Dan Marino didn’t place Florida’s first mobile sports bet. There were no balloons. No champagne. No broadcast. No press conference. No fanfare.
But on November 1, the Seminole Tribe began taking sports bets online throughout the state, part of the compact approved with the state in May. The Hard Rock Sportsbook—the Seminoles own Hard Rock International—made an app available for download by Florida residents, which let bettors deposit funds and wager on games, according to the News Service of Florida.
While the app enters the market, legal challenges to the compact continue to roll through the courts both in Florida and in Washington D.C.
The tribal-state established a hub-and-spoke sports betting system that runs through computer servers on tribal lands. As an aside, the compact also permits the Seminoles to add craps and roulette to their casinos. All this will be worth about $2.5 billion to the state over five years, maybe more.
Another part of the deal requires the tribe to enter agreements with pari-mutuels to market sports betting in exchange for 60 percent of the profits. So far, the Seminoles have contracted with the Palm Beach Kennel Club; Hialeah Park Casino; Ocala Gainesville Poker and Ocala Breeders’ Sales Co.; Tampa Bay Downs; and TGT Poker & Racebook in Tampa.
Meanwhile, a federal judge heard a case November 5, in which Florida’s Magic City Casino and Bonita Springs Poker Room challenged portions of the compact. The suit seeks redress from the U.S. Department of the Interior and Secretary Deb Haaland.
At that hearing, U.S. District Judge Dabney Friedrich gave the U.S. Department of Justice until November 9 to explain whether the sports-betting provision in the compact is in keeping with the Indian Gaming Regulatory Act (IGRA), which governs tribal gaming.
According to Yahoo News, Friedrich spent the first 30 minutes of a two-hour hearing arguing with Rebecca Ross, a lawyer with the DOJ’s Indian Resources Section, about the government’s “unwillingness to take a position on the issue at the crux of a lawsuit” filed by the two parimutuels. In August, the federal Bureau of Indian Affairs, which Haaland oversees, allowed a 45-day review period to end with no action on the compact, effectively allowing the compact to take effect.
Magic City Casino in Miami-Dade County and Bonita Springs Poker Room in Southwest Florida say the sports betting plan is a “legal fiction” because federal law does not authorize bets that occur off tribal lands. They say the deal will have a “significant and potentially devastating impact” on their businesses.
Lawyers for Haaland said the case should be dismissed because the plaintiffs lack “standing” to challenge her actions.
Friedrich asked Ross whether the government believes that mobile sports betting that takes place outside of tribal casinos is actually occurring on tribal lands.
“We don’t have an answer to that question for you today,” Ross said. But she also said the “gaming that’s contemplated is occurring entirely on Indian lands.”
Meanwhile, DraftKings and FanDuel have anted up $10 million each to a political committee in support of a proposed constitutional amendment that would legalize sports betting at professional sports arenas, pari-mutuel facilities and statewide via online platforms. If the committee collects enough signatures, the proposal would be on the November 2022 ballot.
Not sitting back and watching, the tribe launched an expensive multimillion-dollar TV and online ad campaign urging Floridians to oppose the proposals.
Critics point out that three years ago, the Seminoles went all in to support a constitutional amendment—Amendment 3—that requires statewide approval for future gambling expansions, yet voters were not asked to weigh in on the current compact.
The deal prohibits any casino from opening within 100 miles of the tribe’s gaming resorts. The Las Vegas Sands-backed Florida Voters in Charge political committee would allow pari-mutuels that are at least 130 miles from the Seminoles’ casinos and would include blackjack and craps. That could effectively translate into adding casinos in North Florida, such as Jacksonville.
“The tribe is prepared to spend whatever it takes to protect the compact, the billions of dollars guaranteed to the state and the tribe’s Florida businesses,” said Seminole spokesman Gary Bitner said.
Bob Jarvis, a professor specializing in gaming law at Nova Southeastern University’s Shepard Broad College of Law, said anything is dead on arrival when it comes to legal action, according to Sports Handle. Under IGRA, the tribe can offer retail sports betting at its seven brick-and-mortar locations on tribal land, but these challenges relate to statewide mobile wagering throughout Florida off-reservation. IGRA became law in 1988, before internet use became widespread, when mobile betting applications were unheard-of.
