Before the first vote could happen on legal sports betting during Florida‘s special session on Monday, the chains were moved, eliminating a key revenue driver for both the state and the Seminole Indian Tribe, which will have a near monopoly on gaming if its compact is approved.
Speaker of the House Chris Sprowls announced key changes to the gaming compact agreed upon in April between Gov. Ron DeSantis and the Seminole Indian Tribe: He reported “any and all references to statewide online casino gaming” were removed from the compact, and the go-live date for potential legal sportsbooks has been moved back to Oct, 15, 2021.
The compact — which ultimately was “favorably reported” out of committee — now deals only with brick-and-mortar casinos and sports wagering, both digital and retail. The change to the compact means the state and the Seminoles will miss out on the most lucrative portion of online gambling. The current compact, if approved, is valid for 30 years.
During a three-hour-plus hearing, the Senate committee approved six bills related to gaming. The bills now move on to the Senate floor for consideration Tuesday starting at 10 a.m. local time. The committee declined to vote on three bills related to bingo after passionate testimony from a bingo hall owner, who asked that the legislature not rush any changes.
On the House side, three committees convened to discuss gaming and sports betting, including the Select Subcommittee on Seminole Gaming Compact. It was during that hearing that one of the most relevant questions about the pact arose — one House member asked if there was a possibility that the Department of the Interior, which must approve the compact, would decline to sign off due to the potential that the compact does not comport with federal law. Both George Skibine, representing the Bureau of Indian Affairs, and Jim Allen, counsel to the Seminole Indian Tribe, said that is a possibility.
“Yes, it is possible the tribe is wrong in its interpretation of Amendment 3 or that [the Department of the Interior] will not approve it,” Allen said. “That’s why we encourage you to vote in favor of this.”
Two House committees, the Select Committee on Gaming and the Rules Committee, are set to convene Tuesday to consider sports betting. With little heavy opposition to the bills in either chamber, it appears lawmakers are on track to approve the compact and legislation by mid-week.
Mobile gaming stripped
The issue before legislators, though, is not whether or not the Department of the Interior will approve the compact. It is, rather, to build a framework around the compact.
The new language essentially means that retail casino gaming and retail and digital sports betting will be the immediate focus. The following was removed from the compact: the state and tribe must “engage in good faith negotiations to consider an amendment to authorize the Tribe to offer all types of covered games online or via mobile devices to players physically located in the state” within 36 months.
“Some language in the compact could be construed to lead to the backdoor expansion of online gaming,” Sprowls explained. “Even the mere possibility of this was unacceptable. … I appreciate the tribe and Governor DeSantis understanding the gravity of our concerns and amending the compact to remove any and all references to statewide online casino gaming.”
The question of what mobile sports betting in Florida will look like was a key part of the discussion in both the Senate and House. Since details of the compact were released in April, there has been some question about whether commercial operators like DraftKings, FanDuel, or Penn National Gaming’s Barstool Sports would have a pathway into Florida. Allen insisted — before both Senate and House committees — that commercial operators not only do have entree into the state through parimutuels, but also that the Seminoles welcome other operators.
Jim Allen, CEO of Seminole Gaming, tells Florida Senate Appropriations Committee that tribes has held talks with @barstoolsports @DraftKings and @FanDuel and is interested in creating a sports betting business relationship with those companies and others. @GamblingComp
— Chris Sieroty (@sierotyfeatures) May 17, 2021
“They would not be able to offer prop betting under the provision of the compact,” Allen said in response to Sen. Jeff Brandes, who asked if companies like DraftKings, FanDuel, or BetMGM would be able to operate in the state. “But the platforms could serve as a provider and contract with the tribe or any parimutuel to run the algorithm on the back end.”
Allen went on say that commercial operators could partner with parimutuels on digital apps that would be branded by the parimutuel, but operated by these companies. He also said that he has had conversations with representatives from DraftKings and FanDuel about operating in Florida.
