Most of the sports betting world settled in to watch the Tampa Bay Buccaneers trounce the New York Giants in Florida on Monday Night Football this week.
Meanwhile, the District Court website for the District of Columbia was busy posting decisions
After more than a week’s delay from the original date for a decision of November 15, Judge Dabney Friedrich issued her much-anticipated ruling on the legality of the recently signed Compact between the Florida Governor Ron DeSantis and the Seminole Tribe of Florida.
Friedrich’s decision was not kind to Floridians hoping to bet regulated sportsbooks in the state, as the Judge vacated the Compact. The order to vacate the Compact effectively means that it does not exist, and FL sports betting returns to its pre-2021 compact status, unregulated.
The news for Floridians is even worse than some speculated it could be. Not only did the Judge put an end to legal online sports betting in Florida, but she vacated the Compact in its entirety. That means even in-person options are without a means forward at the moment.
West Flagler has standing in Florida sports betting
The first threshold question in the case was whether the plaintiffs had standing to pursue the claims against the Department of the Interior and the Secretary of the Interior. Standing doomed the plaintiffs’ efforts in the Northern District of Florida when they filed suit against the Governor.
Standing requires:
- injury in fact
- concrete and particularized injury, and
- actual or imminent, not conjectural or hypothetical injury
The D.C. Court relies on a 2002 case to note that “‘actual or imminent increase in competition’ establishes injury in fact.” The D.C. Circuit’s case law heavily supports a finding that increased competition is sufficient to establish Article III standing.
Backed by evidence?
To show that West Flagler’s injury was not speculative, Friedrich notes that the survey that West Flagler Associates conducted supports the plaintiffs’ claim that the plaintiffs will suffer some loss.
However, the fact that the D.C. Circuit allows for standing from any increase in competition means that even if the methodology of the survey is flawed, as the defendants allege, the barrier to show some loss is so minimal that Friedrich finds it satisfied in the case regardless of arguments about the validity of the survey.
Seminole Tribe not indispensible
The second matter addressed by Friedrich was whether the Seminole Tribe was an indispensable party to the litigation.
In weighing whether the case should be dismissed, the Court is tasked with evaluating whether “in equity and good conscience, the action … should be dismissed.”
Friedrich finds that the evaluative factors favor proceeding without the Tribe as a party to the litigation.
Meat and potatoes of Florida sports betting ruling
After addressing the threshold issues, Friedrich gets into the focus of the case, titling Section C “The Compact violates IGRA by authorizing gaming off Indian lands.”
Although the decision states that the Compact attempts to authorize Florida sports betting both on and off tribal lands, the Indian Gaming Regulatory Act (IGRA) only provides for gaming on Indian lands.
It is not where your servers are
Despite the popularity of designating a bet to take place in the location of where the servers are located, Friedrich calls this a “fiction” that the Court cannot accept.
Friedrich stated:
When a federal statute authorizes an activity only at specific locations, parties may not evade that limitation by “deeming” their activity to occur where it, as a factual matter, does not.
Federal superiority
Friedrich takes aim at the letter from the Department of the Interior criticizing the reasoning that because some states have designated a bet to occur where servers are located, that this renders the bet legal under federal law.
Friedrich states that “changes in state law do not affect the federal-law issues in this case.”
Amendment 3
The judge highlighted a final problem with the Secretary of the Interior’s argument, Article X Section 30 of the Florida Constitution, or what was the 2018 ballot initiative known as Amendment 3.
Friedrich stated:
… the State may expand sports betting only through a citizen’s initiative or an IGRA gaming compact. And because no citizens’ initiative has approved online sports betting, such betting can be lawful in Florida only if it is authorized by a gaming compact (internal citations omitted).
However, the Judge does walk her Amendment 3 discussion back by noting that she is not issuing a final decision on Florida constitutional questions.
Where this stands
Friedrich’s decision to vacate the Compact sets back in place the 2010 Compact, which, if time were to stop, would remain in place until 2030.
Friedrich notes that “continuing to offer online sports betting would violate federal law.”
What is next in Florida sports betting?
As was foretold long before this decision, a forthcoming appeal will be a certainty.
The Department of the Interior will likely seek to have the District Court’s ruling stayed while the appeal plays out. Unfortunately, the appeals process is unlikely to move as quickly as the District Court litigation. Therefore if a stay is not granted, it could be a while before Florida sports betting returns in the Sunshine State.
Immediately, we should expect a motion to stay the judgment pending appeal. Typically, a party must file a motion first in District Court to stay the judgment pending an appeal. However, if this fails, they can make a motion appealing the decision not to stay the judgment at the Court of Appeals.
Alternatively, an expeditious route might be to seek some help from the Sunshine State’s federal lawmakers and revive the Anthony Brindisi legislation that would allow for online sports betting under IGRA.
While this might be a setback for Florida sports betting, it is only the first chapter in a yet-to-be-finished story.
