Legal Sports Betting In Florida A Good Bet Despite Obstacles

Legal Sports Betting In Florida A Good Bet Despite Obstacles
© USA Today

The prospect of legal sports betting in Florida returned with the annual legislative calendar for more than a decade. And like so many feared-but-fizzled hurricanes, the oft-predicted sports betting turbulence never materialized.

Until 2021.

This time, a Category 5 gambling maelstrom socked Florida with unbridled fury and barely enough warning to prepare for it its impact.

A deal signed by Gov. Ron DeSantis and the Seminole Tribe of Florida in April will allow legal sports betting and is expected to generate billions in revenue for the Sunshine State’s coffers. That the Seminoles, pari-mutuel holders, legislative leaders and the governor were working on a major gambling deal was not publicly known before March.

COLUMN: NY, Florida have sports betting deals, but drawbacks remain

Florida will be the most-populous state in the nation and the 30th to allow sports betting once a series of gambling-related bills are approved in a special session of the Florida Legislature that begins on May 17. More than 21.538 million people call Florida home, according to U.S. Census data released on April 26. The state welcomed more than 131 million visitors in the last pre-pandemic year of 2019.

Some key points from the proposed revised 30-year, 75-page gambling compact:

  • The Seminole Tribe would be able host retail legal sports betting at its seven casinos, through a mobile platform and in partnership with at least three pari-mutuel facilities — pending Tribe approval
  • Floridians would have to be at least 21 years old to wager on pro and college sporting events, motor sports and Olympic contests but prop bets would not be allowed on college games
  • The Tribe can add craps and roulette at its casinos, and open as many as three new gambling facilities on its properties without local approval
  • Official league data is not required for sports betting and pro teams would not get a cut of the action
  • It carries a $2.5 billion revenue-sharing guarantee in the first five years ($500 million per year), with $6 billion in new revenues for Florida through 2030 (among the excluding events is a “pandemic.”)
  • All betting servers would operate on Tribal lands. Actual wagering is permitted anywhere in the state. Current pari-mutuel license holders — once approved by the Tribe — will keep 60% of the betting revenue generated at their branded sites and on their partner apps
  • Both the pari-mutuels and the Tribe have the option to open sportsbooks in partnership with “management contractors” such as DraftKings, 888, FanDuel, PointsBet and WilliamHill

“Sports betting takes this to a whole new level, caters to a much broader constituency. And coupled with the state’s rapid growth, I think this is where the opportunity lies, the combination of digital and the growing, vibrant market,” said Yaniv Sherman, senior vice president and head of U.S. at 888 Holdings.

Getting the support of the Tribe and the state’s pari-mutuel license holders was essential for this deal to materialize. That combination of support was often lacking in multiple failed previous attempts to bring sports betting to Florida.

“It generates more growth opportunities for stakeholders, but also more tax dollars for the state, which is, I assume, a win-win situation,” Sherman said.

Satisfying all the on the front end was critical.

“The market is big enough to slice everyone a piece of the pie. The question, what would the out-of-state operators go after or could they go after? We're included in that,” Sherman said. “In the state itself, typically (a) market grows faster when there's more competition, but you know, remains to be seen how this market evolves. We need to continue watching that space and exactly what will become available.”

Obstacles Include Potential Lawsuits, Federal Approval

Approval of the deal by Florida’s GOP-laden legislature is all but certain. Obstacles include an expected lawsuit claiming the deal violates a Florida 2018 Constitutional amendment requiring 60% of voters to approve any expansion of gambling. Federal approval is also required because of the Tribe’s involvement and the Indian Gaming Regulatory Act. The Department of Interior has 45 days to approve such a deal compact once it has been ratified. If it doesn’t act within that period, the compact is automatically enacted.

Tribes outside of Florida have tried and failed to win Interior approval for the ability to allow online sports betting in their states with the provision of having the sports betting servers on those same Tribal lands. An OK for Florida could have a ripple effect elsewhere and likely lead to lawsuits. Many see the IGRA as the biggest obstacle.

