Federal attorneys filed a brief Tuesday in their defense against two Florida parimutuels, claiming that the latest Florida-Seminole Tribe compact does not violate the Indian Gaming Regulatory Act and further explaining why state lawmakers were able to expand gaming without going to the voters.
Tuesday was the deadline for the brief, which U.S. District Court Judge Dabney Friedrich clearly thought should have been filed by a Nov. 5 hearing date. West Flagler Associates (Magic City Casino) and Bonita-Fort Meyers Corp. (Bonita Springs Poker Room) have sued both the U.S. Department of the Interior for approving a compact that allows for off-reservation wagering and the state for approving off-reservation wagering in the first place, and the case is being closely watched by tribal communities around the country.
The Seminoles, who went live with digital wagering on Nov. 1, currently have a monopoly on sports betting in Florida predicated on the idea that any bet placed anywhere in the state is made on tribal lands, because the wager will flow through the Seminole server. The model, if upheld, could change how tribes in other states negotiate compacts.
Compact said to be backed by state law
“State law authorizes persons in Florida to place the wagers at issue with the Tribe within Florida but off of the Tribe’s Indian lands,” wrote federal attorneys in their brief. “The Compact’s deemed approval, therefore, does not ‘authorize’ gaming that is ‘illegal’ in the State. ECF 1-2 at 6. As the Florida Attorney General stated, ‘Plaintiffs are wrong that online sports betting is illegal in Florida outside of Indian lands.’
“But as noted above, the State and Tribe are free to agree, for state law purposes, as well as for regulatory purposes under the Compact, that the gaming activity is deemed to occur on the Tribe’s Indian lands, consistent with IGRA and other federal laws. Thus, the Compact not only complies with federal law, it does not violate state law or any state-law specific mandates that limit the authority of the State to have entered into and ratified the Compact.”
NEW: The feds have fired back against allegations that a deal giving the Seminole Tribe control of sports betting in Florida violates federal law, pointing to a decision by DeSantis and the Legislature to let the tribe accept bets from throughout the state https://t.co/SriSibp9gr
— Miami Herald (@MiamiHerald) November 10, 2021
The plaintiffs requested a summary judgment. Friedrich last Friday said she would adhere to a previously agreed-upon calendar and aim for a decision by Monday.
Of note in the argument are a few paragraphs under the section “The Compact’s Deemed Approval Does Not Violate IGRA,” in which the attorneys hold up New Jersey and Michigan as examples of other locations where wagers on mobile devices are deemed to go through servers in approved locations. However, in New Jersey, there are no “Indian lands” or sovereign nation in play, and in Michigan, the tribes chose not to compact and are regulated and taxed by the state.
Seminoles have retail and digital monopoly
Last spring, Florida Gov. Ron DeSantis and the Seminoles agreed on a compact that will pay the state $2.5 billion over five years while allowing the Seminoles to control wagering throughout Florida. The tribe can offer retail betting at its seven brick-and-mortar locations, as well as potential future locations. It can offer digital wagering via its Hard Rock-branded platform, and it gets a cut of retail or digital wagers made through parimutuels that partner with the tribe. Five have agreed to terms with the tribe so far, though none are currently offering live wagering. The parimutuels must pay the Seminoles 40% of gross gaming revenue per wager.
The current lawsuit pits two parimutuels against the state and the U.S. Department of the Interior, which was tasked with approving or denying the compact. The DOI allowed the compact to become “deemed approved” after a 45-day review period. At the initial hearing for this case, federal attorneys said they were not prepared to argue the merits of the case, and it appeared they expected Friedrich to dismiss the case based on a lack of standing by the plaintiffs. But Friedrich extended the deadline to file a brief until Tuesday.
In the 33-page document, federal attorneys argue that the compact itself is not in violation of IGRA, which was created in 1988 to allow federally recognized tribes to offer gaming.
The attorneys wrote, “Thus as a matter of both state law, see ECF 1-2 at 6, and as provided by the Compact consistent with IGRA, see ECF 1-1 at 16-17 (Section III.CC.2), the Tribe may accept online sports bets lawfully placed with the State pursuant to State law on its Indian lands. This hybrid gaming approach ensures that (1) it is legal under state law for a person in Florida to place an online sports wager if they are not physically located on the Tribe’s Indian lands; (2) it is legal under IGRA for the Tribe to receive such wager on its Indian lands; and (3) it is legal for the Tribe to engage in sports betting when the wager is both placed and received on the Tribe’s Indian lands.”
What about Amendment 3?
Federal attorneys also wrote that the compact and expansion of gaming does not violate Florida’s Amendment 3, which was passed in 2018 and requires that any expansion of gaming go to the voters. But the the amendment does include this language:
In addition, nothing herein shall be construed to limit the ability of the state or Native American tribes to negotiate gaming compacts pursuant to the Federal Indian Gaming Regulatory Act for the conduct of casino gambling on tribal lands, or to affect any existing gambling on tribal lands pursuant to compacts executed by the state and Native American tribes pursuant to IGRA.
Two law professors say that Friday's federal-court hearing about Florida sports betting won't result in an injunction.
— Sports Handle (@sports_handle) November 3, 2021
The state, according to the brief, refers to this as the “IGRA-compact exception.” It argues that the legislature “specifically excepted gaming ‘conducted pursuant to a gaming compact ratified and approved’ under state law from otherwise-applicable state law criminal prohibitions.”
Whether or not that argument proves true, it does create another issue for the court — federal courts don’t usually noodle around in state business, and the brief suggests that the issues should be resolved in a “state forum.” To date, no lawsuits have been filed in Florida state court, though a similar lawsuit was filed in the U.S. District Court in the Northern Florida District. It was thrown out for lack of standing.