There have been updates to the federal regulations on Indian gaming compacts that could affect Florida’s chances of adding online casinos.
The most notable change is that the Bureau of Indian Affairs will now approve gaming compacts, including online wagering outside of tribal lands.
That means the federal government recognizes Florida’s hub-and-spoke model for online sports betting as an acceptable method for Class III gaming compacts. These changes went into effect on March 22.
After failed legal challenge, agency approves hub-and-spoke model
In 2021, Gov. Ron DeSantis and the Seminole Tribe agreed to the 2021 Florida gaming compact. As part of the deal, the state gave the tribe exclusivity over a Florida online sports betting market.
But the ownership group of two Florida pari-mutuel facilities filed federal and state-level lawsuits over the agreement. West Flagler Associates argued the compact violated federal standards. Gamblers can’t place bets with a tribal entity when they aren’t on tribal land.
In response, the Seminoles argued that the servers were on tribal property. Thus, bettors placed the wagers on tribal land. This became known as the hub-and-spoke model.
In November 2021, a federal judge agreed with West Flagler. U.S. District Court Judge Dabney Friedrich said that the model violated the Indian Gaming Regulatory Act. But the Seminole Tribe and the Federal Government appealed the ruling. Last summer, the D.C. Court of Appeals overturned Friedrich’s decision.
Now, the Bureau of Indian Affairs updated the federal regulations and approved the hub-and-spoke model.
This solidifies the idea that online gambling can be operated statewide by the tribe. For now, that’s just sports betting, but the next compact could allow Florida online casions and these rules could safeguard it from legal challenges.
On the surface, this seems like a huge win for the Seminoles, but there are some stipulations that could also make the process more difficult.
Adding iGaming would require an implementing bill
The 2021 gaming compact between the Seminole Tribe and Florida allowed for the state to expand gaming without a constitutional referendum. That will not be the case if Florida attempts to add iGaming to its suite of tribal gaming options.
Included in the updated compact regulations is the requirement of an “implementing bill” that must be passed for the gaming compact to be approved if it includes the hub-and-spoke model.
That means a gaming compact cannot on its own claim that a bet exists where the servers are located. Others might claim a bet exists on the mobile device where the bet was placed, which could be outside of tribal lands. To clear up how that is interpreted legally, lawmakers must pass the implementing bill.
That is an important wrench in the gears of adding online casinos to the Sunshine State. Florida is not itching to pass legislation related to expanded gaming, and the requirement of an implementation bill is an unknown quantity. Could that disrupt iGaming progression?
Professor says Florida made up of 3 distinctive regions
According to Bob Jarvis, a law professor at Nova Southeastern University in Fort Lauderdale, lawmakers are easier to understand when split up into three sections: North, Central and South Florida.
South Florida is very much in favor of expanded gaming options and would almost certainly vote that way, but North Florida and Central Florida are unlikely to favor gambling expansion.
Jarvis outlined why this is the case for PlayFL.
“There is no way you’re getting 60% of Florida’s voters to vote for gambling because the entire northern third of the state is against gambling of any sort for religious reasons. North Florida is really South Georgia. They are just religiously against it. And the middle third of Florida always asks, ‘Is this good or bad for Disney? Because we live and die with those theme parks.’ Well, this isn’t good for Disney. This isn’t good for the theme parks.”
It is unlikely that Central Florida lawmakers will budge on gaming because, as Jarvis outlined, they are intrinsically tied to Disney, which claims gambling goes against its family-friendly focus.
Despite the extreme hesitancy of their constituents on gaming, North Florida lawmakers surprisingly did not protest the current gaming compact with the Seminole Tribe. That means North Florida lawmakers could once again look the other way on online casinos.
North Florida lawmakers have operated this way instead of trying to obstruct legalization in part because they receive the benefits of legal gaming without participating. There are no retail gaming establishments in its neighborhoods. The most northern Florida casino is in Tampa.
Additionally, North Florida lawmakers can be champions of keeping Florida gaming homegrown. These aren’t massive gambling operators with a global footprint like DraftKings, Las Vegas Sands, MGM or other titans of industry.
This could mark the end of West Flagler appeal
Even though West Flagler fought the compact in multiple courtrooms, it doesn’t appear like it’s going to end any time soon. That battle currently sits on the docket of the US Supreme Court.
West Flagler claims that the hub-and-spoke approach is a way to get around the state constitution. It should be illegal, they argue in their petition.
“As different jurisdictions make different decisions regarding the legality of sports betting, it is critical that this Court not allow the unlawful approach taken by Florida to become a model, or for the D.C. Circuit decision to create confusing and misleading precedent.”
West Flagler’s efforts appear to be in vain, especially after the new federal gaming compact regulations have approved the hub-and-spoke model. The Supreme Court hasn’t dismissed the case, but the new rules could be the final nail in the coffin for West Flagler’s lawsuit.
Jarvis feels the Supreme Court will eventually affirm the legality of this model.
“The case presents no issue of interest to the Court. There is no national need for a ruling by the Court. And the Court, if it were to take this case, would simply affirm the D.C. Circuit Court of Appeals.”
