When the Florida State Legislature opens Tuesday morning, it will do so with sports wagering as part of the docket. So far, two lawmakers have filed bills that outline a framework for legal sports wagering in the state, while Gov. Ron DeSantis has been vocal about ways to keep Florida a top tourism destination, and the Seminole Tribe, which runs most of the tribal gaming in the state, has remained … silent. Multiple industry sources say that without the Seminoles, sports betting won’t gain traction this session.
In the last 10 months, Florida has been home to the “NBA Bubble” and the Super Bowl. The bubble, the single site where the NBA finished out its postponed 2019-20 season during the COVID-19 crisis, was an experiment that kept all qualified NBA teams in sealed-off lodging, practice, and game facilities at Disney World for months. And the Super Bowl in Tampa last month marked the first time the home team played in a Super Bowl, when the Buccaneers beat the favored Kansas City Chiefs.
“Gov. DeSantis has made it a priority to make Florida the destination [as the] sports and tourism capital of America,” Rep. Chip Lamarca told Florida Politics last week. “Floridians and visitors alike demand entertainment choices. I look forward to working with all interested parties in the legislature on a bill that makes Florida a major player in the online and retail sports wagering industry to help fill budget shortfalls. Bottom line? Safe and regulated domestic sports wagering is an industry Florida deserves.”
Seminoles left out, but will drive process
Of all of the arguments re: legalizing sports betting that I have seen and heard made in state capitals, the most effective – by far – is “We can’t let [OTHER STATE OR COUNTRY] take our money”.
Interesting to see the “tourist” revenue capture angle woven into this one. https://t.co/2pEI0D0xVm
— Chris Grove (@OPReport) February 26, 2021
As lawmakers and the governor look to move forward and create hype about sports betting, the elephant in the room that no one seems to be addressing is Indian Country, which under its compacts has exclusivity for casino gaming. Tribal gaming dates to 1979 in Florida, when the Seminole Tribe opened its first casino in Hollywood. The tribe currently has six properties in the state.
For reasons unrelated to sports betting, the Seminoles in 2019 stopped paying the state $350 million a year from gaming revenue. At the time, the Seminoles claimed their gaming exclusivity was violated by banked card games that were allowed at the state’s racetracks and jai lai frontons. Tribal representatives hand-delivered a letter to DeSantis on May 14, 2019, explaining their position. The argument is not unique to Florida — California tribes have long been at odds with the state over card rooms, and in Washington State, lawmakers did grant sports betting exclusivity to federally recognized tribes and let a bill to allow commercial sports betting at card rooms die.
But when the payments in Florida stopped, according to sources, the state was flush with cash, and the state’s reaction to the stopped payments amounted to a shoulder shrug.
Reeg on the potential of sports betting in Florida: "Florida is an interesting place . Every legislative session our lobbyists are super optimistic and by the end of the session, they say we just couldn't get anything done." He expects it won't happen @CDCNewswire
— Howard Stutz (@howardstutz) February 25, 2021
A year into the COVID-19 crisis, budget deficits abound across the world, and U.S. states and tribal nations are not exempt. Given the changing landscape, the Seminoles and the state are back at the table trying to hammer out details of a compact that could include not only sports wagering, but online gambling as well. The compact will be a priority ahead of legislative action, and while some sources say a new compact could be negotiated within the next month, the legislative session is only 60 days long and has an April 30 adjournment date.
The hard truth for lawmakers is this: Until there is a compact, it’s highly unlikely that sports betting will gain a foothold in the legislature. SB 392, introduced by Sen. Jeff Brandes in mid-February, has already been assigned to the Regulated Industries Committee, but using Arizona as an example, it’s clear that lawmakers of any party are loathe to move an issue forward without knowing what’s in a tribal-state compact. Yet at the same time, it’s tricky, but seemingly necessary to have legislation and compacting on parallel tracks.
The current compact, which was signed on April 7, 2010, allows the Seminoles to withhold payments if the compact is violated.
A $750 million price tag?
Before the Seminoles suspended payments in 2019, the tribe had reached a tentative agreement with Sen. Wilton Simpson that would have allowed sports betting at the Seminoles’ casino properties, as well as racetracks and jai alai frontons for an annual payment to the state of $700-$750 million. The deal ultimately collapsed. Then, last January, Rep. Scott Plakon, R-Longwood, filed HB 1195, a proposed compact that would have granted the Seminoles exclusivity for online sports betting. While that bill proposed a more than two-fold step-up in annual payments to $750 million, the legislation never made it out of committee.