A South Florida gaming stakeholder spoke at length about his group’s concerns over the bill but did not want their name because of their potential participation in future litigation.

The biggest concern expressed by the stakeholder is a provision on Page 18 of the proposed compact that allows the Seminole Tribe to pay a 2% penalty if it cannot secure deals with at least three current pari-mutuel license holders after negotiating in “good faith.”

That is viewed as an easy out for the Tribe.

“Where it becomes troublesome is going off-reservation with sports betting activity and full-scale internet gaming in the state of Florida,” the stakeholder said. “Sports wagering has been bandied about for years — via pari-mutuels and sports teams — everyone has been engaged in sports wagering in Florida. But there is no obligation on the part of the Tribe to give sports wagering to the stadium or pari-mutuels. Most troubling for pari-mutuel facilities is that it’s not guaranteed. The Tribe can give it to you or operate fully with a 2% penalty. Something they can make up easily. There is an inkling that’s sports betting that could happen — but when you wade through the language — there is no true intent for Tribe to do it.”

One legal expert says he believes bettors at least will be able to wager on the Super Bowl 55 champion Tampa Bay Buccaneers at the Seminole Hard Rock Casino in Tampa by the time the Bucs raise their second championship banner in September.

“Oh, it's not going to get scuttled. No, no, no, no, no," said Robert Jarvis, a Nova Southeastern University Shepard Broad College of Law professor and attorney. "Too many people, starting with DeSantis and then going down to the legislature, the Tribe and now the pari-mutuel, who have invested too much time and effort, who stand to make too much money and whose political careers will be furthered by this. This is not going to get scuttled."Jarvis teaches a course in gambling law at the South Florida school and has been licensed to practice law in Florida since 1990.

“A lot of people keep saying: ‘Will the Federal Government, will the secretary of the interior approve this? Will the (National Indian Gaming Commission) oppose this? What about the fact that the secretary of the interior is, for the first time in history, a Native American?’ The federal government is going to sign off on this," Jarvis said. "This deal is done.”

A group called “No Casinos” has long opposed the expansion of gambling in the Sunshine Shine.

“We call on the governor and our legislators to honor the will of the people, who demanded that any new casino gambling authorization occurs at the ballot box, not behind closed doors in Tallahassee,” John Sowinski, president of No Casinos, said in a statement on social media after the deal was announced. “We are committed to defending the integrity of Florida’s Constitution, and ensuring that the will of the people is respected.”

Jarvis remains steadfast in his belief the deal will happen.

“There's still work to be done. The other bills that were introduced before the compact was unveiled, creating the state gambling commission, partially decoupling the horse racing industry and the highlighting industry have to be passed as well,” Jarvis said. “But all of that will be done on May 17th. This is all now. This train has left the station; it's not coming back. The ‘No Casinos’ people will sue, the lawsuit will be a nuisance, it will be thrown out of court. That's why this is all being done through the compact. Because Amendment 3 says that it exempts compact. That's what went through the compact.”

Legislation to establish a Gaming Control Commission and a bill that eliminates the requirement for live-action racing at certain pari-mutuel facilities, will also be reintroduced during the special session, according to Senate President Wilton Simpson.

The Impact of Sports Betting In Florida

With the addition of legal sports betting, craps and roulette, the passage of these gambling bills will elevate Florida to gambling tier second only to the likes of Las Vegas and Macau.

“You have really turned Florida into a gambling Mecca,” Jarvis said. “We now certainly have leapfrogged Atlantic City. We're going to have more simply by how large our population is and how many visitors we have. This is a massive transformation of the Florida gambling market and you know the old saying, ‘gambling begets gambling.’ You will see that once all of this is set up, the Tribe will keep coming back to the legislature, saying: ‘OK, you can get more money from us if you let us fill in the blank.’ And who knows what the next thing will be?”