The first state where tribes offered off-reservation mobile wagers was Michigan. Those tribes chose not to enter into a compact with the state, but are both regulated and taxed by the state. Connecticut’s tribes also agreed to be regulated by the state and pay an 18 percent tax on digital gross gaming revenue and 13.75 percent on retail GGR. Arizona’s tribes pay the state to cover regulatory fees for off-reservation mobile wagering, and their operators pay a 13 percent tax on gross gaming revenue to the state.
The Seminoles have a revenue share with the state but not an outright tax, and sports wagering will not be regulated by the state. The other states also don’t have Amendment 3, requiring that any proposed expansion of gaming goes before the voters, even though sports betting isn’t specifically mentioned.
“Who drafted Amendment 3?” Jarvis said. “The Seminoles. They wouldn’t do anything to hurt themselves. They are very smart, and Jim Allen (CEO of Seminole Gaming) is a tremendous leader.”
Jarvis points out that the amendment only gives voters the “exclusive right to authorize casino gambling in the state of Florida.” Those games are then defined as “any of the types of games typically found in casinos,” which at the time, did not include sports betting.
“This is all getting done on past technicalities,” said Brendan Bussmann, gaming consultant and partner at Global Market Advisors. “Clearly three years ago, the Seminoles believed the best way to get gaming expanded was through the people, and now that no longer matters, and that’s not right. My angst over it is that the Seminoles should have gone to get the compact updated (in 2018) with sports betting included. There was a window in good faith to go negotiate the compact and add that in.”
According to IGRA, “you’re only supposed to take bets if you’re an Indian tribe, and then you can only take bets that are on Indian lands,” Jarvis said. “When a court faces a situation involving a decision legislators made when they couldn’t have foreseen the future … it is supposed to ask itself how the legislators would have voted had they been able to see the future. IGRA was designed to pull the tribes out of poverty. Congress, if it had foreseen the advent of the internet, would have explicitly authorized the hub-and-spoke model.”
Should the legal challenge be dismissed, the pari-mutuels could then turn to an appellate court, which has a three-judge panel. And if an appellate court dismisses, then the pari-mutuels could appeal to the U.S. Supreme Court, though it accepts just a small fraction of appeals filed.
Until November 1, the pari-mutuels could not show “irreparable harm” in a business sense because the tribe had not launched sports betting. Magic City and the Bonita Springs Poker Room claimed in both lawsuits that allowing the tribes to offer wagering as laid out in the compact would cause financial duress and potentially force them to close their doors. But without live wagering, they could not prove that.
“We’re living in the Seminoles’ world,” Jarvis said. “That’s the deal that was struck. And everyone else will get the crumbs. The Seminoles have been working toward this kind of deal since the 1990s.”
Louisiana also launched sports betting October 31, and went with fanfare.
Former New Orleans Saints quarterback Bobby Hebert placed the first bet when he wagered $1,100 on the Saints to cover the point spread against the Tampa Bay Buccaneers. The bet occurred at the Caesars Sportsbook at Harrah’s New Orleans, according to station WVUE.
Caesars also opened a sportsbook in the Horseshoe Casino in Bossier City. The Boomtown Casino in Harvey and L’Auberge Baton Rouge received sports betting licenses as well.
The Paragon Casino in Marksville took bets beginning October 6. The Tunica-Biloxi Tribe of Louisiana owns the property and is not regulated by the state.
“We believe because of the great food, music and culture we can attract people to Louisiana that come spend a week here for major sports events because they have that ability to bet legally here now,” said Lt. Governor Billy Nungesser, who cut the ribbon at Boomtown Casino. “Hopefully, we’re really going to see this be a shot in the arm as we grow tourism in the gambling industry for those people who do want to gamble.”
In New Hampshire, Nashua voters opted-in to allow sportsbook retail operations. The vote was 7,387 to 6,207, according to New Hampshire Public Radio. But in Portsmouth, voters narrowly defeated KENO at restaurants and other businesses. The difference was just 121 votes.
