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Can Cash-Strapped Florida Finally Make Sports Betting Work?

Florida sports betting bills are more enticing than ever in the Covid era, as the state struggles for revenues. The legislation faces several obstacles: opposition from the Seminole Tribe and Disney (l.), and fluid definitions of gambling.

Can Cash-Strapped Florida Finally Make Sports Betting Work?

On March 2, Florida lawmakers introduced legislation to approve sports betting in the state. Rep. Anika Omphroy and Rep. Chip LaMarca sponsored House bills, while Senator Jeff Brandes sponsored the Senate version. “Safe and regulated domestic sports wagering is an industry Florida deserves,” LaMarca said.

That was the easy part. But the objective faces two big roadblocks. First, the powerful Seminole Tribe, which will certainly want a corner on sports betting. And second, a voter referendum that may or may not be required to bring wagers to the Sunshine State.

“This isn’t the first time lawmakers in Florida have introduced sports betting bills to be discussed during the state legislative session, and it likely won’t be the last, either,” said Josh Swissman, founding partner with the Strategy Organization, a consultant to the gaming and hospitality industry.

In fact, Brandes (l.) filed sports betting legislation in 2019, before the pandemic, but couldn’t push it through in the 2020 session.

The Seminoles have a near-monopoly when it comes to gaming in Florida, with ownership of not just the two flagship Hard Rocks resorts, but four other casinos in the state. And they’ve steadfastly opposed attempts to let others join the dance.

Their opposition, along with a major campaign by Disney aimed at cutting down expansion of slots and table games, led to a 2018 referendum that required voter approval of any additional gambling.

But wait. The Seminoles no longer pay the state for the exclusivity spelled out in their gaming compact. According to the tribe’s spokesman, Gary Bitner, the state violated the terms of the compact “by not enforcing the prohibition of designated-player card games” offered by racinos.

The courts affirmed the violation. Even after the breach, the Seminoles paid the state for two years. But with no progress towards resolution, the tribe stopped payments in 2019, Bitner said.

Since the coronavirus pandemic, that money—in the past, about $350 million per year—is sorely missed.

“As we grapple with a tough budget year, and as many good programs are facing deep cuts, it’s time Florida gets innovative when it comes to keeping dollars in our state,” LaMarca told Florida Politics. He wasn’t talking about compacts. Indeed, neither LaMarca nor Brandes had contact with the Seminoles while crafting their bills.

Under the terms spelled out in the legislation, a sports betting license would carry a one-time application fee of $7.5 million. Annual fees would go for $1 million. Licensees would pay a 22.5 percent tax. The legislation envisions in-person wagering as well as statewide mobile wagering.

The proposed legislation said sports betting licenses may be issued to:

  • Parimutuel facilities
  • Existing tribal casino properties
  • Professional sports venues

The provision for parimutuels could be interpreted as covering jai alai, dog tracks and race tracks, regardless of their location in the state. The second gives the Seminole tribe its role. The third opens up licensing to Hard Rock Stadium, Marlins Field, Tropicana Field, TIAA Bank Field, American Airlines Arena, Amway Center, and of course, Raymond James Stadium, home of the most recent Super Bowl. A truckload of opportunities.

And Now for the ‘Whereases’

But there’s still the nagging question of the referendum. Bill sponsors say voters come into play when it comes to any expansion of gambling. If sports betting is not gambling, it’s not subject to voter approval. If it is—and according to the National Indian Gaming Association, sports betting falls into the category of Class III gaming—then voters must have a say.

Here’s where the “whereases” come in. In the language of the House bill:

  • “Whereas, sports wagering is not a form of gambling that was typically found in casinos as of November 6, 2018. According to data provided by the American Gaming Association, there were 40 states in the United States that had legal casino gambling as of November 6, 2018, and of those 40 states, only Nevada, Delaware, New Jersey, Mississippi, West Virginia and New Mexico had casinos that included sports wagering as an amenity for patrons. Of the more than 500 tribal casinos that were operating on November 6, 2018, only three offered sports wagering.”
  • “Whereas, there are fundamental distinctions between sports wagering and casino gambling. The location of the underlying contests distinguishes the two activities. In sports wagering, the athletic competitions or sports events on which the bets or wagers are placed usually occur and are decided at locations beyond a casino’s four walls.”

Yet another whereas speaks to the matter of “substantial skill” in sports betting, including the exercise of a bettor’s judgment in attempting to select winners or losers through his or her knowledge of team records and players’ past performance. Casino games are mostly, if not all, luck.

What do the Seminoles say about this latest thinking? “The tribe does not comment on pending legislation,” Bitner said. It won’t comment on hypotheticals, either.

According to Swissman, “The only real way forward is for the state and the tribe to renegotiate the existing 20-year Class III gaming compact.”

Bitner confirmed that negotiations have begun. Will a deal with the tribe take precedence over legislation? And if so, does that leave much time to legislate, given the April 30 end to the session?

Assuming compact negotiations succeed, it would become a cost-benefit analysis for the Seminoles, Swissman said. “Does the ability for them to offer sports betting, in retail or online form, deliver them enough benefit to offset the cost of the fee that the state will undoubtedly charge them, plus the cost of associated lost business if bettors are also able to place their wagers elsewhere? Only time will tell.”

Avoiding the ‘Montana Situation’

If the Seminoles offered the only game in town when it comes to sports betting, the state might find itself in the “Montana situation,” Swissman said. Montana selected Intralot as its operator, and as the only game in town, the company offered wagering options that couldn’t compete with other markets.

As a result, “Betting volume ended up being a fraction of what it was anticipated to be,” Swissman said, “with most Montana action likely being pushed to illegal offshore markets.”

And that’s an outcome no one in the industry wants, in Florida or elsewhere. We will feel the effects of the pandemic on our economy for years.

According to WPEC West Palm Beach, the fiscal damage to Florida’s state budget caused by the Covid-19 outbreak could reach $2.5 billion over the next few years. The cratering economy could finally tip the scales in favor of legal sports betting in Florida.

As LaMarca said, “The time is right for Florida to look at dollars to stay in Florida. Taxes and fees that are going to other places or not being collected, that are legal, should stay in Florida.

“The good thing, it’s not a partisan issue.”

Articles by Author: Bill Sokolic

Bill Sokolic is a veteran journalist who has covered gaming and tourism for more than 25 years as a staff writer and freelancer with various publications and wire services. He's also written stories for news, entertainment, features, and business. He co-authored Atlantic City Revisited, a pictorial history of the resort.