Seminole Gambling Deal Gets Big Win

• By Dara Kam, News Service Florida
• June 30, 2023

TALLAHASSEE — In a move that could remake Florida’s gambling landscape, a federal appeals court on Friday overturned a ruling that blocked a deal giving the Seminole Tribe control over sports betting throughout the state.

The unanimous ruling by a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia reversed a November 2021 decision by a federal judge who halted the agreement. Gov. Ron DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola Jr. in 2021 signed the 30-year deal, which the Legislature ratified.

Owners of Magic City Casino in Miami-Dade County and Bonita Springs Poker Room in Southwest Florida filed a lawsuit alleging the sports-betting plan violated federal laws and would cause a “significant and potentially devastating” impact on the pari-mutuels’ businesses.

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

U.S. District Judge Dabney Friedrich ruled that the plan ran afoul of the federal Indian Gaming Regulatory Act which regulates gambling on tribal lands, because it would allow gambling off property owned by the Seminoles.

Friedrich, calling the setup a “fiction,” also invalidated other parts of the compact, finding that U.S. Interior Secretary Deb Haaland was wrong when she allowed the deal to go into effect in summer 2021. The Department of the Interior oversees tribal gambling.

But siding with the department, Friday’s ruling said the Washington, D.C.-based judge erred when she found that the compact violated the federal law, known as IGRA, because it authorized gambling “both on and off” Indian lands.

“We see the case differently,” Judge Robert Wilkins wrote in a 24-page opinion joined by Judges Karen Henderson and J. Michelle Childs.

A gambling compact “can legally authorize a tribe to conduct gaming only on its own lands,” Wilkins wrote. “But at the same time, IGRA does not prohibit a gaming compact — which is, at bottom, an agreement between a tribe and a state — from discussing other topics, including those governing activities ‘outside Indian lands.’”

While Friday’s ruling was a major victory for the Seminoles and the state, the appellate panel also emphasized that questions about whether the compact violates a Florida constitutional amendment remain a matter for state courts to consider.

“Whether it is otherwise lawful for a patron to place bets from non-tribal land within Florida may be a question for that state’s courts, but it is not the subject of this litigation and not for us to decide,” Wilkins wrote.

A DeSantis spokesman called the decision “great news” for the state.

“While we are not surprised the lower court’s perplexing ruling was unanimously overturned, this is great news for Florida. We will continue working with the Seminole Tribe of Florida to ensure the success of this historic compact -– the largest gaming compact in U.S. history -– which will lead to over $20 billion in revenues for the people of Florida,” Jason Mahon, a spokesman for the governor, said in an email.

Critics of the compact have argued that the sports-betting arrangement would not comply with a 2018 constitutional amendment that requires statewide voter approval of gambling expansions in Florida. Under what is known as Amendment 3, expansions of gambling must be placed on the statewide ballot through the citizens’ initiative process.

The appeals-court panel noted that its ruling “only” verified that Haaland’s decision to allow the compact to go into effect “was consistent” with federal law.

“In reaching this narrow conclusion, we do not give our imprimatur to all of the activity discussed in the compact. And particularly, for avoidance of doubt, we express no opinion as to whether the Florida statute ratifying the compact is constitutional under” the 2018 amendment, the ruling said.

Hamish Hume, an attorney who represents the pari-mutuels, criticized the panel’s ruling.

“The court correctly recognized that IGRA does not and cannot authorize gambling off of Indian lands, but then upheld a compact that purports on its face to do exactly that. We respectfully disagree with that decision, and are evaluating our possible next steps,” Hume said in an email.

Along with giving the Seminoles control over online sports betting, the compact allowed the tribe to offer craps and roulette at its casinos. Also, the deal would allow the Seminoles to add three casinos on tribal property in Broward County.

In exchange, the tribe pledged to pay the state a minimum of $2.5 billion over the first five years and possibly billions of dollars more throughout the three-decade pact. The deal also added Florida to numerous states that jumped into sports betting after a 2018 U.S. Supreme Court ruling that cleared the way for such wagering in New Jersey.

The Seminoles issued a statement saying the tribe was pleased with Friday’s unanimous decision.

“It is a positive outcome for the Seminole Tribe and the people of Florida, and for all of Indian Country. The tribe is fully reviewing the decision to determine its next steps,” spokesman Gary Bitner said in an email.

The Seminoles briefly rolled out the Hard Rock SportsBook mobile app amid the legal wrangling but stopped accepting wagers and deposits on the app in December 2021 after the three-judge panel refused the tribe’s request to put Friedrich’s ruling on hold.

It was not immediately clear Friday whether the tribe would quickly relaunch the app. Also, it was not clear if the pari-mutuels would ask the full appellate court or the U.S. Supreme Court to take up the issue.

Daniel Wallach, an attorney who specializes in gambling law, called Friday’s decision "an outlier" among other court rulings and agency opinions, which have concluded that the federal Indian gambling law is not broad enough to allow internet-based gaming.

"That's the kind of ruling that will get the attention of the U.S. Supreme Court," Wallach said.

John Sowinski, president of the Central Florida-based group No Casinos, told the News Service that Friday’s ruling “is not the final word” on the issue, pointing to the 2018 constitutional amendment.

“At the end of the day, the will of 72 percent of the people in Florida is going to be respected, and that is that voters, not politicians, have the final say on whether we expand gambling in Florida,” he said.

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