Gaming compact between Florida and Seminole Tribe goes into effect; opponents file lawsuits in state and federal court

Florida entered into a gaming compact with the Seminole Tribe of Florida in April 2021 that gave the Tribe the exclusive ability to conduct sports betting in the state. Under the compact, the tribe may conduct sports betting and is required to share revenue with the state of Florida for the next 30 years, until 2051. The revenue sharing guarantee was set to be $2.5 billion over the first five years, with expected revenue for the state totaling $6 billion by 2030. Under the compact, sports betting was set to be available online and at pari-mutuel facilities to anyone in the state and would be “deemed at all times to be exclusively conducted by the tribe at its facilities” where the sportsbooks and servers are located. The compact was deemed approved, and the Department of the Interior Bureau of Indian Affairs published it in the Federal Register on August 11, 2021.

The Indian Gaming Regulatory Act (IGRA) passed by the United States Congress in 1988 allowed tribes to establish casino gambling on tribal land and permitted states to form compacts with tribes to regulate gaming. The IGRA requires that any gaming activities provided for through gaming compacts between Indian tribes and state governments occur only on Indian lands, defined as “all lands within the limits of any Indian reservation.” Florida’s 2021 compact with the Seminole Tribe contains a severability clause, providing that, “[i]f at any time the Tribe is not legally permitted to offer Sports Betting to Patrons physically located in the State but not on Indian lands,” then the rest of the compact would remain in effect, meaning sports betting would then be available only on tribal lands.

On July 2, 2021, West Flagler Associates (Magic City Casino) and Bonita Springs Poker Room filed a lawsuit in the United States District Court for the Northern District of Florida Tallahassee Division against Florida Governor Ron DeSantis (R), alleging that the compact would illegally allow online sports betting from any location in the state. In the lawsuit, plaintiffs wrote, “‘Deeming’ the bet to have been placed on Indian lands because the servers are located there contradicts decades of well-established precedent interpreting applicable federal law. Contrary to the legal fiction created by the 2021 Compact and Implementing Law, a bet is placed both where the bettor and the casino are each located.”

Following the approval of the compact, the casinos filed a second lawsuit in U.S. District Court for the District of Columbia against Interior Secretary Deb Haaland and the U.S. Department of the Interior. They alleged that approval of the compact violates federal laws including bank wire laws “by unlawfully permitting internet and bank wire transmission of transactions and payments relating to sports betting between the Tribe’s reservations and the rest of Florida, where sports betting is otherwise illegal.” They also argued that the compact violated the Fifth Amendment equal protection clause by allowing the Seminole Tribe to conduct online sports gambling in Florida although it would be illegal for anyone else to do so.

No Casinos, Inc., which supported Amendment 3 of 2018, also said it would file a lawsuit to block the compact from taking effect. Amendment 3, approved by a vote of 71.47% to 28.53%, made the citizen initiative process “the exclusive method of authorizing casino gambling,” meaning the Florida State Legislature is not permitted to authorize casino gambling through statute or through referring a constitutional amendment to the ballot. Amendment 3 included a provision stating that the amendment does not “limit the ability of the state or Native American tribes to negotiate gaming compacts pursuant to the Federal Indian Gaming Regulatory Act for the conduct of casino gambling on tribal lands, or to affect any existing gambling on tribal lands pursuant to compacts executed by the state and Native American tribes pursuant to IGRA.” No Casinos President John Sowinski said, “This compact violates multiple Federal laws as well as the Florida Constitution. The 2018 constitutional mandate of 72% of Florida voters could not be clearer. Only Florida voters, not politicians in Tallahassee or Washington, have the power to expand gambling in Florida.”

Bryan Newland, principal deputy assistant secretary of the U.S. Department of Interior for Indian Affairs, said, “After thorough review under IGRA, we have taken no action to approve or disapprove the Compact … the Compact is considered to have been approved by operation of law to the extent that it complies with IGRA and existing Federal law.” Newland also said, “IGRA should not be an impediment to tribes that seek to modernize their gaming offerings, and this jurisdictional agreement aligns with the policy goals of IGRA to promote tribal economic development while ensuring regulatory control of Indian gaming. The Department will not read restrictions into IGRA that do not exist.”

