Florida legalizes sports betting with approval of sweeping Seminole Tribe gaming compact
Just one day after the Florida Senate approved the state’s gaming compact with the Seminole Tribe by a vote of 38-1 the House of Representatives approved the compact by a vote of 97-17. The gaming compact effectively legalizes Florida online sports betting in the state and expands gaming opportunities for the Seminole Tribe.
The 30-year gaming compact will bring an estimated $6 billion to the Sunshine State over the next 30 years and officially legalize sports betting for Florida gamblers. 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.
As revealed on Monday, sports betting will not be allowed in the state in any form until at least Oct. 15, 2021.
During debate of the bill, Florida State Rep. Mike Grieco (D-113) said the inclusion of online sports betting in the compact would likely be held up by the courts. He also noted that if the vote was held by a “secret ballot” he doubted it would be approved. Grieco cast one of the 17 votes against the compact.
Legal challenges against the compact are expected.
Florida online sports betting a cause for concern
With the Senate and House approval of SB 2A the gaming compact will now be sent to the federal government for review by the Office of Indian Gaming and approval from the U.S. Department of the Interior. Questions remain for several details in the compact in accordance with Indian Gaming Regulatory Act (IGRA), namely the potential legality of online sports betting with servers housed on tribal land. The U.S. Department of the Interior will have 45-days to review the compact and either approve, deny or take no action on the document.
Online sports betting is still a major point of contention in the bill and may be a hold up with government review and possibly in the courts. During his testimony yesterday Indian gaming law expert George Skibine said the Department of the Interior will have to look at the compact and determine if the servers being on Indian land means online bets placed anywhere in Florida would be deemed to be placed on Indian land.
“It will be a difficult decision for the department,” he said.
Skibine did note that an oft cited U.S. Ninth Circuit Court of Appeals ruling against online betting may not hold the same weight in Florida. The Circuit Court of Appeals ruled against a San Diego online casino that argued a bettor’s location did not matter as long as the location of the server receiving the bet was on Indian land. Skibine said Florida is under the U.S. Eleventh Circuit Court of Appeals.
How will sports betting work in Florida?
The new 30-year Florida gaming compact will bring in person and online sports betting to Florida, allow the Seminole Tribe casinos to offer roulette and craps, and allow the expansion of tribal casinos at several locations. Florida sports betting will be effectively run by the Seminole Tribe and the state will get a share of the sports betting revenues.
Florida online sports betting and retail sports betting are both included in the compact and are limited to Florida residents 21 years of age or older. Importantly, servers will be housed on tribal property and any bet placed in the state will be deemed to take place where the servers are located, which may lead to legal battles down the road.
Under the details of the compact, state gamblers will be able to place wagers on professional sports, collegiate sports, Olympic or international sports competition, motor vehicle race, or individual performance statistics of an athlete or any individual participant. In-play wagers will be accepted, but prop bets on collegiate sports will not be included.
All sports wagering will be completed exclusively through Seminole Tribe controlled sportsbooks, or qualified parimutuel permitholders to offer sports betting at their facilities. The gaming compact requires the Seminole Tribe to compensate the partnered parimutuels with an amount no less than 60% of the difference between the net win earned by the tribe on patrons who access their wagering platform through the parimutuels and Tribe expenses related.
Online sports betting with Seminole Tribe mobile platforms will see a 13.75% state-imposed tax on net wins. To encourage the tribe to partner with parimutuels to offer sports betting, the state will increase the 13.75% tax rate to 15.75% if at least three parimutuels partnerships are not made within three months of the signing of the compact.
The tax rate on net wins for the Tribe from parimutuel based wagers will be set at 10%.
No online casino gaming in compact
To make the gaming compact more palatable for lawmakers, House Speaker Chris Sprowls revealed in the first day of the special session that the gaming compact would not include online casino gaming, a sticking point for many legislators. Additionally, the gaming compact will not include two controversial Daily Fantasy Sports (DFS) bills that would have set DFS license prices at $1 million, nearly 10-times more expensive than any state, and a minimum age of 21 for users. Both FanDuel and DraftKings opposed the bills.