Florida Senator Believes Gaming Compact Loses Legal Battle

Written By Steve Schult on July 15, 2022 - Last Updated on November 3, 2022
FL Sen thinks gaming compact fails in court

Sen. Jeff Brandes was one of the first Florida politicians to advocate for legal sports betting. The Republican representing St. Petersburg was the first legislator to submit sports betting bills, which he filed in 2019 and 2020.

But both of his attempts were unsuccessful. Neither sports betting proposal was even up for a vote.

Last year, Gov. Ron DeSantis negotiated a new, 30-year gaming compact with the Seminole Tribe. After the deal was approved by the legislature, sports betting was temporarily legalized.

The agreement essentially gave the tribe a monopoly on sports betting. The provision led to a federal lawsuit from the ownership group of two pari-mutuel facilities. And ultimately, the vacating of the compact by a federal judge.

However, just because Brandes was one of the pioneers of the potential Florida sports betting market didn’t mean he was in favor of the tribe getting exclusive rights over the industry. He was the only senator to vote against the new gaming compact.

It’s currently going through what is expected to be a lengthy appeals process. But in Brandes’ eyes, there’s very little chance that the appellate court overturns the U.S. District Court’s decision.

The Sunshine State has a poor track record in the legal system

“I think Florida is really good at losing court cases,” said Brandes. “Especially when it comes to these types of issues. I can’t tell you how many pieces of legislation over the last few years have been thrown out because they’re almost comical in their application and flouting the Constitution or federal law.”

Brandes agrees with Judge Dabney Friedrich of the U.S. District Court in Washington, D.C. Friedrich ruled in favor West Flagler Associates, who argued that the ‘hub-and-spoke’ sports betting model violated the Indian Gaming Regulatory Act.

The model gave the tribe exclusivity over online sports betting. Anyone in the state could wager on the Seminole Tribe’s Hard Rock Sportsbook. However, the IGRA states that if someone is wagering with a tribal entity, they must be on tribal land.

The Seminole Tribe argued that since the servers hosting the sportsbook were on tribal land, the compact adhered to federal law. But Friedrich didn’t agree.

On a more philosophical level, Brandes believes that allowing competition in the sports betting market will allow it to flourish. Especially since the Seminoles are already the only option for casino gambling.

“I’m more libertarian than most of my Republican colleagues,” he said. “I don’t believe that we should give a whole section of the economy and create a monopoly in sports betting. I just fundamentally disagree with that. We could have gone out and opened the market up and got more competition. We did not need to go through the route they chose to go. I didn’t believe their legal justification for it either.”

How Brandes’ failed legislation differed from the compact’s model

Although he submitted multiple sports betting bills over a few legislative sessions, the model was nearly the same each time.

Instead of adding sports betting to the list of activities the Seminoles controlled, he wanted to mimic other states with sustained success.

“We tried to take the best breed and bring it to the state of Florida,” said Brandes. “We looked around the country at a variety of states and the way they handle sports betting. Then, we worked to take that legislation and make it better or make it fit the Florida model… To me, states are laboratories of democracy.”

His bill would’ve allowed operators to apply for licenses through the state and tax revenue at 15%. If selected, those operators would pay $100,000 for the license. And the Florida Lottery would act as the regulatory body.

“They’re [already] in the gaming business,” said Brandes about putting the Lottery in charge. “They’re the natural nexus to the gaming business. They already have a director. They already have an administration. It would be easy to bolt on to the lottery versus putting them in the Department of Professional Business Regulation, or some other agency of the state. They have very clear lines of authority and leadership.”

New compact created an entirely new gaming commission

The now vacated agreement between the tribe and the state would legalize sports betting and expand gaming options at both pari-mutuel facilities and Seminole-owned casinos. Additionally, it created the Florida Gaming Control Commission.

According to the government’s website, the FGCC would exercise all state regulatory and executive powers on all forms of gambling authorized by the State Constitution or law, including pari-mutuel wagering, card rooms, slot machine facilities, and the oversight of gaming compacts. It was also tasked with a handful of other responsibilities, including reporting criminal matters to the state attorney.

In essence, the FGCC became the overarching gaming regulatory body in the state. But Brandes felt the commission is a giant waste of resources. He says the FGCC was created solely to protect the tribe’s monopoly.

“It’s basically like one of those old mob jobs where you technically work there, but you don’t have to work,” said Brandes. “They don’t have any regulatory [authority] on any of the tribal activities which under the compact, would include sports betting. So, their job is to stand on the parapet and guard the tribe. They look out to make sure nobody encroaches on the compact. Their job is basically to regulate Miami cock fights and backroom card games.”

Why did the compact pass and Brandes’ bills fail?

The Florida legislature held a special session in May 2021 mainly to vote on the gaming compact. Gov. Ron DeSantis negotiated the details with the Seminole Tribe and brought the deal to the legislators for approval.

DeSantis, a fellow Republican, is wildly popular in his state, especially among the GOP. The House voted in favor of the compact by a 97-17 margin, while the Senate voted 39-1 to approve the deal. Brandes was the lone ‘No’ vote.

It’s clear why Brandes voted against the compact. He doesn’t believe the tribe should get a monopoly and thinks sports betting would flourish with competition in the market.

But how could nearly the entire legislature hop onboard of the gaming compact? Especially since they weren’t happy with Brandes’ previous proposals.

“I think the tribe lobbied hard to have exclusivity on sports betting,” said Brandes. “So, I think they lobbied the legislature, and the legislative leadership chose to use that as a carrot to get other extractions from the tribe.”

And when leadership decides, most of the party members fall in line.

“I think ultimately it was the House leadership and the Senate leadership which shoved this down the members’ throats or just let them willingly drink the Kool-Aid,” said Brandes. “The reason it gets all the Republican votes is that that’s what leadership wanted and they’re scared of going against the leadership.”

Which model would generate more tax revenue?

If the Seminole Tribe gets its way, and the appellate court overturns the District Court ruling, the compact would be reinstated. Under the agreement, the tribe pays the state approximately $500 million annually from revenue-sharing payments.

Brandes believes that a free-market approach would trump that number, however. Especially since the revenue-sharing payments are part of the tribe’s total revenue. Not just its sports betting results. The state could receive those checks from the tribe and allow other operators to pay their taxes.

While no specific studies provide hard estimates, the Pinellas County native feels that the best way to raise tax revenue is through the creation of a robust industry. If the government is taking a piece of the proverbial pie, the best way to generate more for the state is to increase the size of the market.

“I can’t really think of a situation where the world isn’t better because of competition,” said the Iraq War veteran. “The thesis is that the more they’re allowed to innovate and things of that nature in the sports betting world, you would generate more revenue.”

Brandes’ prediction for Florida sports betting

By this point, it’s clear that Brandes isn’t a fan of the tribe or its new gaming compact. He doesn’t think the agreement will hold up in court, but last year he said it was a matter of when and not if sports betting comes to the Sunshine State.

Even though he is not a proponent of the current deal, Brandes thinks legislators will eventually alter it to get what they want.

“They’ll want to redo the compact,” said Brandes about what will happen if the Seminoles lose the appeal. “As part of that legislation, they will deal with sports betting. My hope is that they deal with it with a free market, Republican bend versus creating new monopolies in the state, which seem to go against our Republican principles.”

However, his fellow party members tend to abandon their ideals when it comes to other previously illegal markets.

“We created an oligopoly in marijuana,” said Brandes about Florida’s cannabis industry. “When it comes to the issues of vice, the legislature prefers to have their hand on the neck of the companies operating in that space.”

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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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