Gov. DeSantis said, “The final approval of this historic gaming compact is a big deal for the State of Florida. This mutually-beneficial agreement will grow our economy, expand tourism and recreation and provide billions in new revenue to benefit Floridians.” DeSantis also said he believes the compact is in compliance with constitutional requirements under Amendment 3 of 2018.

Seminole Tribe of Florida Chairman Marcellus Osceola Jr. said, “Today is a great day for the people of Florida, who will benefit not only from a $2.5 billion revenue sharing guarantee over five years, but also from statewide sports betting and new casino games that will roll out this fall and mean more jobs for Floridians and more money invested in this state.”

Florida Education Champions, sponsors of an initiative to allow other entities, aside from the Seminole Tribe, to conduct sports betting in Florida, have raised $20 million from DraftKings and FanDuel in an attempt to qualify the initiative for the November 2022 ballot. The measure would authorize sports betting at sports venues, pari-mutuel facilities, and online in Florida. The Florida State Legislature would need to pass legislation to implement the constitutional amendment such as providing for licensing, regulation, consumer protection, and taxation. Under the amendment, all online sports betting tax revenue would be dedicated to the Educational Enhancement Trust Fund of the Department of Education. Online sports betting could be conducted by (a) Native American tribes and (b) entities that have existed for at least one year and that have conducted sports betting in at least 10 other states under the amendment. Such entities could begin conducting sports betting no later than eight months after the amendment is effective. Other entities or organizations could conduct sports betting no sooner than 20 months after the amendment is effective if authorized by state law. As of August 19, 2021, the Florida Division of Elections reported that 685 valid signatures had been submitted for Florida Education Champions’ initiative.

Seminole Gaming launched their own PAC, Voters in Control, and provided $10 million to it to support the compact and oppose the initiative sponsored by Florida Education Champions.

Additionally, Florida Voters in Charge sponsored an initiative concerning casino gaming expansion in Florida. The group filed two versions: #21-15 and #21-16. The initiative would expand casino gaming in Florida and define casino gaming. Version #21-15 would limit new casinos to 100 miles from a Seminole tribal casino and version #21-16 would limit new casinos to 130 miles from a Seminole tribal casino. A spokesperson for the committee said “both of these ballot initiatives are options we are exploring,” and the committee “will make a decision on which option we will begin gathering signatures for soon.” Currently, 110 valid signatures have been submitted for version #21-16. Gary Bitner, spokesperson for the Seminole Indian Tribe, said, “Unlike the proposed sports betting ballot initiative, neither of these initiatives would interfere with the new gaming compact, nor would they impact the $2.5 billion revenue-sharing guarantee for the state of Florida over the compact’s first five years.”

Ballotpedia identified four committees registered to support and/or oppose gambling-related initiatives (#21-13, #21-14, and #21-15) targeting the 2022 ballot in Florida. In total, the four committees reported receiving donations of $62,069,547.80.

Proposed measures are reviewed by the state attorney general and state supreme court after proponents collect 25% of the required signatures across the state in each of one-half of the state’s congressional districts (222,898 signatures for 2022 ballot measures). After these preliminary signatures have been collected, the secretary of state must submit the proposal to the Florida Attorney General and the Financial Impact Estimating Conference (FIEC). The attorney general is required to petition the Florida Supreme Court for an advisory opinion on the measure’s compliance with the single-subject rule, the appropriateness of the title and summary, and whether or not the measure “is facially valid under the United States Constitution.” To qualify for the ballot, sponsors must submit 891,589 valid signatures, which must be verified by election officials by February 1, 2022. Signatures equaling at least 8% of the district-wide vote in the last presidential election must be collected from at least half (14) of the state’s 27 congressional districts.

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