The timeline for the rollout of legalized sports wagering in Florida could be accelerated if political leaders are able to hammer out an agreement with the Seminole Tribe of Florida on a new, highly lucrative gaming compact.
With the Florida legislature set to close March 13, there are indications that the Seminoles could resume making contributions to the state’s general revenue fund if a deal can be reached. The Seminole Tribe of Florida ceased making payments to the fund after a revenue-sharing agreement with the state expired last May.
As a result, the Florida House and Senate did not include approximately $350 million in revenue from the tribe in this year’s proposed state budget. Based on the 2010 compact between the parties, the Seminole tribe agreed to share a portion of its annual revenue with the state amounting to contributions of roughly $1.8 billion over the last decade, according to figures from Florida Politics.
It comes as the Seminoles are reportedly close to reaching an agreement with the House and Senate that would give the tribe exclusivity on sports betting operations across the state, according to PoliticoPro. If a deal is reached, the tribe could more than double its annual contributions to the fund, PoliticoPro reported.
Seeing reports from @politico that a deal is close with the Seminoles to bring sports betting to Florida. Reporting by @ArekSarkissian. pic.twitter.com/ywFtmHVhnw
— Dan Back (@dan_back) February 13, 2020
Moving parts
The relationship between the Seminoles and the Governor’s office began to deteriorate as early as 2016 after a federal judge ruled that Florida breached the compact by allowing non-Indian gaming facilities to offer banked card games, in violation of the tribe’s exclusive agreement with the state. Based on the decision, the tribe could have stopped making all revenue-sharing payments at that point, according to Marcellus Osceola Jr., Chairman of the Tribal Council. Instead, the tribe continued making payments for a period of at least two years to give the state enough time to shut down banked card games at non-Indian facilities through “aggressive enforcement action,” Osceola wrote in a May 2019 letter to Governor Ron DeSantis.
The banked card games were the subject of Judge Robert Hinkle’s decision in Nov. 2016, Osceola wrote.
“Unfortunately, there has not been aggressive enforcement action against those games, which have expanded since Judge Hinkle’s decision,” — Marcellus Osceola Jr. May 2019 letter to Gov. Ron DeSantis
DeSantis, a first-term Republican, has been hesitant to endorse legalized sports betting since his narrow victory over Democratic challenger Andrew Gillum in November 2018. Speaking to a pool of reporters last April, DeSantis expressed some concern at legalizing certain prop wagers that would allow customers to bet on the result of an individual at-bat in baseball.
“If I can place a wager on whether the first pitch of a game is going to be a strike or not, well, hell, that’s a big moral hazard, because that’s not necessarily something that would affect the total outcome,” DeSantis, a former captain of the Yale baseball team, told reporters at the time.
There is a 50-50 chance that an agreement between the Seminole tribe and the state legislature could reach the governor’s desk, a PoliticoPro source said.
DeSantis’ office did not immediately respond to an email request from Sports Handle for comment.
Legal ramifications
Another complication with a potential sports betting deal through the Seminole tribe revolves around the Indian Gaming Regulatory Act (IGRA), a 1988 federal law that established a framework for governing Native American tribal gaming issues across the country. Under IGRA, compacted tribes are only allowed to offer games that are legal under state law. It’s unclear if sports betting is legal under the current compact.
“The key question is can they get this done before opponents start to make their way to Tallahassee and begin carving this deal up or pushing it through with absurd legal maneuvering that ends up bogging it down,” said John Holden, an attorney and Assistant Professor at the Spears School of Business at Oklahoma State University.
In November 2018, Florida voters passed Amendment 3, a measure that requires any legislation that expands gambling statewide to go before a referendum. However, Republican Representative Mike LaRosa has taken the position that a narrowly crafted deal that puts expanded games in control of the Seminoles would not require statewide approval.
There is some debate as to whether sports gambling constitutes “casino gambling” and whether it requires voter approval, Holden explained. In the event sports betting is authorized by the legislature, Holden expects that a lawsuit challenging the constitutionality of the bill will be filed “immediately.”
Last Spring, a proposed deal between Sen. Wilton Simpson (R — 10th district) and the Seminoles that would have allowed pari-mutuels to offer sports betting, as long as the operators paid a cut of their revenues to the tribe, ultimately fell apart.
A public relations firm representing Seminole Gaming did not respond to a request for comment.
An operator that has undertaken substantial efforts to launch sports betting and is able to show they have been “cut out,” as a result of the Seminole’s exclusive agreement may be able to overcome a standing objection, said Lawrence G. Walters, managing partner of the Longwood, Fla. based Walters Law Group.
There are conflicting reports on the role the tribe will play in a potential deal between the House and Senate. On Thursday, Republican Senate President Bill Galvano told The News Service of Florida that the Seminoles haven’t taken part in discussions. Negotiations between Galvano and Republican House Speaker Jose Oliva are still in the early stages, the South Florida Sun-Sentinel reported.
Darren Heitner, founder of Heitner Legal, P.L.L.C., believes the Seminoles have considerable clout within the state and have entrenched their position with regard to betting in general. Heitner drew comparisons between the gatekeeping role the Seminole tribe could receive by gaining exclusive sports betting rights in Florida with the position maintained by several state lotteries that mostly control sports gambling operations in their various jurisdictions.
“Is that something that you really want to put in control of a tribe? Do they have the same capacity as a state lottery? It’s an interesting question,” Heitner said.
Last month, Sen. Jeff Brandes (R – 24th district) introduced a bill, SB 968, that would authorize the Florida Lottery to regulate sports betting. Only two states, Michigan and North Carolina, have passed legislation pertaining to tribal sports gambling since the Supreme Court’s historic PASPA decision in May 2018. Washington State is getting close.
Although lawmakers appear to have made some progress in recent weeks, there are still numerous wrinkles that need to be ironed out before sports betting is legalized in Florida. Still, any pathway for legalizing sports will likely have to go through the Seminole tribe, Holden emphasized.
“(Any discussions) that there would be an open market with commercial operators competing against the Seminole Tribe or even some forecasts excluding the Seminole Tribe from sports betting altogether ignored the huge importance of the tribe to Florida, and their influence across the state,” Holden said.
