Multi-Billion Dollar Sports

Betting Deal Faces New Challenge

 in Washington, DC

By Dara Kam, News Service Florida

September 28, 2021

Gov. Ron DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola Jr. signed a gambling deal in April.

File photo

TALLAHASSEE --- Two prominent South Florida businessmen and the group No Casinos have filed a lawsuit seeking to block a deal that allows sports betting in Florida, arguing the agreement signed by Gov. Ron DeSantis and approved by the Legislature violates the state Constitution and federal laws.

The legal challenge, filed Monday in Washington, D.C., is the third federal lawsuit challenging the sweeping deal, known as a compact, giving the Seminole Tribe of Florida control of sports betting throughout the state.

Plaintiffs in the new lawsuit include South Florida developer Armando Codina and Miami car dealer Norman Braman, who have been longtime opponents of expanded gambling.

The challenge accuses President Joe Biden’s administration of violating federal law by allowing the compact to go into effect and failing to consider a 2018 Florida constitutional amendment that requires statewide voter approval of gambling expansions.

The compact, signed by DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola Jr. in April and later approved by the Legislature, opens the door for the first time to sports betting in Florida. Under the agreement, the Seminoles will serve as the host for sports betting and contract with pari-mutuels that would get a cut of online bets placed using the pari-mutuels’ mobile apps.

The “hub-and-spoke” sports-betting plan would allow gamblers throughout the state to place bets online, with the bets run through computer servers on tribal property. The compact says bets made anywhere in Florida “using a mobile app or other electronic device, shall be deemed to be exclusively conducted by the tribe.”

The U.S. Department of the Interior in August allowed the compact to go into effect, drawing a legal challenge in Washington from the owners of Magic City Casino in Miami-Dade County and Bonita Springs Poker Room in Southwest Florida. The owners of those pari-mutuels also filed a lawsuit in July in federal court in Tallahassee challenging the deal. Both of those lawsuits remain pending.

The new lawsuit filed by Codina, Braman and No Casinos contends that, by allowing sports betting to take place off of tribal lands, the federal agency’s approval of the deal “adversely impacts plaintiffs’ properties and neighborhoods by, among other things, increasing neighborhood traffic, increasing neighborhood congestion, increasing criminal activity, reducing open spaces and reducing their property values.”

Codina and partner Jim Carr developed a 600-acre senior living community about 2.5 miles from the Seminoles’ Hard Rock casino operations in Broward County. Monterra MF, LLC, which is an owner of the Cooper City development known as The Residences at Monterra Commons, is a plaintiff in the lawsuit.

Florida has “a long history of opposition to the expansion of gambling,” the lawsuit said, noting that voters have repeatedly rejected attempts to authorize non-tribal casino gambling in the state.

“Now facing public accountability and voter resistance to efforts to expanded gambling, the state of Florida attempted to shield sweeping gambling expansion from public review by burying it in a new compact with the Seminole Tribe,” the 40-page lawsuit said. “In short, the 2021 compact converts every smartphone, tablet, laptop or desktop in Florida into a remote gambling device.”

In the two other lawsuits, Magic City Casino and Bonita Springs Poker Room contend that the sports-betting plan violates federal laws and will cause a “significant and potentially devastating” impact on their businesses.

Under the compact, the Seminoles agreed to pay at least $2.5 billion over five years to the state in exchange for the rights to control sports betting. The deal also allows the tribe to add craps and roulette to its casino operations.

Sports betting would be restricted within Florida through the use of “geo-fencing.” But the lawsuit filed Monday contends that the restriction isn’t guaranteed.

“Readily-downloadable software and apps enable computer and mobile device users to run virtual private networks (VPNs) to bypass geo-restricted sites by faking a specific geographic location. And individuals who live close to the Florida border, in Georgia and Alabama where sports betting is illegal, may have IP addresses listed in Florida,” the lawsuit said.

The Seminoles, however, brushed off the latest challenge, saying in a prepared statement that the “gaming compact is now in effect.”

“It has been agreed to by the governor and the Seminole Tribe, approved overwhelmingly by the Florida Legislature and deemed approved by the Department of the Interior. It has the support of two-thirds of Floridians. The state, the tribe and Seminole Gaming are moving forward,” the tribe said.

Mirroring arguments in the other legal challenges, the new lawsuit maintains that the federal Indian Gaming Regulatory Act, or IGRA, does not authorize gambling that takes place off tribal lands. The lawsuits also allege that the sports-betting provision in the compact violates other federal laws, including the Wire Act.

It noted that the Department of Interior “expressed concern” over part of the compact requiring the Seminoles to enter into marketing agreements with non-tribal interests for sports betting but “refused to disapprove this provision, despite noting several questions about its legality, and that ‘DOI does not endorse the marketing agreement arrangement provided in the compact.’”

The lawsuit also argued that the federal agency erroneously asserted that it did not have authorization to consider the 2018 constitutional amendment, known as Amendment 3, in its review of the compact. The group No Casinos spearheaded the effort to pass the constitutional amendment.

“The state laws are critical to any analysis of a compact’s validity under IGRA,” Monday’s lawsuit said.

Meanwhile, lawyers for Magic City Casino and Bonita Springs Poker Room last week filed motions asking federal judges in Washington and Tallahassee to block the compact.

The pari-mutuels accused DeSantis of acting beyond his authority by entering into the agreement authorizing sports betting off of tribal lands.

“The only ways to obtain the right to offer sports betting in Florida are through (1) an IGRA compact for gaming on tribal reservations or (2) a referendum for gaming not on tribal reservations,” one of the motions said.

©2021 The News Service of Florida. All rights reserved; see terms.