Florida gaming compact faces its first legal challenge from casinos
The Florida gaming compact has yet to be ruled on by the U.S. Department of the Interior and it’s already facing a legal battle in the state.
On Friday, July 1, West Flagler Associates, on behalf of Magic City Casino, and Bonita Springs Poker Room filed the first lawsuit challenging Florida’s tribal sports betting compact. The lawsuit contends the Florida online sports betting component of the document violates the Indian Gaming Regulatory Act (IGRA).
Florida online sports betting is in question
The 30-year gaming compact is estimated to bring $6 billion to the Sunshine State over the next 30 years and officially legalize Florida sports betting. It gives exclusive sports betting rights to the Seminole Tribe. The deal is estimated to provide $2.5 billion to the state in the first 5 years alone, with annual payments of at least $500 million.
The lawsuit, filed in the U.S. District Court for the Northern District of Florida, argues that online sports betting outside of tribal lands is illegal. The 30-year gaming compact contains language claiming that online sports betting off of tribal land is legal, as the bets are process through Seminole Tribe internet servers that are physically located on tribal lands. The lawsuit requests the court to prohibit sports betting from the gaming compact.
The plaintiffs argue that casinos in the state will lose millions in revenue if Florida residents can participate in sports wagering from their own homes.
“As a result of these provisions, pari-mutuels that are unable to or choose not to enter into a marketing agreement with the Tribe will be unable to compensate for the loss of revenue from in person patrons diverted by online sports betting,” the plaintiffs wrote in the lawsuit.
Second threat to Florida sports betting in last week
As written the gaming compact allows for the Seminole Tribe to offer online sports betting through a “hub-and-spoke” program for qualified parimutuels and online sportsbook operators. Many industry representatives and legal experts have shared concerns that the federal government would not find the online sports betting workaround in the document as legal.
“Deeming’” the bet to have been placed on Indian lands because the servers are located there contradicts decades of well-established precedent interpreting applicable federal law. Contrary to the legal fiction created by the 2021 Compact and Implementing Law, a bet is placed both where the bettor and the casino are each located,” the plaintiffs wrote.
The lawsuit is the second potential threat to the gaming compact presented in the last week. The Florida Division of Elections accepted and published a 2022 Florida ballot initiative that would authorize sports and event betting under Florida law at professional sports venues and parimutuel facilities if approved by voters. It would allow Florida online sports betting through third-party operators and by Native American tribes with a gaming compact. The measure is backed by DraftKings and FanDuel.
To be placed on the 2022 ballot the measure must receive 891,589 valid signatures, which is 8% of the votes cast in the last presidential election. It also requires signatures equal to at least 8% of the total votes cast in the last presidential election in 14 of Florida’s 27 congressional districts.