Seminoles Shut Down Mobile After District Court Ruling

The Seminole Tribe of Florida discontinued mobile sports betting, after an appeals court panel refused to stay a district court judge’s ban on sports betting in the state. The bets were permitted in the state’s new tribal gaming compact, but now will be offered only in person.

Seminoles Shut Down Mobile After District Court Ruling

U.S. District Court Judge Dabney Friedrich says she won’t issue a stay on her ruling that effectively bans all sports betting in the state.

The judge also said the Seminole Tribe may not launch roulette and craps at its Florida casinos. Friedrich contends the tribe hasn’t proved it would be irreparably harmed if the stay isn’t granted.

As a result, the tribe halted sports wagering on its app, but in-person sports betting will remain at the tribe’s Florida casinos.

At issue is the concept, found in the amended 30-year gaming compact signed by the state of Florida and the Seminole Tribe last spring, that any bet placed anywhere in Florida that’s processed on a Seminole server is considered a bet placed on tribal lands. That model, which is similar to a state regulation in New Jersey that assumes the sports bets are made in Atlantic City, the only place casino gambling is legal in the state, gives the tribe a monopoly on retail and online sports wagering in Florida.

In her ruling, Friedrich wrote, “Altogether, over a dozen provisions in Indian Gaming Regulatory Act regulate gaming on ‘Indian lands,’ and none regulate gaming in another location. It is equally clear that the Interior Department secretary must reject compacts that violate IGRA’s terms.” Friedrich added, although the compact “deems” sports betting to occur at the location of the tribe’s servers, “this court cannot accept that fiction. When a federal statute authorizes an activity only at specific locations, parties may not evade that limitation by ‘deeming’ their activity to occur where it, as a factual matter, does not.”

Under the deal, the Seminoles would have given the state $2.5 billion over the first five years, in exchange for controlling sports betting and being allowed to add craps and roulette at tribal casinos. Tribal officials said $37.5 million in sports wagering revenue was paid to the state in both October and November.

Meanwhile, the Seminole Tribe filed for an immediate stay on Friedrich’s ruling to the D.C. Court of Appeals. In their brief, lawyers for the tribe stated, “Without a stay, the tribe will suffer injury to its sovereignty, and hundreds of tribal and vendor jobs related to sports betting, craps and roulette will be lost, hurting hundreds of Floridians and their families. Further, tens of millions of dollars in investments will be jeopardized, and the people of Florida will lose nearly $40 million per month in tribal payments.”

The Department of the Interior and the plaintiffs, West Flagler Associates, responded to the tribe’s emergency motion. The Interior Department declared, “The federal government advises that, while it does not join in the tribe’s motion for stay pending appeal and does not agree with all analysis presented in that motion, it also does not oppose the motion.”

In their brief responding to the tribe’s emergency motion, the plaintiffs, West Flagler Associates, owners of the parimutuels Magic City Casino and Bonita Springs Poker Room, stated the “unambiguously unlawful” compact causes irreparable harm to the businesses. Also, the plaintiffs said, “The tribe wants to have it both ways: to persuade this court to grant a stay, it tells the court that it is about to lose millions in revenue; but if this court refuses to grant a stay, it is keeping its options to ‘remain fully open to all players.’”

The plaintiffs also argued that any harm the tribe will suffer is self-inflicted, since it launched sports betting product before the district court ruled on the compact’s legality.

The anti-gambling group No Casinos, Monterra MF LLC, a Broward County business, and Miami businessmen Armando Codina, James Carr and Norman Braman filed an amicus brief, joining West Flagler to oppose the tribe’s emergency stay request, but for different reasons. No Casinos’ brief stated, “The parimutuels support gambling expansion so long as they are allowed to enjoy it alongside the Seminole Tribe. No Casinos and its allies oppose the expansion of gambling in the state, consistent with the Florida constitution, even if it occurs on tribal lands.”

The brief also argues the tribe violated the will of Florida voters who passed a constitutional amendment in 2018 giving them exclusive rights to approve gambling expansion. “In substance, the Seminole Tribe argues that the public interest is of no consequence, even where an agreement to expand gambling is plainly violative of Florida law that gives voters the exclusive right to approve or reject the expansion of gambling.”

The Washington, D.C., district judge struck down the compact on November 22, ruling that it violates federal Indian gaming laws. The tribe, continuing to accept sports bets, filed for a stay of that order, which Friedrich denied, and filed notice it would appeal to a three-judge appellate panel, where it has again requested a stay.

The three-judge appellate panel then announce the ruling on Friday, December 3. A decision favoring the tribe would have allowed sports betting to continue while Friedrich’s ruling plays out. A denial of the motion required the state and tribe to revert to the 2010 compact, which did not include mobile sports betting.

“Despite the decision, the Seminole Tribe looks forward to working with the state of Florida and the U.S. Department of Justice to aggressively defend the validity of the 2021 Compact before the Appeals Court, which has yet to rule on the merits of the 2021 Compact,” tribal spokesman Gary Bitner said in a statement. “The Seminole Tribe of Florida, the state of Florida and the United States have all taken the position that the 2021 compact is legal.”

Attorney Daniel Wallach, who specializes in gaming law, said, “You cannot shoehorn mobile sports betting into a compact. The judge’s ruling makes that crystal clear.”

Wallach noted the tribe could try to get sports betting legalized through a ballot measure. The group Florida Education Champions, largely supported by DraftKings and FanDuel, currently is gathering signatures on petitions to place the issue on the 2022 ballot.

“The advantage, I think, to having the initiative rather than the compact provide online sports betting is it’s the difference between a monopoly with just one provider versus a competitive marketplace,” Wallach said. If voters approved the issue, sports betting could launch by January 2023. Network Lead Analyst Dustin Gouker commented, “We knew from the beginning the unusual nature of the compact would eventually put the fate of Florida sports betting in the hands of the courts, and this is far from over. The future for Florida sports betting stands on shakier legal ground and its future is far murkier today than it was yesterday.”

Also last week, Las Vegas Sands filed a suit against the tribe for “tortious interference with business relationships” claiming the Seminoles are trying to block Las Vegas Sands from gathering nearly 900,000 signatures needed to get a gaming expansion measure on the 2022 ballot.

LVS alleges that the tribe is paying off its hired petition gatherers to get them to back off by working for them in signing a so-far non-existent tribal referendum or not work at all.

“In addition to their coordinated harassment and intimidation campaigns, parties acting on behalf of the Seminole Tribe are ‘paying off’ contracted petition circulators as part of a scheme to ensure such circulators do not perform the tasks they have been contracted to provide to the plaintiffs,” said the lawsuit. The suit seeks to stop the interference as well as seeking unspecified monetary damages.

Senator Jeff Brandes is seeking an investigation into the situation in which he alleges that the Seminoles were paying others to bully, intimidate and harass Florida voters.