Pari-Mutuels File Second Lawsuit Targeting Federal Approval Of Compact

Written By Matthew Kredell on August 18, 2021

A pair of Florida pari-mutuel companies are taking their legal challenge of the Seminole gaming compact to Washington.

Owners of Magic City Casino and Bonita Springs Poker Room filed a second lawsuit challenging the compact, this time in US District Court for the District of Columbia.

The pari-mutuel companies previously filed a lawsuit in Florida against Gov. Ron DeSantis. By adding the lawsuit in Washington, DC, they are going after the US Department of Interior and Secretary Deb Haaland.

The Bureau of Indian Affairs within the Interior Department recently allowed approval for the Seminole’s compact with the state by taking no action over a 45-day review period.

The lawsuit challenges Haaland’s approval of the compact under the Administrative Procedure Act.

Why gambling compact faces legal challenge

The lawsuit contends that the compact approval exceeds the Secretary’s authority under the Indian Gaming Regulatory Act.

At the center of the argument is that the compact permits the Seminole to offer statewide mobile sports betting and be the center of a hub-and-spoke model for pari-mutuels located outside tribal territory.

IGRA only permits compacts between a state and tribe for gaming “on tribal lands.”

The Seminole and state claim that sports wagers originating anywhere in Florida take place on tribal lands. Their reasoning is that’s where the servers are located.

In letters to the parties of the compact, Bureau of Indian Affairs Deputy Assistant Secretary Bryan Newland explained:

“IGRA should not be an impediment to tribes that seek to modernize their gaming offerings, and this jurisdictional agreement aligns with the policy goals of IGRA to promote tribal economic development while ensuring regulatory control of Indian gaming. The Department will not read restrictions into IGRA that do not exist.”

Grounds for challenging compact approval

The lawsuit provides three reasons the online betting provisions of the compact must be set aside:

  1. The compact unlawfully permits the tribe to operate gaming outside of its own reservations, which is not permitted by IGRA.
  2. 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.
  3. The compact violates the Fifth Amendment’s equal protection guarantee by granting the tribe a statewide monopoly over internet sports gambling.

While the first two contentions were part of the original lawsuit, the third ground is new.

Each lawsuit can exist independently. And, in fact, the plaintiffs are using different law firms on each case.

“The DC federal lawsuit is the main case because it is the only one which challenges the Department of the Interior’s ‘no-action’ approval of the compact,” said Daniel Wallach, a Florida-based gaming attorney and founder of Wallach Legal. “The Florida lawsuit is and remains the primary vehicle to attack the constitutionality of the compact.”

Motion to delay sports betting launch likely

Wallach expects the plaintiffs to pursue a temporary restraining order or preliminary injunction to stop the planned launch of Florida mobile sports betting on Oct. 15.

If the court sees potential validity in the Fifth Amendment constitutionality argument, it could stop on-reservation retail sports betting.

Although they weren’t named in the second lawsuit, Wallach anticipates Florida and the Seminole Tribe to intervene as interested parties.

The state and tribe can then challenge the pari-mutuels standing to sue.

It shouldn’t take long for the proceedings to get under way. Given that the compact allows the Seminole to begin offering sports betting in October, the court could meet in September to consider an injunction.

Photo by AP / Nam Y Yuh
Matthew Kredell Avatar
Written by
Matthew Kredell

Matthew has covered efforts to legalize and regulate online gambling since 2007. His reporting on the legalization of sports betting began in 2010 with an article for Playboy Magazine on how the NFL was pushing US money overseas by fighting the expansion of regulated sports betting. A USC journalism alum, Matt started his career as a sportswriter at the Los Angeles Daily News and has written on a variety of topics for Playboy, Men’s Journal, Los Angeles magazine, LA Weekly and ESPN.com.

View all posts by Matthew Kredell