A Look At The Arguments In The First Filings Of Florida Sports Betting Lawsuit

Written By Steve Schult on August 23, 2022
Florida sports betting lawsuit filings

Last year, it looked like Florida sports betting was an inevitability. Now, its existence depends on an appeals court ruling.

Gov. Ron DeSantis and the Seminole Tribe agreed to a new 30-year gaming compact. The agreement would allow for online and retail sports betting in the Sunshine State and other expansions.

The legislature and the Department of the Interior both approved the deal in the following months. However, the ownership group of pari-mutuels filed a lawsuit over the Florida sports betting provisions.

Floridians tasted legal betting for a few weeks when the Seminole Tribe launched its Hard Rock online sportsbook in November. But just a few weeks later, a U.S. District Court judge ruled in favor of the pari-mutuels.

Just like that, Judge Dabney Friedrich invalidated the Florida compact and forced the tribe to shutter its online sportsbook. But the tribe and the DOI appealed the ruling.

About nine months later, there is finally movement in the appeals case. Last week, both the tribe and the DOI filed the first briefs in the appeals process. Here’s a look at what was in them.

The Seminole Tribe just wants to be included

The Seminole Tribe was the major beneficiary of the new compact. After all, the ‘hub-and-spoke’ model used for the state’s sports betting industry gave the Seminoles a virtual monopoly on the market.

The Seminole Tribe wasn’t listed as a defendant in the lawsuit. But they wish they were.

When West Flagler Associates, the ownership group of Magic City Casino and Bonita Springs Poker Room, filed the initial complaint with the District Court, DOI Secretary Deb Haaland was the listed defendant.

Haaland was the person who technically approved the compact. As a result, West Flagler sued over her decision to allow the compact to become law of the land. As far as the lawsuit was concerned, the tribe was an afterthought.

Since the Seminoles weren’t on the initial suit, they aren’t technically on the appeal either. But they’re trying to change that.

Their filing presented their case on why they are a relevant party. The District Court denied the tribe’s motion for limited intervention, which is the decision they are appealing.

By gaining inclusion, the Seminoles can claim immunity

In their filing, the Seminole Tribe laid out three main issues:

  • Whether the District Court erred by denying the tribe a motion for intervention, even though it’s a party of the compact.
  • If the court erred in failing to afford the tribe an opportunity to defend its sovereign immunity.
  • Whether the court made a mistake in denying the tribe intervention.

Even though they had three bullet points, it essentially comes down to two main points. The Seminoles outlined both in its “summary of argument.”

They believe they should’ve been allowed to intervene in the case and if that’s the case, the case should be dismissed because they are a sovereign nation and can’t be sued.

While making their case, the Seminoles used several previous court rulings to show that sovereign immunity was paramount to other legal precedents in legal proceedings with Tribal nations.

They argued that West Flagler’s claim they weren’t a relevant party is completely false.

“This finding is demonstrably incorrect and completely ignores the U.S. Supreme Court’s response to materially similar facts in [Republic of Philippines v. Pimentel], this case does not resolve ownership of any asset to which the Tribe has a ‘nonfrivolous substantive claim,’ which would indirectly violate the Tribe’s immunity. To the contrary, this case clearly involves a nonfrivolous claim regarding the substantive rights of the Tribe.”

Tribe cites IGRA to help their case

When Friedrich struck down the 2021 Florida gaming compact last November, she cited the Indian Gaming Regulatory Act as the main reason.

Friedrich said the IGRA dictates that all gambling done with the tribe must be done on tribal property. However, the ‘hub-and-spoke’ sports betting model would allow bettors from all over the state to place bets with the Seminoles’ online sportsbook. In response, it was argued that since the servers were on tribal land, the model was still in compliance.

But as part of its “factual background” section, the tribe said the IGRA was supposed to act as legislation that would benefit the tribes. In Friedrich’s ruling, the IGRA was hurting a tribal nation.

They went on to cite the pari-mutuels’ encroachment on the previous compact.

The 2010 agreement only allowed the Seminole Tribe to spread house-backed card games. But just a few years later, the pari-mutuels began spreading similar games.

