U.S. Department of the Interior files intent to appeal Seminole Gaming Compact shutdown

by | Jan 21, 2022


 

The U.S. Department of the Interior, which oversees tribal gambling, filed a notice stating its intent to appeal the November ruling that struck down the Seminole Gaming Compact, ending the current status of legal sports betting in Florida. The compact would grant the Seminoles control over online sports betting throughout the state and allow the tribe to add craps and roulette to its existing casino operations.

The initial ruling, made by Judge Dabney Friedrich, was largely predicated on the precise location of where bets would be placed. The compact was formed under a ‘hub-and-spoke’ system that allowed sports bets to be placed from anywhere in the state as long as the bet is processed on servers housed on Seminole land. Friedrich pointed out that previous court rulings held that the human activity required to place a bet had more relevance than the administrative functions of receiving the bet on the jurisdiction of where such betting activity was actually taking place.

U.S. Department of the Interior Secretary Deb Haaland, on behalf of the Seminole Tribe, emphasized the Compact’s provision that online bets were deemed to take place only in the location where a bet was received by the Tribe’s computer servers located on Seminole lands.

Friedrich, however, dismissed the implementation of the hub-and-spoke system, writing that the compact violated the Indian Gaming Regulatory Act (IGRA) and its condition limiting tribal gaming to the confines of tribal lands. The original lawsuit against the compact was first filed by West Flagler Associates on behalf of the Magic City Casino and Bonita Springs Poker Room.

“Although the Compact “deems” all sports betting to occur at the location of the Tribe’s “sportsbooks” and supporting servers,” Friedrich ruled. “This Court cannot accept that fiction.”

While federal regulators approved the Compact, it was met with a litany of legal challenges and opposition, including challenges from No Casinos, a group that successfully passed a constitutional amendment restricting new gaming expansions in the state without voter approval. Other casino operators in the state have also argued that their business would be harmed by what amounted to a statewide expansion of gaming, in direct violation of that constitutional amendment.

The 30-year gaming compact allowed the Seminoles exclusive rights to online sports betting in Florida, as well as expanded gaming privileges, in exchange for at least $2.5 billion over the first five years.

Friedrich opined that the only way sports betting could garner legal footing within the state outside of tribal lands is through citizen initiative.

Two betting conglomerates — DraftKings and FanDuel — have made efforts to place their own sports betting initiatives on 2022 ballots, forming the group Florida Education Champions (FEC) and pouring millions of dollars into an effort to acquire the necessary 900,000 petition signatures to qualify for the ballot. If successful, FEC’s ballot measure would authorize sports betting throughout the state and set aside hundreds of millions of dollars in gaming revenue in the Florida Education Enhancement Trust Fund.

Christina Johnson, a spokesperson for the group, emphasized that November’s federal court ruling had no impact on their own effort. The group says it has well over half a million signatures already collected and has navigated through various stages of the state’s validation process.

“Our effort was always mutually exclusive from the compact,” Johnson said. “Florida Education Champions’ focus remains in securing the nearly 900,000 valid petitions to make the November 2022 ballot.”

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