Court Of Appeals Upholds Florida Gaming Compact With Seminoles

On Friday, the DC Circuit Court of Appeals ruled for Florida’s 2021 tribal-state gaming compact, vacating a District Court’s decision that the compact violated the Indian Gaming Regulatory Act.

West Flagler Associates and its various gaming entities sued to block the compact in August 2021. The three-judge Court of Appeals panel heard oral arguments in January from West Flagler Associates and defendant US Department of Interior and Secretary Deb Haaland.

The Circuit Court ruling should allow the Seminole Tribe to restart accepting online sports betting in Florida through the tribe’s Hard Rock Bet app. The app was up and running for one month in 2021 before an initial ruling in November 2021 by U.S. District Court judge Dabney Friedrich stopped wagering.

“Whether it is otherwise lawful for a patron to place bets from non-tribal land within Florida may be a question for that State’s courts, but it is not the subject of this litigation and not for us to decide,” Court of Appeals Circuit Judge Robert Wilkins wrote in Friday’s ruling. “Today, we hold only that the Secretary did not violate the Administrative Procedure Act (“APA”) in choosing not to act and thereby allowing the Compact to go into effect by operation of law.”

Florida gambling law experts believe the case will be appealed to the U.S. Supreme Court.

“The Seminole Tribe of Florida is pleased with today’s unanimous decision. It is a positive outcome for the Seminole Tribe and the people of Florida, and for all of Indian Country,” Seminole Tribe spokesperson Gary Bitner said. “The Tribe is fully reviewing the decision to determine its next steps.”

Possible next steps in the case

For sports betting to restart in Florida, the Circuit Court has to issue a final mandate on the case. This is a simple single-sentence order that could take no time. West Flagler Associates could also request a rehearing en banc, a plea for a panel to reconsider the case. The plaintiff could also appeal the judgment to the Supreme Court.

Florida sports betting lawyer Daniel Wallach said en banc hearings at the Circuit Court are rare, and it’s unknown whether SCOTUS would take up the decision.

West Flagler Associates could not be reached for comment Friday.

When will Florida sports betting resume?

It’s uncertain when online sports betting will relaunch on the Hard Rock Bet app.

Bob Jarvis, a law professor at Nova Southeastern University in Fort Lauderdale, thinks it will happen soon.

“I expect the Seminoles to relaunch their app, and start taking in-person bets, in the next month or so and certainly before the start of the new NFL season,” Jarvis told PlayFL. “This is a great victory for the Seminoles, other tribes with gambling operations, and sports fans who like to bet.”

pic.twitter.com/cyDmOd4hBX

— Hard Rock Bet (@HardRockBet) June 30, 2023

How did we get here with online sports gambling in Florida?

In 2010, Florida and the Seminoles entered into a compact gave the tribe the exclusive right to offer banked card games in Florida. In return, the Seminoles shared in excess of $300 million in annual gaming revenues with the state.

However, pari-mutuels began using a “designated player” system to offer traditionally banked card games.

In 2016, a US District Court judge ruled this violated the compact. Given the breach of 2010 compact by pari-mutuels, the Seminoles stopped revenue payments to the state in 2019 “until the illegal banked card game issue is resolved,” according to a letter to Gov. Ron DeSantis that year. State officials began the process to work on a new deal with the Seminoles after the stand-off.

The Legislature and DeSantis eventually worked out state guarantees on revenue and the percentages of sports betting revenue split between the pari-mutuels and tribe. DeSantis signed the compact in April 2021 and the Legislature approved it in May 2021.

Florida-Legislature-2021-Gaming-Compact — Florida House speaker Chris Sprowls, R-Palm Harbor, applauds the passage of Seminole gambling compact bill during a special session in 2021. (AP Photo/Steve Cannon)

Key details of 2021 Seminole gaming compact

Statewide online sports betting takes place through a hub-and-spoke model with servers on tribal lands.
Tribal casinos can offer craps and roulette.
For sports betting, the tribe must partner with at least three pari-mutuel facilities, allowing them to access the Tribe’s wagering platform using their own brand. Pari-mutuels get no less than 60% of the revenue from bets placed through their skins.
The Seminoles give the state 13.75% on net win for sports wagers made directly through the tribe’s platform and 10% on net win for wagers made via software using a brand of a pari-mutuel.
Allows the Seminoles to build three more casinos on its Hollywood Reservation. The tribe currently operates seven casinos.
The Seminoles drop their opposition of pari-mutuels operating designated-player card games.
A pandemic clause allows for a reduction on the minimum contribution requirements if an act of god disrupts operations.

What are the arguments in West Flagler’s lawsuit?

The lawsuit provided two reasons the online betting provisions of the compact must be set aside:

The compact unlawfully permits the tribe to operate gaming outside of its own reservations, which is not permitted by the Indian Gaming Regulatory Act.
If wagers are not legal off tribal lands, permitting internet and bank wire transmission of transactions and payments related to sports betting from the tribe’s reservations to the rest of Florida violates the Unlawful Internet Gambling Enforcement Act and The Wire Act.