-mutuels will not only lose the walk-in traffic on which their business models are based, which will ultimately affect their revenue from slot machines, card rooms, and pari-mutuel wagering, as well as the ancillary entertainment and dining options offered to patrons of their facilities – but they are also being denied the opportunity to compete on a level playing field with the Tribe,” the complaint states.

Florida-based gaming law attorney Daniel Wallach, who first reported the news of the lawsuit on Twitter, noted that the lawsuit may be focused on keeping a severability provision in the compact from being enacted that would benefit the tribe, which operates seven Hard Rock casinos in the state.

In other words, the intended audience for this pre-approval lawsuit may very well be Secretary Haaland, in order to persuade her to reject the compact, thereby preventing the severability clause from creating a brick-and-mortar monopoly on Indian lands,” Wallach tweeted.

The lawsuit likely won’t be the only challenge the compact faces. Anti-gaming advocates say the bill goes against a 2018 state constitutional amendment that requires voter approval to authorize commercial casino gaming in the state. In addition, sports betting operators FanDuel and DraftKings have teamed up to push for a referendum on the 2022 ballot.

Congress May Clarify Tribal Access to Online Market

A day before the lawsuit was filed, two US congressmen sponsored a bill in the House of Representatives that may make the Florida sports betting lawsuit moot.

US Reps. Lou Correa (D-Calif.) and John Katko (R-NY) filed HR 4308 Thursday, which would allow tribal casinos to offer online gaming by updating the IGRA. In remarks to Congress on the bill, Correa said there have been questions about whether the 33-year-old federal law would cover online gaming activities.

“This bill would clarify that for purposes of tribal government gaming, the location of the wager occurs at the location of the server, unless a state and Indian tribe otherwise agree,” Correa said.