Jarvis calls himself “agnostic” when it comes to gambling. But he sees this deal as a “massive transformation.” for several reasons. “For the competitors of the Seminoles, obviously it's a very bad thing because the 800-pound gorilla just became the 1600-pound gorilla,” he said. “Whether it's a good thing or bad thing really depends. Who are you and how is it going to affect you personally? If you're a vendor for the Seminoles, it's a great thing because your customer just got bigger, which means you just got bigger.”

To see just how much the gambling landscape has transformed in Florida, one needs to go back no further than Amendment 3 in 2018. That aforementioned law mandates voter approval of gambling expansion. The amendment was passed with 71% of the vote on the same ballot that elected DeSantis governor and saw Rick Scott upset Democrat Bill Nelson for the state’s second U.S. Senate seat. The primary financial backers of that bill were the tourism industry — led by Disney — and the Seminole Tribe itself.

In 2021, the Tribe is at the epicenter of this deal. Disney — whose “silence has been deafening” on this deal, according to one casino operator — is currently linked with DraftKings on multiple digital and broadcast platforms. UFC airs exclusively on ESPN and ESPN+ and has a $350 million, seven-year sponsorship deal with DraftKings. And the NFL, which airs on ESPN/ABC Monday nights, just added exclusive sports betting deals with Caesars, DraftKings and FanDuel.

There are additional reasons why this time is different for sports betting in Florida.

The support of a governor who is looking to burnish his resume for a potential presidential run in 2024, a “deal crafted that takes into account and gives to the pari-mutuels enough riches that they're not going to block it,” said Jarvis, and the proliferation of legalized sports betting elsewhere in the U.S. since the repeal of PASPA in 2018 were all vital factors in why this year is different in the long-running “saga” of legal sports betting in Florida.

“We've been talking about this since the Great Recession," Jarvis said "And everybody thought that when the Great Recession hit, that Florida was going to legalize sports betting. It's been 10 plus years and the legislature is very tired of coming back to Tallahassee every year, and we have this gambling stuff to deal with. There's a lot of pent-up demand in the legislature. Get a deal done and let's get this behind us."

The Seminoles have withheld an annual $350 million payment under their old compact since 2019, after winning a lawsuit triggered when then-Gov. Scott allowed pari-mutuel facilities to operate live card rooms. The new compact, which can be renegotiated in 36 months, drops the Tribal opposition to those card games.

Florida Has Long History With Legalized Gambling

Approval of this compact would be the latest colorful chapter in Florida’s long and lucrative history with legalized gambling.

In 1828, a $1,000 lottery was approved to fund the Union Academy in Jacksonville, 17 years before Florida became a state. Derby Lane Greyhound Track in St. Petersburg opened in 1925 and ran live dog racing for 95 years. Florida legalized pari-mutuel betting in 1931 as a way to raise revenue and increase tourism during the onset of the Great Depression. It even briefly approved slot machines in the 1930s. Jai-alai betting was legalized in 1935. The Florida Lottery came more than 50 years later.

Dog racing was outlawed by Florida voters via referendum in 2018. Florida had 11 tracks at the time. The final legal greyhound race in Florida went off on Dec. 31, 2020, at Palm Beach Kennel Club. Both Palm Beach and Derby Lane remain open for poker and simulcast wagering.

Simulcast racing allows those facilities, and several others in Florida, to remain open under their pari-mutuel licenses even though they no longer offer wagering on live events on site. There are three live-action jai-alai frontons currently operating in the state. Live in-season thoroughbred racing continues at Gulfstream Park in Miami and Tampa Bay Downs. Live harness racing takes place from November until May at Isle Casino Pompano Park, a Caesars property.

“Gaming, in one form or another, is a voter-approved legacy industry in our state that has contributed billions of dollars to our economy for education, health care and infrastructure, while providing hundreds of thousands of jobs to Floridians over the course of nearly 100 years. In my view, we have a responsibility to update our laws to reflect current realities of this heavily regulated industry and to ensure those laws are properly enforced,” Simpson said.

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