A federal judge in the U.S. District Court for the District of Columbia ruled in favor of two parimutuels late Monday, shutting down legal sports betting in Florida. The decision is a major blow to the Seminole Tribe, which earlier this year agreed to a controversial compact with the state for a monopoly on sports betting. The tribe went live with digital wagering via its Hard Rock platform on Nov. 1, but had not yet launched in-person betting.
The decision means that sports betting authorized by the new Seminoles’ compact is no longer permissible in Florida, though it’s likely that the Seminoles will immediately appeal and ask for a stay on the decision. An appeal would send the case to a federal appeals court. At that level, a three-judge panel will hear arguments, but experts say that process often takes six months or more.
“On the merits, it is well-settled that IGRA authorizes sports betting only on Indian lands,” Judge Dabney Friedrich wrote. “This requirement stems from IGRA § 2710(d)(8)(A), which authorizes the Secretary to approve compacts ‘governing gaming on Indian lands.’ 25 U.S.C. § 2710(d)(8)(A). It is repeated in IGRA § 2710(d)(1), which lists the conditions under which ‘[c]lass III gaming activities shall be lawful on Indian lands.’ Id. § 2710(d)(1). Altogether, over a dozen provisions in IGRA regulate gaming on ‘Indian lands,’ and none regulate gaming in another location. Indeed, if there were any doubt on the issue, the Supreme Court has emphasized that ‘[e]verything—literally everything—in IGRA affords tools … to regulate gaming on Indian lands, and nowhere else.’ Bay Mills, 572 U.S. at 795.”
Because the judge vacated the entire compact, the Seminoles also will not be able to move forward with an expansion of retail gaming that was set to add craps and roulette to the tribe’s retail offerings. Under the new compact, the tribe was set to pay the state $2.5 billion over five years, but that money may be lost — at least for now — as the judge ordered the state and tribe to revert to the 2010 compact.
Seminoles’ motion to intervene denied
In finding for the plaintiffs, Friedrich granted their request for summary judgment and denied the Seminole Tribe’s motion to intervene in the case. And contrary to a finding by a federal judge in the North Florida District who dismissed a similar case saying the same plaintiffs did not have standing, Friedrich found that the plaintiffs did prove they had “standing” in the case and would be “injured” by the state’s decision to allow digital wagering by the Seminoles only.
Welp so much for sports betting in Florida. Hope everyone cashed out. https://t.co/CdUMVoLOew
— Allan Bell (@AllanBell247) November 23, 2021
The compact has been the subject of discussion across the country since the tribe and Florida Gov. Ron DeSantis agreed that if digital wagers flowed through a server on tribal lands, the bets would be deemed to be placed on those lands. That language appeared all along to be a potential violation of the Indian Gaming Regulatory Act, which outlines what wagering on Indian lands can look like but does not offer any guidance off of reservations. At the time the compact was approved by the state legislature in May, lawmakers believed lawsuits were coming.
“It doesn’t take a master’s degree to know that there will be litigation,” said Rep. Sam Garrison when lawmakers approved the compact, which was then sent to the U.S. Department of the Interior for approval. Secretary Deb Haaland allowed the compact to become “deemed approved,” meaning she did approve it, but took no action during a 45-day review window.
‘Court cannot accept that fiction’
On Nov. 5, Friedrich heard arguments from West Flagler Associations and the Bonita-Fort Meyers Association, as well as the Department of Justice on behalf of Haaland. At that time, the DOJ was unprepared to argue the case, and Friedrich chastised lawyers but gave them four more days to file a written argument, the merits of which she clearly did not accept.
midnight snack, East Coast time – have my analysis on the federal judge nuking FLA sports betting tonight: https://t.co/jfyygnZieL then you can go right to sleep #SportsBiz
— John Brennan (@BergenBrennan) November 23, 2021
“The instant Compact attempts to authorize sports betting both on and off Indian lands. In its own words, the Compact authorizes such betting by patrons who are ‘physically located in the State [of Florida] but not on [the Tribe’s] Indian Lands.’ Compact § III(CC)(2) (emphasis added). That italicized phrase is no slip of the tongue, but instead describes the basic consequence of authorizing online betting throughout the State,” Friedrich wrote. “And although the Compact ‘deem[s]’ all sports betting to occur at the location of the Tribe’s ‘sports book(s)’ and supporting servers, see Compact § III(CC)(2), this Court cannot accept that fiction. When a federal statute authorizes an activity only at specific locations, parties may not evade that limitation by ‘deeming’ their activity to occur where it, as a factual matter, does not.”
Friedrich essentially said Haaland never should have allowed the compact because it clearly violates the IGRA.
Surprising result?
Many in the legal community believed Friedrich would follow her North Florida District counterpart and dismiss the case based on standing. In fact, two law professors told Sports Handle earlier this month that the case had little chance of success, with one calling it “dead on arrival.”
The decision is a blockbuster, but it’s not the end of the line for the Seminoles or for legal wagering in Florida, where any expansion of gaming is legally supposed to go to the voters since Amendment 3 was passed in 2018. Friedrich noted that sports betting could be legalized in the state either through a new compact or via a “citizens’ initiative.”
A political committee funded by DraftKings and FanDuel is currently gathering signatures for just such an initiative, which would allow for statewide digital wagering both on and off Indian lands. The committee has until early next year to collect the 891,589 signatures needed to get on the ballot. As of Monday night, 116,123 signatures had been verified, and according to the committee, it had collected more than 500,000 signatures and is “confident” will be able to collect the total needed by Feb. 1, 2022.
