Future Of Tribal Gaming At Stake In Florida Compact Court Hearing

November 5, 2021
Two lawsuits by Florida groups challenging the historic gambling compact negotiated by the Seminole Tribe with Republican Governor Ron DeSantis will be discussed this morning in a teleconference with U.S. District Judge Dabney Friedrich of Washington, D.C.


Two lawsuits by Florida groups challenging the historic gambling compact negotiated by the Seminole Tribe with Republican Governor Ron DeSantis will be discussed this morning in a teleconference with U.S. District Judge Dabney Friedrich of Washington, D.C.

Among the issues expected to come up in the key hearing is whether the two lawsuits should be dismissed or transferred to Florida as requested by the U.S. Department of the Interior.

Friedrich, who was born in Pensacola, Florida, became a federal judge after being nominated by President Donald Trump on June 7, 2017, and confirmed by the U.S. Senate in a 97-3 vote on November 27, 2017.

She is the second federal judge who will rule on the Seminole compact, which was approved by the Florida legislature on May 19 and signed into law by DeSantis on May 25.

Another Trump-nominated judge, Allen Winsor of the U.S. District Court for the Northern District of Florida, upheld the legitimacy of the Seminole compact in a ruling on October 18.

Winsor, who was born in Orlando, Florida, dismissed a lawsuit by two pari-mutuel companies in Miami — West Flagler Associates Ltd., and Magic City Casino — after concluding neither had legal standing to challenge the compact.

Both companies are pursuing virtually the same lawsuit in Washington, D.C.

“The issue of standing — not the merits of the allegations under the Indian Gaming Regulatory Act — will predominate at the upcoming hearing in D.C.,” predicted Ryan Rodenberg, a professor at Florida State University who writes about sports betting.

“For precedent, the judge may look to the erroneous standing-related ruling at the early stages of the New Jersey sports-betting case where a group of sports league plaintiffs claimed to be injured and irreparably harmed by sports wagering in seeking an injunction,” Rodenberg said.

Rodenberg was referring to a ruling by U.S. District Judge Michael Shipp in 2013 which empowered the leagues to block a New Jersey law to legalize sports betting.

Shipp’s decision was overturned by the U.S. Supreme Court in its landmark ruling on May 14, 2018, which allowed New Jersey, Florida and all U.S. states to legalize wagers on sporting events.

The other lawsuit which will be discussed in Friday’s hearing involves a claim by an anti-gambling coalition in Florida that the Interior Department violated three federal laws including the Indian Gaming Regulatory Act (IGRA) and the 1961 Wire Act by deeming the compact approved on August 6.

The coalition includes the anti-gambling group No Casinos, former Philadelphia Eagles owner Norman Braman and South Florida real estate investor Armando Codina.

Among numerous other provisions, the Seminole compact establishes an entirely new model for the operation of online sports betting by enabling the tribe to offer bets throughout Florida as a form of Indian gaming subject to IGRA.

Arizona, Connecticut and Michigan also allow tribes to participate in online sports betting, but require them to submit to state licensing and taxation in order to do so.

Under the compact, the Seminole Tribe has exclusive rights over sports betting in Florida and it would not have to pay any revenue-share to the state if commercial operators are permitted in the market in future.

“What is at stake in this litigation is the Indian tribes' ability to compete in the gaming market,” said Stephen Hart, a tribal gaming attorney and a partner in the Lewis Roca firm in Phoenix Arizona.

“As the gaming industry moves inevitably toward online gaming, the tribes' access to the online market will be crucial. Some tribes will choose to operate under state law, but many tribes would prefer to remain under the federal Indian Gaming Regulatory Act,” Hart said.

The compact permits the Seminoles to use computer servers on their lands to process sports wagers from all over the state of Florida, deeming the wagers to legally occur at the site of the server and therefore take place on Indian lands in accordance with IGRA.

Just days before Friday's court hearing, the Seminoles launched the Hard Rock Sportsbook and began taking online bets from Floridians on November 1.

Should federal courts uphold the Seminole model, it seems that tribes in other states will quickly seek to use a similar framework to participate in mobile sports betting and potentially other forms of online gambling via servers on their lands.

Late last week, a coalition of three California Indian tribes including the Rincon Band of Luiseno Indians circulated a proposed ballot initiative to enable tribes to conduct online betting beyond reservation lands under a compact, in stark contrast to a separate ballot measure being proposed by FanDuel, DraftKings and BetMGM that would require tribes to obtain state licenses and potentially designate commercial entities to operate online betting on their behalf.

“This is a unique case because the Seminole Tribe has unusual allies — the state of Florida and the federal government,” said Joe Valandra, a tribal gaming lobbyist and former chief of staff of the National Indian Gaming Commission.

“This is significant because all three parties to the compact agree and are arguing the same basic position. This will be the key feature of the hearing, from my point of view,” Valandra said.

Opposition to the compact, Valandra said, “is fueled largely by gaming interests outside of Florida that are fundamentally anti-tribal gaming.”

Additional reporting by James Kilsby.

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