After Indian Country applauded a federal appellate court for overturning a lower-court decision that called the compact between the Seminole Tribe and the state of Florida illegal, it’s now time to consider exactly what that decision means and how it could affect tribes across the country.
There is no clear answer, according to stakeholders and lawyers experienced in tribal law. On the one hand, one attorney referred to it as a “tremendous decision” with many positive outcomes for the Seminoles and the state of Florida, but another wrote that “it won’t change a thing in California or most other states, except to add an extra element of confusion.”
In essence, the decision is yet another interpretation of the Indian Gaming Regulatory Act (IGRA) and federal and state government roles in Class III gaming. It also provides a roadmap for how a pair of Florida parimutuels can continue to keep the Seminoles from exercising their monopoly on wagering outlined in the 2021 compact.
Whatever the timeline, when the Seminoles do go live with wagering, they will make Florida the biggest state by population to do so.
One Florida constitutional law professor says the decision is a game changer — not just for tribal sports betting, but for iGaming as well.
“Any tribe that has any kind of gambling now has a blueprint to go back to their states and ask for mobile betting,” Bob Jarvis, a law professor at Nova Southeastern University, told Sports Handle. “You’re going to see expanded gaming operations by Indian tribes. Everybody is going to be clamoring for mobile betting. We always knew that having mobile sports betting was just the camel’s nose under the tent. The next logical step is to have a mobile gaming environment.”
But others say the decision won’t immediately change the face of tribal gaming outside of Florida.
“As far as the broader effect outside of Florida, I think it’s going to be pretty limited because it basically just says that gaming is OK if a state approves that,” one unnamed source told Sports Handle.
Judgment means ‘bargaining power’
The decision may have been so narrow that there will be little effect in the near term. While the justices considered the contents of the Seminole-Florida compact, the judgment itself is focused on whether or not the federal government should have approved the Seminole-Florida compact. That said, if the decision stands, it could be a critical step as tribes outside of Florida move to either get rights to gaming or alter their existing compacts.
“It gives them a certain bargaining power, leverage to get the same setup,” James Lewis, an associate at Duane Morris LLP, told Sports Handle. “They can say that they want ‘deemed approved’ language in our state and they are going to want that and point to the opinion and say, ‘It worked here.’ I think the federal decision has a lot of repercussions for other tribes. It’s a good sign.”
The state could've come up with several legally justifiable ways to legalize sports betting in Florida, writes columnist Scott Maxwell. Instead, they invented a fiction that allows betters to gamble on "tribal land" from anywhere in the state. https://t.co/KgWlfSgq02 pic.twitter.com/8y5IQkPwEs
— Sun Sentinel Opinion (@SoFlaOpinion) July 9, 2023
Jennifer Carleton, the chief legal officer for Sightline Payments who has long practiced tribal gaming law, said the decision could potentially be “a model” for the hub-and-spoke system, in which a bet placed anywhere in Florida that flows through a server on Seminole lands is considered to be a bet made on tribal land. That setup has been previously rejected in state courts, particularly in California’s Desert Rose case, where the Ninth Circuit found that placing bingo wagers while in California but not on Indian lands violates the Unlawful Internet Gambling Enforcement Act and is not protected by IGRA.
“It’s a positive decision for Indian Country as it respects the negotiations between the state and tribe,” Carleton said. “That piece of it is very important. It’s so hard for tribes to get the state to the table and a place to mutually agree on what’s beneficial.”
As has been proven over and over, before and after the Supreme Court made sports betting a states’ rights issue in 2018, compact negotiation is, at best, complicated and difficult, and, at worst, contentious. Against that backdrop, a federal court decision that says the U.S. Department of the Interior was in bounds when it approved the Florida compact gives tribes another card to play.
How we got here
In the spring of 2021, Florida Gov. Ron DeSantis signed off on a compact with the Seminole Tribe that allows the tribe a monopoly on retail and digital sports betting and also permits it to add some table games to its retail casinos. The compact also requires the Seminoles to partner with parimutuels so they can offer wagering as well. The legislature then ratified the compact and DeSantis signed that legislation into law.
The compact allows for the use of a hub-and-spoke model. The idea is that by running the bets through a server in Indian Country, IGRA, which governs gambling on tribal lands, would apply.
Within months, multiple lawsuits were filed at the state and federal levels, but the one that stuck is West Flagler and Associates vs. U.S. Dept. of the Interior Secretary Deb Haaland. West Flagler, which at the time owned two Florida parimutuels, sought to keep the Seminoles from launching their Hard Rock Digital platform. They also sought to have a court rule that Haaland’s decision to allow the compact to become “deemed approved” was beyond the scope of her powers.
As access to sports betting is easier – and Florida is next in line – the NFL has seen an uptick in violations of its gambling policy.
"It's almost like a pandemic of gambling."
— Daniel Oyefusi (@DanielOyefusi) July 7, 2023
U.S. District Court Judge Dabney Friedrich found in West Flagler’s favor — though the Seminoles did launch the platform ahead of the decision — and directed the Seminoles to take the platform down. The DOI appealed that decision to the U.S. Court of Appeals for the District of Columbia Circuit. That court also directed the Seminoles to take their platform down. Six months later, the appeals court ultimately overturned the lower-court ruling June 30.