‘No Casinos’ doesn’t support digital
The hearing featured testimony from the Seminole Tribe, the No Casinos group that is opposed to legal sports betting and gaming expansion in the state, and representatives from parimutuels, who under the compact will be able to host sports wagering should they strike their own agreement with the Seminoles.
John Sowinski, president of the No Casinos group, which lobbied hard for the approval of Amendment 3 in 2018, said “a compact, but not THIS compact” would meet his group’s needs. Amendment 3, approved by 72% of voters, requires that gaming expansion be approved by the voters.
Ironically, the Seminole Tribe, according to attorney Jim Allen, contributed $22 million to support Amendment 3 with the understanding that while an expansion of gaming would have to go through the voters, keeping servers on Seminole lands would not technically be an expansion that must go to the voters. The Seminoles and those in favor of statewide mobile argued that by keeping servers on tribal lands, the bets were then technically made on tribal lands.
“Certainly [the Indian Gaming Regulatory Act] defines sports betting as a Class III game … but we don’t think that sports betting is part of Amendment 3,” Allen said. “We might be naive, but we are not crazy. We had extensive discussions before writing a $22 million check supporting Amendment 3.”
But Sowinski countered, saying, “We’re grateful that the tribe joined us, but when Amendment 3 was written, ‘on tribal lands means on tribal lands.'”
Earlier in testimony, Sowinski said, “The compact relies on us buying the idea that if you are standing anywhere in Florida with your phone in your hand, you are placing a bet on tribal lands. Not only does that not represent the desire of the people, but we believe it does not follow” the law.
Daily fantasy sports
Scott Ward, an attorney who represents both DraftKings and FanDuel, testified in opposition of SB 16A, a bill that would legalize daily fantasy contests. Ward said that both DraftKings and FanDuel are currently operating in Florida, where there is no law explicitly banning or legalizing DFS contests. Should the legislature pass 16A, Ward said, DFS would be legal, but without grandfathering in companies currently operating they would ultimately be in violation of the law, and they would be forced to withdraw. The bill also would prohibit DFS contests on college sports, and Ward asked that that stipulation be changed. He asked for several other minor changes related to limiting the number of entries per contest, auditing, and setting the age for DFS at 18, rather than the 21 it is set at for sports betting.
What are some of the groups lobbying to scuttle Florida's impending legalization of sports betting, you ask?
— Jay O'Brien (@jayobtv) May 17, 2021
“We are still in opposition because we need a few more changes,” Ward testified. “The bill recognizes DFS as a game of skill, not chance, … so it’s not regulated like gambling. The amendments today got some of the changes. There are a few more things that need to change to make sure those three million Floridians [who are already playing DFS] can continue doing what they do.”
— FSGA (@FSGAtweets) May 17, 2021
Hutson, the sponsor, said he was amenable to the changes, and that he initially brought the bill because he feared that once a gaming commission was established, it could set out to shut down DFS if there was no law explicitly allowing it.
Overview of the bills
Here’s a rundown of the bills:
SB 2A: This bill ratifies the compact signed between DeSantis and the Seminoles. The compact was amended in committee, altering some of the payouts to local communities, as well as some technical and language changes.
SB 4A: This bill establishes the Florida Gaming Control Commission, made up of five governor-appointees. The commission would oversee commercial gaming, but not tribal gaming.
SB 6A: This bill is a companion to SB 4A and creates a framework around privacy and public records.
SB 8A: This bill makes changes to how parimutuel facilities are regulated.
SB 10A: This bill would allow bingo in parimutuel facilities, and it drew criticism from bingo operators.
SB 12A: This bill sets the tax rate on bingo.
SB 14A: This bill deals with bingo licensing.
SB 16A: This bill would allow DFS by commercial and non-commercial entities and outlines prohibited contests.
SB 18A: This bill sets the licensing fee at $1 million with a $250,000 renewal fee.