The Seminole legal team used the section to help paint the tribe in a favorable light. For example, under the compact, pari-mutuels with retail sportsbooks must pay the Seminole Tribe 40% of gross revenue. The tribe’s legal team described it like this:

“The 2021 Compact and new State gaming laws were designed to bring peace and prosperity to Florida’s gaming industry, with online sports betting as the keystone of the agreement. The 2021 Compact required the Tribe to contract with all requesting qualified pari-mutuel facilities, whereby they would be paid to market all the Tribe’s sports betting.”

The Tribe’s interests weren’t properly represented

One of the more minor points in the brief was that the DOI was arguing about its decision to approve the deal. Thus, the government didn’t do a sufficient job representing the interests of the tribe.

That point seemed like it should’ve had more attention in the 86-page filing. But it was almost an afterthought near the end of the brief.

A look at the Department of the Interior brief

The DOI’s briefing was drastically different than the Tribe’s because they must argue the District Court ruling. They need to show how Friedrich’s ruling was incorrect from the beginning, or how the agency didn’t make a mistake in validating the compact.

The ruling was unrelated to West Flagler’s central argument

Firstly, the DOI claims that Judge Friedrich’s ruling had nothing to do with West Flagler’s complaints. They said that West Flagler’s initial argument was that Haaland shouldn’t have approved the compact because it violated federal law. Not the IGRA.

“West Flagler argued below that the Secretary had a separate duty to disapprove the Compact because the compact violates federal laws other than IGRA. But IGRA does not oblige the Secretary to evaluate a compact’s compliance with the entire universe of potentially relevant federal laws within 45 days of submission.”

The government doubled down on that claim in their “statement of issues.” They identified two main issues.

Firstly, they questioned the District Court because the IGRA only authorizes gaming on tribal land. But the compact also dealt with non-tribal gaming as well.

Their second point had two sub-arguments within it. They said the IGRA “imposes no duty on the Secretary to disapprove the pact within 45 days on any ground except that the compact violates IGRA itself. Additionally, they said the compact was consistent with non-IGRA federal law.

DOI says the District Court has no authority to overturn the compact

One of the first cases the DOI listed to cite their case was Michigan v. Bay Mills Indian Community. It was a 2014 ruling that reaffirmed the premise that “Indian tribes are domestic dependent nations that exercise sovereign authority.”

The case examined whether a federal court has jurisdiction over activity on tribal land that violates the IGRA. A 5-4 Supreme Court decision ruled that the State of Michigan had no right to do so.

The case does poke holes in the District Court ruling. However, it’s puzzling that the legal team didn’t include the jurisdiction issue in its “Statement of Issues.”

Secretary Haaland’s power is limited in scope

Haaland didn’t really approve or disapprove the deal. Instead, she just let the 45-day timeframe expire without a clear decision.

As a result, the Florida gaming compact became law. But it is only law to the extent that the compact already follows existing regulations. Therefore, the agency claims she didn’t approve any illegal portions of the compact.

Furthermore, the government said that she can only negate compacts when at least one of three factors is in play: The compact violates the IGRA, any other provision of federal law, or the trust obligations of the country to the tribes.

They argue none of those three things are taking place in this case. Thus, inaction was her only option.

The government used a technicality within the law to argue that the compact complied with the IGRA.

“[The] IGRA places conditions on Class III gaming ‘on Indian Lands.’ It does not place conditions on many of the directly related subjects a state and tribe may elect to discuss in a compact. To the extent IGRA does not govern those subjects, agreements on those subjects cannot violate IGRA.”

Next scheduled briefings

The federal government must file an answering brief by Oct. 3 and West Flagler has until Oct. 6 to file a response of its own.

All the paperwork will be in the court’s hands by Nov. 14. Parties can then present oral arguments if the court deems them necessary.

Several legal experts said they don’t expect a final decision until early-2023.

Photo by Shutterstock / Puckpao
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Written by
Steve Schult

As Managing Editor of PlayFL, Steve will stay on top of all things related to the Florida gaming industry. He is also a veteran of the gambling world. The native New Yorker started covering high-stakes tournaments in 2009 for some of poker's most prominent media outlets before adding the broader U.S. gaming market to his beat in 2018.

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