Neither the Seminoles nor the state of Florida are party to the case. The Seminoles were rejected in asking both courts to be added.
Decision bore more questions
The recent judgment may have answered some questions, but it also brought about new ones. What will West Flagler do now? When will the Seminoles launch their Hard Rock Digital platform? How does the decision affect other tribes?
As to what West Flagler will do, its lead attorney did not reply to emails from Sports Handle. While Jarvis said he doesn’t think West Flagler will appeal, because the decision was unanimous and there is almost no chance that further appeals would change the outcome, there are multiple paths the parimutuel could take:
- West Flagler could seek to extend the life of the case in the court of appeals by requesting a repeat hearing before the three-judge panel that made the decision or requesting an en banc hearing before all 11 active appellate court judges.
- West Flagler could appeal to the U.S. Supreme Court.
- West Flagler could abandon the federal judicial system and file a new lawsuit in state court.
- West Flagler could, as Jarvis suggested, do nothing.
Each of the first three options could potentially keep the Seminoles from going live in the near term, while the final option — accepting the verdict and taking no action — would mean that the Seminoles could launch as early as when the 52-day appellate waiting period is over, which is Aug. 21. That date is ahead of both the Aug. 26 opening of the college football season and the Sept. 7 opening of NFL season.
State of affairs for Florida (legal) sports betting:
If West Flagler doesn't appeal, the earliest launch for Hard Rock would be late August. But if it does appeal, it could be months or years.
Jill Dorson with the latest-https://t.co/b9oplr12p9
— Sports Handle (@sports_handle) July 6, 2023
Whenever the Seminoles do go live with their Hard Rock Digital platform, it will be a relaunch after being live for 34 days in November and December 2021. It has been about 20 months since the tribe took the platform down on Dec. 4, 2021.
“West Flagler was able to stop Florida sports betting after five weeks, and then for 18 months, which they would see as a positive,” Carleton said. “What motivates them? They want to keep their patrons and they want to keep the status quo. If they think the litigation is going to keep the status quo, then they will probably move forward.
“The court left the door open, [saying] sports betting in Florida outside of Indian lands is a question for the state courts. If they wanted to provide a roadmap for West Flagler on how to challenge mobile sports betting in Florida again, they did that in one sentence.”
On the federal level, an appeal of any kind to the appellate court would mean that the current stay would remain in place and the Seminoles would not be able to launch until the court either allows a new hearing or rejects the request. Should West Flagler opt to file with the U.S. Supreme Court, it would want to also request a stay to prevent the Seminoles from launching the platform.
Lewis suggested that the Supreme Court may want to entertain the case to “craft their own interpretation, even if the outcome doesn’t change,” while Jarvis said he believes there is “nothing more for the Supreme Court to do.” Jarvis said that while U.S. Supreme Court has had little interest in gambling issues, the justices are interested in Indian rights and states’ rights.
Carleton said matters around Indian law “are always attractive to the Supreme Court, so I would think they are more likely than not to take it up. The issue as framed by the D.C. Circuit Court is very narrow, which makes it more attractive to the Supreme Court. I think this case has four corners, the type of thing that the Supreme Court likes.”
Indian Affairs rules still in play
Discussion and debate about West Flagler’s next steps will rage until the parimutuel’s lawyers file somewhere or the waiting period comes to a close with no action. As the West Flagler case has worked its way through the judicial system, stakeholders have also had their eyes on the Bureau of Indian Affairs (BIA), which late last year released a packet of proposals that could potentially have broad-reaching impacts on Indian gaming.
“The BIA-proposed regs would not only authorize the hub-and-spoke system, but statewide remote wagering is defined [in the proposed regulations], which opens the door for any form of internet gaming,” Carleton said. “The BIA-proposed gaming regs make that very clear. In my opinion, that has much bigger potential for other tribes than the Seminole compact approach, which is very much driven by that particular state’s law.”
The proposed regulations are still in a public comment period, and it’s unclear when the BIA will close the comment period or act on the proposals. Tribes across the country have been watching the process with interest, as many consider both IGRA and the BIA rules to be outdated. The proposed rules could have a sweeping effect as they would, in part, dictate what is and isn’t allowed for tribes, rather than allowing states and tribes to work together to make those decisions.
The legal community is split about whether or not the West Flagler verdict is legally correct. I. Nelson Rose, a professor emeritus at Whittier College and leading expert on gambling law, wrote that the verdict is “obviously wrong,” but he doesn’t believe that the Supreme Court will hear it.
Rose points out that the district court, in part, dealt with the interpretation that IGRA regulates only gaming on Indian lands and nowhere else, while the appellate court ruled that “‘any other subjects’ language in IGRA includes off-reservation sports betting, even though this residual provision clearly only applies to gaming activity conducted on Indian land.”
No matter how the case plays out going forward, the judgment is, at the moment, a victory for the Seminoles.
“It’s really rare that everybody wins,” Lewis said. “Technically, the state of Florida and the Seminole Tribe weren’t parties to the lawsuit, but they are still winners. For the federal government, state, and tribe to all win at the same time, it’s probably the best thing you could hope for unless you were the parimutuel facility.”