Florida Online Sports Betting Plan Approved by Feds

This is a developing story and will be updated as more information comes available

Federal officials approved online sports betting provisions of a proposed Florida Native American gaming compact, bringing at least one legal mobile sportsbook to the Sunshine State.

The Federal Department of the Interior allowed the compact to take effect Friday, which will grant the right to offer craps, roulette and retail sportsbooks at the Seminole Tribe of Florida’s casinos.

The Seminoles, Gov. Ron DeSantis and the Florida Legislature had argued the online gaming provisions didn’t violate federal law. The Feds upheld that determination, writing in a letter published Friday that federal law must adjust to changing technologies and negotiated deals such as the Seminole gaming compact’s online provisions should stand.

Though some legal analysts argued the online components of compact violated federal law, Florida is now poised to launch the nation’s largest digital sports betting market as early as this fall. This could also mean several hundred tribes in states across the country can also negotiate digital gaming options with their respective state governments , but it remains to be seen when or if they will do so.

Impact

In its letter published Friday, the Interior Department determined online gaming did not violate federal statute that had previously confined betting to tribal lands. Several other tribes had attempted to approve online gaming options in recent years, all of which had likewise been rejected by the federal government or court rulings.

The DOI ruled those deals were done outside of a properly negotiated  compact and did not meet requirements that bets be placed on tribal lands. The Seminole compact determines all mobile bets are placed on the location of the physical gaming server, which will have to be tribal lands. 

Tribes in Arizona, Michigan and Connecticut had all struck recent compacts that permitted mobile betting, but agreed to do so under their respective state’s licensure agreements.

The Seminoles and Florida lawmakers argued online sports betting was permitted due to an arbitrator’s decision involving tribal gaming in Oklahoma. They also cited New Jersey’s sports betting structure which by state law deems all online gambling to take place in Atlantic City thanks to the location of gaming servers.

The Seminole tribe could launch its Hard Rock Digital sportsbook statewide by Oct. 15, the earliest date allowed to do so under the compact. The tribe’s retail sportsbooks at its Seminole Hard Rock casinos in Tampa and Hollywood and potentially additional casinos are expected to open Oct. 15.

Critically, the Feds ruled the compact does not permit tribal partnerships between the Seminoles and the state’s pari-mutuel horse track and jai alia facilities. As part of a revenue-sharing agreement, the tribe would have been able to partner with the pari-mutuel owners and other third-party sportsbooks.

Seminole Gaming officials said earlier this year leading sportsbooks such as DraftKings, FanDuel, BetMGM and Barstool Sportsbook had inquired about such deals but it appears those potential deals can’t take effect. The tribe would have have had to pay an additional tax to the state if it doesn’t partner with at least three such facilities.

The tribe is expected to pay the Florida government between $500 and $600 million annually as part of the compact, which will prohibit any other casino gaming operations from entering the Sunshine State for the next 30 years.

The deal also allows pari-mutuels to continue offering certain card games at their facilities that the tribe had argued violated a previous compact. The Seminoles suspended paying the state gaming proceeds in 2019.

Next Steps

Friday’s ruling comes as DraftKings and FanDuel push a signature drive that, if approved, would place a separate online sports betting measure on the state’s 2022 ballot. Not surprisingly, the Seminoles oppose the measure. It remains to be seen how the tribe – or other major Florida industries – will now pursue the competing online betting measure.

In the meantime, a lawsuit brought by a Florida pari-mutuel operator seeking to thwart the compact remains in the legal system. Anti-gaming groups, notably “No Casinos,” have also threatened lawsuits specifically against the online gaming provisions, though it’s unclear what action these groups may take after the fed’s decision.

Bottom Line

The federal decision likely assures Florida’s legal online sports betting begins this year. That doesn’t mean Florida sports betting interest has subsided. Numerous additional potential sports betting avenues – and challenges – remain in a state of 20 million residents and more than 120 million annual tourism visits.

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