Florida sports betting took a major step toward coming out of the shadows and on to the sunny side of the street Friday.
Gov. Ron DeSantis signed a compact agreement with the Seminole Tribe that includes retail and online sports wagering.
“This historic compact expands economic opportunity, tourism, and recreation, and bolsters the fiscal success of our state in one fell swoop for the benefit of all Floridians and Seminoles alike,” Gov. DeSantis said in a statement. “Our agreement establishes the framework to generate billions in new revenue and untold waves of positive economic impact.”
The 30-year compact guarantees at least $2.5 billion in revenue-sharing from gaming to the state over the first five years. DeSantis estimates it brings $6 billion in additional revenue to the state through 2030.
With a population of 21 million, Florida would become the largest US state to legalize sports betting.
Work remains to be done on the legislative side. With the regular session set to conclude in one week, Senate President Walton Simpson announced that he and House Speaker Chris Sprowls agreed to convene a special session the week of May 17 to address the compact.
Details of Florida gaming compact
Florida and the Seminole have needed a new gaming compact since 2016, when a US District Court ruled that the state breached tribal exclusivity of a previous 20-year compact signed in 2010.
In 2019, the Seminole stopped making gaming payments to the state that totaled about $350 million annually.
DeSantis, who took office in 2019, began negotiating in earnest with the Seminole four months ago.
Highlights of the compact include:
- Statewide online sports betting in partnership with pari-mutuels.
- Craps and roulette added as permissible games at tribal casinos.
- Continued discussions on online casino gaming. For 36 months following the effective date of the compact, the parties may amend the compact to authorize the tribe to casino games online and via mobile devices.
- Tribes are required to partner with pari-mutuel facilities, allowing them to access the Tribe’s wagering platform using their own brand. The tribes then pays no less than 60% of the revenue from bets placed through the pari-mutuels.
- Allows the Seminole to build three more casinos on its Hollywood Reservation. The tribe currently operates seven casinos.
- Legalizes fantasy sports contests.
- Provides significant concessions to racetracks and cardrooms in Florida. These include operation of slot machines at eight pari-mutuel facilities in Broward and Miami-Dade counties, historical horse racing machines, and electronic bingo card minders at all other pari-mutuel facilities.
- The Seminole would no longer consider it a violation of its exclusivity for pari-mutuels to operate designated-player card games. This has been the major point of contention between gaming industry parties in the state for the past decade.
Revenue breakdown in Florida gaming compact
The new gaming compact marks a significant increase in tribal gaming payments to the state.
In no year may the Seminole share less than $400 million with the state. The contributions must reach $1.5 billion in the first three years and $2.5 billion in the first five.
Here’s a breakdown of what the tribe pays to the state:
- For revenue on slot machines, craps, roulette, raffles, and drawings: 12% on revenues up to $2 billion, 17.5% on revenues between $2 billion and $2.5 billion, 20% on revenue between $2.5 billion and $3 billion, 22.5% on revenue between $3 billion and $3.5 billion, 25% on revenue greater than $3.5 billion of net win.
- On table games: 15% of revenues up to $1 billion, 17.5% on revenues between $1 billion and $1.5 billion, 22.5% on revenues between $1.5 billion and $2 billion, 25% on revenues greater than $2 billion.
- From sports wagering: 13.75% on net win for wagers made directly through the Tribe’s wagering platform, 10% on net win for wagers made via software using a brand of a pari-mutuel.
- The tribe also agrees to make an annual $250,000 donation to the Florida Council on Compulsive Gaming.
- A pandemic clause allows for a reduction on the minimum contribution requirements if an act of god disrupts operations.
Legislative approval likely but not certain
In order to take effect, the new compact must be ratified by the legislature. Given that the majority leadership of each chamber and the governor are all Republicans, that seems likely. But it’s not a given.
In 2015, then-Gov. Rick Scott worked out a compact with the Seminole that would have avoided the lost revenue in recent years. However, the legislature refused to ratify it.
In his statement, Simpson made his case for the legislature’s cooperation:
“Gaming, in one form or another, is a voter-approved legacy industry in our state that has
contributed billions of dollars to our economy for education, health care and infrastructure, while providing hundreds of thousands of jobs to Floridians over the course of nearly 100 years. In my view, we have a responsibility to update our laws to reflect current realities of this heavily-regulated industry and to ensure those laws are properly enforced.”
Sprowls also lauded the compact:
“For years, there has been much ambiguity around the compact with the Seminole Tribe of Florida. Today, we thank Governor Ron DeSantis for bringing that to a conclusion and for giving us the opportunity to address this key issue for our state. Thank you also for the work of (Seminole) Chairman Marcellus Osceola Jr. and the contributions of Senate President Simpson. We look forward to reviewing the compact in an upcoming Special Session.”
Legal challenges could delay/derail sports betting
After receiving legislative approval, the compact would head to the Bureau of Indian Gaming.
New US Department of Interior Secretary Deb Haaland is the first Native American to hold the position.
However, the Bureau has never received a compact like this. The compact approves a tribe offering off-reservation gaming. In Michigan, for tribes to conduct statewide online sports betting, they entered commercial agreements with the state.
Daniel Wallach, a sports gaming law attorney based in Florida, calls question to the compact’s compliance with the Indian Gaming Regulatory Act. The issue is how the compact allows wagers to be physically placed off Indian lands and processed through servers located on Indian lands.
From the compact:
The Tribe and State agree that the Tribe is authorized to operated Covered Games on its Indiana lands, as defined in the Indian Gaming Regulatory Act, in accordance with the provisions of this Compact. Subject to limitations set forth herein, wagers on sports betting and fantasy sports contests made by players physically located within the State using a mobile or other electronic device shall be deemed to take place exclusively where received at the location of the server or other devices used to conduct such wagering activity at a facility on Indian lands.
Also, in 2018, Florida voters approved a constitutional amendment requiring voters, not the legislature, to decide gambling expansions. Already, a group called No Casinos vows to challenge the compact in court.