As New Jersey continues to rake in more than $2bn annually from internet gaming and online sports betting, the question arises why Florida is not being allowed to do the same thing — so far.
Before he found religion and embraced online gambling by signing landmark legislation in 2013, Governor Chris Christie of New Jersey vetoed an earlier internet gaming bill in March 2011.
Christie said it was “a legal fiction” to argue online poker and other internet games actually occur in Atlantic City where computer servers process the activity and the only place in New Jersey where the state constitution permits casino gaming to be conducted.
New Jersey’s internet gaming model has come to be known as the “hub and spoke” model, with Atlantic City being the hub accepting bets via spokes reaching the rest of the state.
The Seminole Tribe of Florida also used a hub and spoke model to accept sport bets online from November 1 through December 4 last year in accordance with a new tribal-state compact approved by state, federal and tribal governments.
The Seminoles were forced to stop accepting online bets after a November 22, 2021 ruling by U.S. District Judge Dabney Friedrich of Washington, D.C. who declared the wagers and the new compact violated the Indian Gaming Regulatory Act (IGRA) of 1988.
Friedrich echoed Christie in dismissing the notion that the hub and spoke model for internet gambling is legal on grounds that the gambling activity would occur at the site of the server on tribal lands, rather than the location of the bettor elsewhere in Florida.
“[T]his court cannot accept that fiction,” Friedrich wrote on page 19 of her 25-page opinion.
It is fair to say internet gambling and online sports betting are no longer a fiction in New Jersey, which is receiving almost $200m in revenue per month from these two verticals.
In 2013, Christie signed an amended version of the New Jersey internet gambling law which allayed some of his concerns.
“But the legal fiction part of [Christie’s] argument — it wasn’t really addressed, and that still remains the law today …and is the basis of how internet gaming works [in New Jersey],” said Harry Jackson, an attorney with the Fox Rothschild law firm in Atlantic City.
Jackson delivered his remarks last month during the Seton Hall Law School's Gaming Law, Compliance and Integrity Boot Camp in Newark, New Jersey.
Noting his association with Fox Rothschild, which represents the Seminoles via Hard Rock International, Jackson declined to elaborate on his comments when contacted this week.
Nevertheless, the argument that Florida’s internet sports-betting operations were basically the same as New Jersey’s may come up in the appeal of Friedrich’s decision.
The appeal is expected to be heard later this year by the U.S. Court of Appeals for the D.C. Circuit.
“I think conceptually the Seminoles’ model is similar to New Jersey’s system, but don’t think the comparison does much for the Seminoles,” said Bob Jarvis, a gaming law professor at the Shepard Broad College of Law in Davie, Florida.
“A state can pretty much do whatever it wants inside its borders while a tribe has to comply with IGRA. Thus, I suspect the D.C. Circuit is going to give this argument very short shrift.”
The test for the Seminoles in their appeal is proving their internet gambling operations “are legal under IGRA, or at least not illegal,” according to Jarvis.
“Of course, they are helped in making this showing by the fact that the [U.S.] Department of the Interior let the compact [with Florida] go through, meaning it thought the Seminoles’ plan was legal,” Jarvis said.
No matter how the appeal is decided, Jarvis described the chances for the Seminole case to reach the U.S. Supreme Court as “excellent.”
“The one fly in the ointment is that the Seminoles would be [appealing] an issue that two circuit courts have ruled on in the same way,” Jarvis said.
Jarvis was referring to Friedrich’s decision and the Desert Rose ruling in 2018 by the Ninth U.S. Circuit Court of Appeals in California rejecting tribal online bingo.
“But I think the justices will overlook the lack of a conflict,” he said.
“Indeed, the [Supreme Court] may even feel it has to step in to provide guidance before more circuit courts take up the issue.”