Florida sports betting might need to work out some kinks before reaching the market.
A landmark deal reached between Florida Gov. Ron DeSantis and the Seminole Tribe of Florida sees the Sunshine State extend the Tribe’s gaming exclusivity deal in exchange for a 30-year agreement to make payments of at least $500 million annually to the state.
The deal is reported to be worth $2.5 billion to the state in its first five years alone. In exchange for those payments, the Seminole Tribe is able to extend their gaming offerings to include craps, roulette, and of course sports betting in Florida. The Tribe also is able to expand their gaming facilities at their Hollywood facility.
Years in the making for Florida sports betting
The deal was concluded this month and will be finalized with the legislature in Special Session the week of May 17. Approval from the federal Secretary of the Interior represents the end of several years of various efforts to bring sports betting to Florida.
While a number of bills that would have allowed FL sports betting predictably failed, the deal between one of the most important gaming entities in the country and the state of Florida is potentially big win for sports betting enthusiasts.
What the compact says
The compact defines sports wagering to mean:
any past or future professional sport or athletic event, competition, or contest, any Olympic or international sports competition event, any collegiate sport or athletic event (but not including proposition bets on such collegiate sport or event), or any motor vehicle race, or any portion of any of the foregoing, including but not limited to the individual performance statistic of an athlete or other individual participant in any event or combination of events, or any other “in-play” wagering with respect to any such sporting event, competition or contest, except “Sports Betting” does not include Fantasy Sports Contests, pari-mutuel wagering, or betting on any form of poker or other card game.
Exclusivity for the tribe
The agreement says that all sports wagering is done exclusively through sportsbooks operated by the Seminole Tribe or by its “approved management contractor[s].”
The deal also allows the Tribe to work with pari-mutuel providers to offer FL sports betting at their facilities.
People are where?
The deal, which restricts betting to those over the age of 21, deems that mobile wagers placed by a patron within the state will be deemed to occur where the servers are located:
including any such wagering undertaken by a Patron physically located in the State but not on Indian Lands using an electronic device connected via the internet, web application or otherwise …
A conflict of the highest order?
The clever language trying to designate where a bet takes place is a tactic that has been used in New York, most recently, but many other jurisdictions have done some variation of this as well.
The issue in Florida is perhaps more problematic. While states are generally free to define legislative terms as they please subject to their own rules, the federal government and a federal circuit court have already opined on the location of where a bet takes place with respect to the Indian Gaming Regulatory Act (IGRA), the statute that governs the compacting process between federally recognized tribes and states.
Indeed, IGRA requires all wagering to take place on Tribal land, and by virtue of federal guidance and a Ninth Circuit Court of Appeals decision, bets were interpreted to take place where a bettor was and not where servers were located.
This was of such concern that Representative Anthony Brindisi of New York introduced a bill to allow for Tribal operators to accept sports wagers under IGRA. But,Brindisi’s sensible modernization bill went nowhere in 2019. Therefore, the Ninth Circuit case of California v. Iipay Nation of Santa Ysabel still looms very large over this issue.
The caption hides the ball
While the caption of the case lists the state of California, the Federal government joined the state in suing the Iipay Nation over online bingo games where the Tribe argued that the placement of servers on tribal lands was sufficient to classify as a lawful activity.
The acknowledgment that the location of servers is not the location of wager for the purposes of IGRA is perhaps lent support from the fact that many Tribes offering mobile wagering in other states are doing so under commercial agreements with the states as opposed to via amended compacts.
A second question for the brand new compact has also arisen from the group No Casinos, who according to Florida Politics has vowed to file suit alleging a breach of the Constitutional Amendment passed in 2018.
So what does this mean for Florida sports betting?
At the moment, there is a lot to be determined with the new compact. The compact will go up to Washington DC for review by the Office of Indian Gaming.
The office will review the compact for compliance with IGRA, and federal law more broadly, before advising to the Secretary and Assistant Secretary of the Interior on whether the compacts are compliant and should therefore be approved.
If everything is in order, the Secretary will then have to sign off and the compact will become effective when it is printed in the Federal Register. If the compact is rejected, the Seminole Tribe and the state may need to return to the negotiating table.
The compact does contain a clause that allows for provisions that are deemed invalid by a federal court to be severed from the agreement. The deal could continue on as though the infringing provision never existed. This provision, however, appears specific to a challenge in federal court.
