Lawsuits To Overturn Florida Compact More Hype Than Impact

Lawsuits To Overturn Florida Compact More Hype Than Impact
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Watch any local weather forecast in Florida this time of year and you’ll be told that a “tropical system” is somewhere in the Atlantic Ocean or Caribbean Sea. The meteorologist offers the required words of caution and reassures viewers that this mix of wind, rain and hot air will be monitored in case it becomes a threat to Sunshine State.

Many of these storms miss the state, fizzle or head elsewhere to wreak havoc.

A pair of legal maelstroms appeared last week in opposition to the federally approved gaming compact between the State of Florida and the Seminole Tribe.

The lawsuits, one new and the other amended, have been filed by the same parimutuel license holders seeking to overturn the Department of Interior’s approval to expand sports betting in Florida. The compact expands Florida gambling, and with 22.4 million people, it becomes the largest state in America with legal sports betting.

In much the same way hurricanes and tropical storms almost always hit Florida with more hype than fury, these two legal actions smashed the internet and social media with all the impact of a Category 5 storm striking South Beach.

But, as of this writing, their impact remains nonexistent.

And like so many other forecasts of doom for this battered-but-very-much-legal compact, they remain just that, talk.

Or in this case, legal pleadings.

Seminoles Fight Back

Monday, the Seminole Tribe of Florida went on the offensive and took out an ad in a widely circulated Politico Florida Playbook newsletter reminding anyone willing to listen that the compact is very still much real before highlighting some of its benefits to the state.

Until or unless a judge rules otherwise, nothing has changed in terms of sports betting coming to Florida since the DOI let the 45-day examination window expire, thus allowing the compact to take effect under the Indian Gaming Regulatory Act. Sports betting remains on track to begin in Florida as soon as Oct. 15.

The plan remains to have the Tribe hosting live, in-person betting at its casinos and allowing on-line betting statewide through servers located on tribal lands.

This “hub-and-spoke” online betting approach has been a focal point of much of the litigation and legislative opposition to the compact, which was signed by Florida Gov. Ron DeSantis and Tribe Chairman Marcellus Osceola Jr. in April.

The 30-year compact also allows craps and roulette inside the Indian casinos, clears the way for new casinos located more than 15 miles from the current Seminole Tribe sites, and guarantees the state $500 million in new revenue over the next five years. That amount is lowered to $450 million annually if the sports betting provisions do not go into effect.

New Legal Action

The plaintiffs in both lawsuits making news last week are the owners of Magic City Casino in Miami-Dade County and Bonita Springs Poker Room. A 42-page federal lawsuit was filed in the U.S. District Court for the District of Columbia and names Interior Secretary Deb Haaland and the DOI defendants. The Magic City group amended a previously filed federal lawsuit in Florida, adding Haaland and the DOI as defendants in that case. The new lawsuit in Washington does not name the state or Tribe as defendants.

In a related development, Florida Department of Business and Professional Regulation Julie Brown and DeSantis have been ordered by a federal judge in Tallahassee to answer the original lawsuit filed by the Magic City owners by Aug. 31. That’s a week earlier than expected.

The two parimutuel facilities are owned by the Havernick family. The suit filed in Washington claims the way sports betting is structured in the compact will cause a “significant and potentially devastating” impact on their businesses. Under the terms of the compact, the Tribe must allow certain parimutuel licenses holders to operate their own sports books and mobile apps. The Tribe would receive 40% of the net revenues generated by each parimutuel facility. If the Tribe doesn’t grant at least three license holders the right to take sports wagers, it will pay a 2% penalty.

The lawsuit filed last week called the “hub and spoke” approach “legal fiction” and claim the Tribe has no right to control or operate any betting that occurs off Tribal lands, which would be the case, they claim.

It also attacked the standing of DOI to approve the compact because of the way in which sports betting is permitted: The Seminoles can accept cash for on-site wagering but the parimutuels cannot. The parimutuels claim their reliance on in-person wagering will be harmed because of the presence of online wagering.

“Although Secretary Haaland could have approved a compact between Florida and the tribe to permit in-person or online sports betting by patrons physically on the tribe’s reservations, the plain language of IGRA prevents her from approving the compact here because it does not comply with IGRA’s ‘Indian lands’ requirement. The compact therefore both violates IGRA and falls outside the scope of compacts she is authorized to approve in the first instance,” the lawsuit filed last week states

Ballot Initiative Sought

A constitutional amendment passed in 2018 requires voter approval for gambling expansion in Florida. However that amendment, which was sponsored in part by the Seminole Tribe, has an exemption for any gambling expansion on Indian lands.

Several major sportsbooks, including DraftKings Sportsbook, FanDuel Sportsbook and BetMGM Sportsbook are backing a 2022 ballot initiative in Florida that would allow online and in-person sports betting to be operated by any company licensed in at least 10 other states for one year or more to operate in Florida.

Under the compact, the Tribe has a monopoly on sports betting — save for its partner parimutuel license holders. No other entities are allowed to own sports books in Florida. But anyone can bring in an outside firm to operate them for a management fee.

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