Brandes, who filed a sports betting bill for the upcoming session, told Sports Handle Monday that if a new compact provides the Seminoles with exclusivity for online casino operations across the state, then the payments would be radically higher. At the moment, it is unclear if the Seminoles hope to secure exclusivity to the state’s online sports betting and iGaming markets through a new compact. If that is the case, the state could expect to reap $500-$750 million per year, or even higher.
“You’ve now basically said that everyone’s phone or laptop is a casino,” Brandes told Sports Handle.
And many use that hand-held casino to bet illegally online or in legal states. Though Florida’s border states — Georgia and Alabama — don’t have legal sports betting, lawmakers in both states are seriously considering it this session.
@JeffreyBrandes State Senator Brandes, is there a legitimate hope that sports betting will arrive in Florida by 2022 or is that just a pipedream? I cannot believe our state passes on the potential windfall from this venture. I, for one, go offshore. Many I know go to GA.#sosilly
— coachdrl (@coachdrl) February 9, 2021
Typically, when Florida’s legislature faces the daunting task of whether to approve a multi-year tribal compact, the decision is left until the end of the legislative session, say sources familiar with the process. But this time around, given budget concerns on both sides, the timeline will likely be compressed.
“This is going to happen earlier rather than later,” one source told Sports Handle. “This is a now issue.”
But even if the compact is settled early in the session, it’s likely that this year’s sports betting discussion will be academic. In states with or without tribes, it often takes multiple sessions to educate lawmakers on sports betting or iGaming before a bill can move. In Michigan, lawmakers not only needed multiple sessions, but suffered through a veto before finally getting sports wagering and iGaming legislation signed by a governor. In Florida, bills were filed in 2020, but there was little progress, meaning that education is still a work in progress.
Wagering at pro stadiums in latest bill
The latest trio of bills filed by Reps. Chip Lamarca and Anika Omphroy would allow for wagering at pro sports venues across Florida, including NFL stadiums (three), Major League Baseball parks (two), NHL arenas (two), NBA arenas (two), and Major League Soccer stadiums (four), sites that host PGA, LPGA, and PGA of America events, WNBA arenas, National Lacrosse League and Major League Lacrosse sites, and Indoor Football League venues. Besides that, sports betting would be available at tracks offering parimutuel betting (horse and dog), jai lai frontons, and tribal casinos.
Lamarca filed the key bill, HB 1317, last Friday, along with HB 1319, which sets the tax rate on gross revenue at 22.5%, and HB 1321, which sets the application fee at $7.5 million with an annual renewal cost of $1 million.
The legislation envisions in-person wagering at all mentioned sites as well as statewide mobile wagering, though HB 1317 doesn’t specify how many skins each physical location would be entitled to. That said, if only one skin were allowed, Florida would still have more than 20 skins available, and that’s just counting digital platforms tethered to the pro venues identified in the bill.
“As we grapple with a tough budget year and as many good programs are facing deep cuts, it’s time Florida gets innovative when it comes to keeping dollars in our state,” Lamarca told Florida Politics last week.
Neither Lamarca nor Brandes had contact with the Seminoles while crafting their bills. And the tribe is on record as having no comment about about the proposals.
Sharing the revenue pie equitably
Brandes’ bill, SB 392, allows individuals 21 years or older to wager money on sports events through the Department of the Lottery and approved licensees. The proposed legislation does not have a cap on the number of mobile sports betting licenses the department would award. Brandes, a Republican, does not oppose a crowded marketplace for legal sports betting in Florida as long as an operator can qualify for a license through the lottery.
Brandes also indicated that there is a model for both the tribes and national sportsbook operators to share the revenue from sports betting equitably. But, he added, the state needs to bring the “big names to Florida,” otherwise bettors will continue to wager illegally on mobile apps across the state. Brandes referenced major national brands such as DraftKings and FanDuel in his comments to Sports Handle.
Last November, Sports Handle broke an exclusive story on DraftKings’ decision to suspend a Florida bettor’s account after it determined the customer placed a $3 million parlay through a proxy in New Jersey. The Florida-based bettor placed the wagers on his DraftKings New Jersey mobile account through a proxy located in the Garden State, multiple sources confirmed.
The customer partook in an activity known as messenger betting, which runs afoul of numerous state and federal laws. The Florida bettor claims he received a verbal authorization from a DraftKings employee, an accusation that the company denies.
“I think there’s an opportunity for us to broadly open the market and allow innovation to occur,” Brandes told Sports Handle. “Whether that be online or in a physical space, there should be no restrictions set by the state on that.”
But without the Seminoles, it’s looking a lot like there will be no legal sports betting at all.
