Florida Sports Betting, Gaming Compact Signed Into Law as More Challenges Await

Florida Sports Betting, Gaming Compact Signed Into Law as More Challenges Await article feature image

Josh Hedges/Zuffa LLC. Pictured: Florida Gov. Ron DeSantis.

Florida Gov. Ron DeSantis signed legislation enacting his state’s groundbreaking gaming compact with the Seminole Tribe Tuesday, a perfunctory step that advances the massive deal toward an uncertain federal approval and likely legal challenges.

The compact, as written currently, will allow statewide mobile wagering and retail sportsbooks to begin on Oct. 15. The Seminoles can also offer craps and roulette at their seven casinos and can also open up to three more gaming facilities on tribal lands in South Florida.

The 30-year deal also grants the tribe exclusive rights to virtually all other gaming forms. In exchange for exclusivity, the tribe will guarantee the state $2.5 billion over the next five years and at least $400 million or $500 million through the rest of its duration, depending on what components survive further federal and state approval.

Though negotiated between the government and the tribe, the compact was still subject to legislative approval. Lawmakers couldn’t amend the compact, and could only vote yes or no on the complete package during a special session held earlier this month.

Despite bipartisan reservations from multiple lawmakers, the deal passed the Senate and House with overwhelming margins. Many lawmakers said the opportunity for hundreds of millions in new annual revenues, after years with no direct financial gambling contributions from the tribe, was too much to reject.

The new compact replaces a 2010 deal that the Seminoles argued had been violated when state regulators didn’t prevent pari-mutuel facilities from offering certain types of card games. The tribe argued these card games violated the exclusivity clause of the 2010 deal and suspended payments back to the state in 2019.

“The breakdown of the 2010 compact has denied the state of Florida any revenue derived from the Seminole Tribe’s ongoing gaming operations — including what is the most profitable casino in the United States, located in Hillsborough County. This changes today,” DeSantis said in a statement following the deal’s legislative approval on May 19.

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Next Steps

The federal Department of the Interior must now approve the deal. The DOI has 45 days from officially receiving the signed deal to make a decision.

Even some of the compact’s most ardent supporters believe parts of the deal are in jeopardy. Federal law and ensuing court decisions narrowly permit gaming on tribal lands; mobile gambling has not been permitted under the law.

That would seem to prohibit the deal’s online sports betting provisions. If passed, the Seminoles could open a statewide mobile sportsbook. Proponents argue placing computer servers on tribal lands fulfills the federal law’s requirements and also cite an Oklahoma arbitrator’s opinion backing their ability to do so.

But permitting the Seminoles, when courts and federal officials have prohibited similar online gaming offerings from other tribes, would appear to invalidate these prior rulings and drastically upend decades of tribal gaming policy.

The compact includes a “severability” clause that allows it to go into effect even if certain portions are rejected by federal officials. Theoretically, this could mean the tribe could open retail books on tribal lands but not a statewide mobile offering.

Notably, the tribe is still on the hook for roughly $400 million in annual payments with or without sports betting. The number grows by another $100 million if sports betting, as designed in the current compact, is approved.

The deal also permits the Seminoles to contract with pari-mutuel operators and other sportsbook brands. This “hub-and-spoke” model could also run afoul federal law.

Legal Challenges

Florida anti-casino advocates are also threatening legal action even before the compact reaches the Interior Department.

Led by No Casinos, a Florida advocacy group, compact opponents are arguing the deal violates a 2018 voter-backed constitutional amendment that prohibits casino gambling expansion without voter approval. Lawmakers acknowledged the new deal in fact “expands” gambling, but the literal definition is not the same as the legal definition. Proponents argue the amendment doesn’t apply to tribal gaming deals and that sports betting was not a common casino game when voters approved the amendment in 2018.

The pending court decision sets up another variable for what would be one of the most consequential gaming and sports betting deals in the country.

The nation’s third-most populated state and one of its leading tourist destinations, Florida could bring a drastic new step for legal regulated sports betting. The governor’s signature is a key step, but the deal’s final result is far from determined.

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