Biden Administration breathes new life into Seminole Compact gaming deal

by | Aug 19, 2022

  • Attorneys for the U.S. Department of the Interior filed a brief Wednesday defending the Biden Administration’s decision to sign off on the Seminole Compact
  • The deal, which allowed mobile phone and online sports betting to take place in Florida, was halted by a federal judge citing the Indian Gaming Regulatory Act
  • The issue centers around the “hub-and-spoke” sports betting concept allowing gamblers to place bets anywhere in Florida through computer servers located on Seminole lands
  • The court initially ruled that the state’s attempt to “deem” hub-and-spoke betting to be taking place only on the server stillallowed gambling off property owned by the the Seminoles

TALLAHASSEE — The Biden administration is urging an appeals court to reinstate a deal that gave the Seminole Tribe control of sports betting throughout Florida, nearly nine months after a Washington, D.C.-based judge ruled that the 30-year agreement violated federal law.

A U.S. Department of the Interior brief filed Wednesday offered a full-throated defense of the Biden administration’s decision to allow the gambling agreement, known as a compact, to go into effect.

The deal, signed by Gov. Ron DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola, Jr. and ratified by the Florida Legislature in a special session last year, opened the door for the first time to sports betting in the third-largest state in the country.

Owners of Magic City Casino in Miami-Dade County and Bonita Springs Poker Room in Southwest Florida filed a lawsuit alleging that the sports-betting plan violated federal laws and would cause a “significant and potentially devastating” impact on their businesses.

The “hub-and-spoke” sports-betting plan was designed to allow gamblers throughout the state to place bets online, with the bets run through computer servers on tribal property. The compact said bets made anywhere in Florida “using a mobile app or other electronic device, shall be deemed to be exclusively conducted by the tribe.”

But U.S. District Judge Dabney Friedrich in November ruled that the plan ran afoul of the federal Indian Gaming Regulatory Act, which regulates gambling on tribal lands, because it allowed gambling off property owned by the Seminoles. She also invalidated other parts of the compact, finding that Interior Secretary Deb Haaland erred when she allowed the deal to go into effect last summer.

In Wednesday’s brief, lawyers for Haaland argued that Friedrich was wrong because the compact only authorized gambling on tribal lands and that the secretary was obligated to allow it to go into effect.

“The secretary has no duty — nor even any authority — to disapprove a compact that validly authorizes gaming on Indian lands simply because the compact also contemplates that the state will enact legislation permitting persons outside Indian lands to participate in that gaming,” lawyers for the U.S. Department of Justice, which represents Haaland and her agency, wrote in a 75-page brief.

In addition to giving the Seminoles control over sports betting, the compact allowed the tribe to offer craps and roulette at its casinos. Also, the Seminoles would be allowed to add three casinos on their property in Broward County.

In exchange, the tribe pledged to pay the state a minimum of $2.5 billion over the first five years and possibly billions more over three decades. The deal sought to add Florida to other states that have jumped into sports betting since a 2018 U.S. Supreme Court ruling that cleared the way for such wagering in New Jersey.

In a brief filed last year defending Haaland’s decision to allow the compact to go into effect, Justice Department lawyers argued that “provisions in the compact reflect a permissible hybrid approach wherein gaming activity that occurs off of the tribe’s Indian lands is authorized under state law, and gaming activity that occurs on Indian lands is authorized by IGRA (the Indian Gaming Regulatory Act) pursuant to the compact.”

But in Wednesday’s brief, the Biden administration shifted its arguments, focusing on its contention that Haaland’s scrutiny of the compact was restricted to activities authorized to take place on the Seminoles’ lands.

“The legality of any non-Indian land activities discussed in a compact is instead a matter of state law: If the courts ultimately decide that those activities are not authorized by state law, then those activities will not be permitted, regardless of what the compact contemplates,” Wednesday’s brief said.

Daniel Wallach, an attorney who specializes in gambling and other regulatory issues, told The News Service of Florida on Thursday that the federal government is advancing “specious” arguments that “falsely characterize” the record in the case.

Wallach said the compact “expressly authorized” online sports betting throughout the state and contended that the Biden administration has “undergone a metamorphosis” in arriving at its latest arguments.

“They’re making factual assertions about the compact that are belied by the plain language of the compact. It’s crystal clear that the compact authorizes online sports betting, and that activity is what constitutes a violation of IGRA (the Indian Gaming Regulatory Act),” he said.

In a separate brief filed late Wednesday, attorneys for the tribe argued that Friedrich erred by not allowing the tribe to intervene in the pari-mutuels’ legal challenge. The tribe, which sought to have the lawsuit dismissed, has cited a right to sovereign immunity that helps shield it from lawsuits.

Friedrich erred by not allowing the Seminoles to be a “necessary party” to the lawsuit and “failing to meaningfully consider the tribe’s immunity,” lawyers for the tribe argued.

The tribe “has a broad and particular interest in maintaining the 2021 compact, which is critical to the resolution of continuing discord between the tribe and pari-mutuel facilities, and to healing the long-standing rift between the tribe and the state,” the Seminoles’ attorneys wrote.

Supporters contended the sports-betting arrangement with the Seminoles would comply with a 2018 constitutional amendment that requires statewide voter approval of gambling expansions in Florida. Under what is known as Amendment 3, expansions of gambling must be placed on the statewide ballot through the citizens’ initiative process.

The Seminoles last fall briefly launched a mobile sports-betting app but scuttled the online bets after Friedrich’s ruling. Florida received $187.5 million from the deal between October 2021 and February 2022, but the tribe discontinued payments in March, according to the report by state economists.

1 Comment

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