Florida Sports Betting Case Gets New Argument From Federal Government

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Florida sports betting case update

New arguments are in from the federal government in the ongoing court case involving the legality of the compact between the state of Florida and the Seminole Tribe, which has legalized sports betting in the state.

After being criticized by Judge Dabney Friedrich last week for not being prepared to argue the merits of the plaintiffs’ arguments, the federal government filed its supplemental brief last night, per the Judge’s order.

We have been told that there will be a decision in the case on or before Nov. 15. But, before that date comes, the federal defendants have filed a doozy of a supplemental brief.

A little clarification

The supplemental brief leads off by noting the circumstances that led to this additional filing. But, the federal defendants also clarify that the plaintiffs’ challenge is limited to the online sports betting provisions of the recently enacted compact.

This leaves open the possibility that should the court find those provisions offensive to the Indian Gaming Regulatory Act (“IGRA”), the Unlawful Internet Gambling Enforcement Act (“UIGEA”), the Wire Act, or any other federal law, the offending provision could be excised allowing, the yet to be launched, in-person wagering provisions to stand. That means retail sportsbooks would be ok, but not online sportsbook apps, like the Hard Rock Sportsbook app that recently launched.

Federal defendants agree with what now?

The brief moves on to state that:

Federal Defendants agree that under federal law, the location of the bettor determines where the bet is placed, and thus federal law as to the location of the better [sic] cannot be changed or altered through a tribal-state compact (citing Michigan v. Bay Mills Indian Cmty., 572 U.S. 782, 792-93 (2014)).

The government continues:

Accordingly, if a bet is placed within Florida, but outside the confines of the Tribe’s Indian lands, the bet occurs outside of Indian lands and must be authorized by state law,
rather than IGRA. (citing See, e.g., State of Cal. v Iipay Nation of Santa Ysabel, 898 F.3d 960, 968-69 (9th Cir. 2018)).

While conceding these points, the government then argues that it believes that the compact does not violate IGRA despite these facts.

All a big misunderstanding?

The federal defendants argue that the plaintiffs claim that the compact’s position of wagering occurring on “Indian Lands” under the language contained in the compact is something of a “legal fiction” is a misunderstanding of not only how this compact works, but of the compacting process generally.

The federal defendants state:

The State and Tribe are free to denominate where the gaming occurs for state or tribal law purposes, and moreover, IGRA permits the Tribe and the State to allocate jurisdiction and regulatory authority over the gaming activity addressed in the Compact consistent with federal law, including IGRA.

This is indeed the view of several prominent experts. But, the government is effectively arguing that what the Compact does is authorize activities to occur off tribal land under state law.

The federal defendants argue that the Compact is only authorizing activity that occurs on tribal lands. Thus, according to the defendants, the question of whether a sports bet could be placed by someone not physically located on Tribal lands was not for the Secretary to decide. The compact had already done it.

State law authorized this, not the Department of the Interior

The federal defendants argue that it is state law that authorizes the off tribal premises wagering provisions of the compact, not the Secretary or Department of the Interior.

The Department of the Interior’s brief then effectively doubles down by concluding that not only does the compact not violate any federal law, “it does not violate state law or any
state-law specific mandates that limit the authority of the State to have entered into and ratified the Compact.”

This is a pretty extraordinary piece of commentary and appears to take direct aim at Judge Friedrich’s comments in Friday’s hearing about whether there were state constitutional law questions floating about. Indeed, there have at least been rumblings about whether the compact complies with Florida’s 2018 Amendment 3. This brief will likely amplify those rumblings.

Not an authorization

In their substantive arguments, the federal defendants suggest that the plaintiffs have misconstrued the deemed location of a bet as authorization via the compact. Instead, the government argues that:

The Compact provisions deeming the placement of the bet as occurring on Indian lands instead reflect the State’s agreement in the Compact that the Tribe regulates all sports betting activity—the placement of the wager, as well as its receipt—even if such wager is placed by a person physically located off of the Tribe’s Indian lands.

The government’s view is that the parties are free to agree on each entity’s civil laws and jurisdiction over gaming. The brief argues that the negotiation of where a bet is deemed to occur is permissible under IGRA by virtue of the seven categories subject to agreement between a state and tribes.

What to watch in the Florida sports betting case?

This is undoubtedly an interesting brief. On a surface level, the brief is a departure from much of what has been the subject of ongoing debate and effectively points the government’s argument in a new direction.

From an analysis perspective, portions of this brief appear inconsistent with what has been said by the state and the tribe. While we expect a decision on (or before) Nov. 15, this brief is of such a nature that Judge Friedrich may indeed grant the plaintiffs the opportunity to respond.