The Florida special legislative session kicks off today, as lawmakers meet to discuss the state’s gambling compact with the Seminole Tribe that includes sports betting.
The session runs through Wednesday and there is a lot to be discussed.
Lawmakers will be voting whether to adopt the compact agreed to last month by the Seminole and Gov. Ron DeSantis. But they will also be drafting support bills to flesh out regulations and exactly how Florida sports betting will work.
One bill, Senate Bill 2-A, was introduced Friday by Sen. Travis Hutson.
How will FL sports betting work?
The Seminole Tribe will control sports betting in Florida, via its Hard Rock Gaming brand. Other brands could potentially enter Florida by partnering with the state’s pari-mutuel horse racing operators or the tribe.
Per the compact, the tribe must sign sub-licensing contracts with at least three pari-mutuels.
But those contracts are only marketing deals, per se.
What is a marketing deal?
A Seminole spokesperson confirmed that pari-mutuel betting skins “would be operated by Seminole Gaming.”
Revenue from those skins would also be split 60/40 between the pari-mutuel (and partner,) and the tribe.
A tough sell?
Would US sportsbook operators actually agree to those terms?
Is FanDuel going to activate its DFS database in Florida, then hand all those customer details over to Hard Rock? Is DraftKings going to risk putting its name on third-party technology it does not control?
“It may not be overly appealing but can you afford to miss out on a $3 billion market opportunity?” said industry consultant and former Hard Rock Gaming SVP Kresimir Spajic. “If DK and FD won’t do it, Kindred, Tipico, Betway, Wynn and others may.”
Devil in the detail of FL sports betting
Barbara DeMarco, a lobbyist at Porzio Governmental Affairs, said the forthcoming regulations would determine whether it makes commercial and operational sense to do those deals.
“Operators will be watching the secondary bills closely,” she said.
Hard Rock International chairman Jim Allen has said publicly he wants to work with the big sportsbook operators. So perhaps the two sides can find terms that work for everyone.
FanDuel, DraftKings and BetMGM declined to comment.
Long way to go until compact is law
The compact must also go up to Washington DC for review by the Bureau of Indian Affairs. The office will review the compact for compliance with the Indian Gaming Regulatory Act (IGRA) and federal law more broadly.
Bye bye mobile betting?
The easiest solution to that problem is to strip mobile FL sports betting out of the compact completely.
The state still gets its revenue-share payments from other forms of gambling and the tribe gets exclusivity on retail wagering in partnership with the pari-mutuels.
“I could see this compact being done without online sports betting if necessary,” Spajic said. “That would still be valuable for all stakeholders except mobile operators.”
So far, it would be not good for operators then. But what happens in Florida next week could also have far-reaching consequences on US sports betting.
States like California have an equally strong tribal presence, and will be watching the special session closely.
“If this compact passes and it is approved by the Bureau of Indian Affairs, it will set a huge precedent for all tribal states,” Spajic added. “The consequences of that will be federal not local.”
Needless to say, it would not be good for the sports betting industry if it were locked out of two of the largest markets in the US.