Judge tosses lawsuit challenging Seminole Compact

by | Oct 19, 2021

TALLAHASSEE — Dealing a win to Governor Ron DeSantis and the Seminole Tribe, a federal judge on Monday dismissed a lawsuit challenging a gambling agreement that allows the tribe to have control over sports betting in Florida.

Owners of the pari-mutuels Magic City Casino in Miami-Dade County and Bonita Springs Poker Room in Southwest Florida filed the lawsuit in July, after lawmakers approved the wide-ranging gambling deal between the state and the tribe.

Part of the deal, known as a compact, calls for the tribe to operate sports betting, with gamblers throughout the state able to place bets online. The pari-mutuels contend that allowing people to place sports bets while off tribal property will violate federal laws. They also maintain that online sports betting controlled by the tribe will “cannibalize” their customer bases and cause the pari-mutuels to lose money.

Attorneys for DeSantis and state Department of Business and Professional Regulation Secretary Julie Brown asked U.S. District Judge Allen Winsor to dismiss the lawsuit, arguing the pari-mutuels did not have legal standing to challenge the compact because they had not shown they will be harmed.

In a 20-page ruling Monday, Winsor, who wryly noted that the pari-mutuels “are not pleased with the compact,” agreed with the state’s arguments.

“The pari-mutuels lack standing to sue the governor or the secretary because their actions are not fairly traceable to any alleged harm. In addition, the requested declaratory and injunctive relief would provide no legal or practical redress to the pari-mutuels’ injuries,” Winsor wrote.

Much of Winsor’s ruling focused on two requirements to demonstrate standing in the lawsuit. Under federal law, the pari-mutuels had to allege facts to demonstrate an “injury in fact” that is “fairly traceable to the challenged action of the defendant” and is “likely to be redressed by a favorable decision.”

But Winsor found the pari-mutuels’ injuries were not traceable to Brown’s actions “because the secretary’s oversight role cannot affect the tribe’s rights to offer online sports gambling.” He added that Brown’s “general oversight authority under the compact … does not give her authority to regulate the tribe’s conduct.”

None of the secretary’s duties under the compact enable the tribe to offer online sports betting, Winsor noted.

“At the end of the day, the pari-mutuels are not harmed by the secretary’s ability to monitor the tribe’s casinos or submit audit reports to the state,” he wrote.

The plaintiffs did not show that their potential injuries were traceable to the governor either, Winsor found.

“It is the compact itself that authorizes the third-party conduct the pari-mutuels want to prevent,” he wrote.

Winsor also said the plaintiffs failed to show that a judgment in their favor would remedy the potential harms they allege will occur.

“They argue that a declaratory judgment would have a cascading effect: a declaration against the state officials that the online sports-betting provisions are illegal would ‘sever’ those provisions from the compact ‘automatically,’ which would then prohibit the tribe from offering online sports betting, which would in turn prevent the pari-mutuels’ impending economic harm,” Winsor wrote.

The plaintiffs also argued that a declaratory judgment would bind the secretary of the Department of Business and Professional Regulation to find online sports betting by the tribe noncompliant with the compact, Winsor noted.

“Neither of the pari-mutuels’ contentions is correct,” the judge concluded.

Even if a declaration against the governor would bind the state, “it would not bind the tribe, which would have no obligation to recognize any declaration’s legal effect,” Winsor wrote.

“Thus, after a declaratory judgment, the tribe could continue business as usual — to the pari-mutuels’ continued detriment,” he added.

The pari-mutuel operators also failed to show that an injunction would redress their alleged injuries, the judge wrote.

“Now that the die is cast, it is not clear what the governor has to do with ‘implementing’ the sports betting provisions. So there is no indication that an injunction against the governor would ‘significantly increase the likelihood’ that the pari-mutuels would obtain relief, ‘whether directly or indirectly,’” the judge wrote.

DeSantis and tribal leaders reached the deal in April, with lawmakers ratifying it in May during a special legislative session.

Under it, a “hub-and-spoke” sports betting plan will allow gamblers throughout the state to place bets online, with the bets run through computer servers on tribal property. The compact says bets made anywhere in Florida “using a mobile app or other electronic device, shall be deemed to be exclusively conducted by the tribe.” The tribe is ultimately expected to pay billions of dollars to the state because of sports betting and other parts of the compact.

The compact allowed the tribe to offer online sports betting beginning Friday, but the Seminoles haven’t launched the operation. It’s unclear when sports betting will be available to Florida gamblers, but the tribe hailed Winsor’s ruling.

“This is an important first legal victory for the state of Florida and the Seminole Tribe and we look forward to future legal decisions in our favor,” Gary Bitner, a spokesman for the tribe, said in an email Monday evening.

The legal challenge tossed by Winsor on Monday was one of three federal lawsuits challenging the compact. The Havenick family has owned the pari-mutuel facilities in the Florida case for more than five decades. It also filed a lawsuit in Washington, D.C., naming the U.S. Department of the Interior and Interior Secretary Deb Haaland as defendants.

The Interior Department oversees Indian gambling issues and allowed the compact to go into effect without taking any action this summer. Lawyers for Haaland and her agency last week filed a motion asking a judge to reject the Washington lawsuit.

Two prominent South Florida businessmen and the anti-gambling organization No Casinos have filed a separate lawsuit in Washington, D.C.


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