Florida Lawmakers Like Open-Market Approach Of Sports Betting Initiative

Written By Matthew Kredell on July 8, 2021
Lawmakers React To Sports Betting Initiative

For Florida Sen. Jeff Brandes, the sports betting initiative backed by DraftKings and FanDuel is a welcome addition.

“I think it will be overwhelmingly positive for citizens of Florida to have another option for sports betting,” Brandes told PlayFL.

At the Florida special session on gaming in May, Brandes made an impassioned speech about his grandfather teaching him never to deal with only one vendor.

For that reason, Brandes was the only senator to vote against ratifying the compact agreed upon by the governor and Seminole Tribe. The compact requires that online sports betting in the state go through servers on tribal lands.

“For the tribe, they’re fighting for a monopoly,” Brandes said. “They would like nothing more than to build a moat around sports betting.”

Brandes views the sports betting initiative filed by the group Florida Education Champions as a way for Florida to avoid the monopoly his grandfather warned him against.

Ballot attempt doesn’t surprise Florida lawmakers

Brandes said he knew the initiative was coming right after the special session. He even heard discussions of the possibility in the weeks leading up to the session.

DraftKings and FanDuel lobbied hard against the compact during the special session. They do have an avenue toward participating in the market under the compact. However, they would have to partner directly with the Seminole on the tribe’s terms. Or they could partner with a pari-mutuel operator that only gets to keep 60% of the sports betting revenue while going through the tribe’s servers.

Rep. Chip LaMarca told PlayFL he believes that is the reason the initiative was filed.

“At the end of the day, I think it’s about free-market competition,” LaMarca said. “If one business is saying you’ll have access to 60% of what’s wagered and you could strike your own deal to get 100% of it … ultimately I think it becomes a business decision for these other platforms on if they want to compete for a bigger piece of the market.”

During the special session, Rep. Randy Fine responded to concerns that Florida was setting up a sports betting monopoly for the Seminoles by pointing out that the existence of this very possibility.

“There’s nothing that stops anyone from going and trying to put sports betting on the ballot and letting commercial people do that. And the Seminoles acknowledged if that happens that doesn’t void the compact. They just don’t have to pay for the sports betting. So we could end up with not a monopoly if that’s what the voters decide.”

Fate of Seminole compact provisions could boost initiative

During the special session, lawmakers said they expected the compact’s sports betting model to be challenged in court. Sen. Travis Hutson even told colleagues that their legislative notes would end up being part of litigation.

An owner of Florida pari-mutuels filed the first lawsuit in federal court last week. The suit challenges the compact’s determination that wagers are placed at the location of the server violates the Indian Gaming Regulatory Act.

Additional lawsuits are expected, including on the state level. A group that backed Amendment 3 requiring that gambling expansions start with an initiative process and go in front of voters vowed to challenge the compact.

The compact also still needs federal approval from the US Department of Interior. The Bureau of Indian Affairs has 45 days to review the compact from when it was received June 21. That puts the deadline at Aug. 4.

If the online sports betting provisions of the compact are invalidated, Floridians will need another way to bet online. The initiative will be a ready alternative.

“It’s integral to the compact,” LaMarca said. “But if the feds come back and say that model doesn’t work or it doesn’t hold up in court, we need to find another way to do it, whether it’s a citizen’s initiative or another method.”

In such a case, LaMarca would prefer sports betting go through the legislature. He introduced a more open-market bill this year.

But there’s doubt as to whether the legislature can do sports betting after Amendment 3. And, under the initiative, the legislature would still be involved in deciding language for consumer protections and tax rate.

Sports betting initiative could bring more money

Many lawmakers at the special session lamented that Florida wasn’t getting enough money in return for the sports betting exclusivity given to the tribe.

Rep. Joseph Geller said a guarantee of $50 million wasn’t enough for a state the size of Florida. New Jersey, a state with less than half the population, got that much in tax revenue from sports betting during the pandemic-affected 2020.

By taking an open-market approach to online sports betting in Florida, the initiative likely would bring the state more money. It authorizes online wagering for professional sports venues, pari-mutuel facilities, sports betting operators authorized to conduct sports betting in at least 10 states for a minimum of one calendar year, and also the Seminoles.

If the initiative passes, the Seminoles would still pay the state a minimum of $400 million a year based on the rest of the compact.

Asked if it could be better for the state to have the online sports betting model presented in the initiative than what’s in the compact, Brandes answered: “absolutely, 100%.”

According to the initiative, all state revenue from sports betting goes toward education.

Lawmakers think ballot attempt could be successful

So does the Florida sports betting initiative have a chance to pass in November 2022? The lawmakers think so.

“I think if it’s pitched right, it could be successful,” LaMarca said. “It’s just another way to access legalized gaming that is safe and regulated.”

First things first, the initiative needs 891,589 valid signatures to qualify for the ballot. It then needs approval from 60% of Florida voters.

It will surely face strong opposition from the Seminole Tribe, which already announced its position.

“The interesting thing will be if the tribe pushes back and puts money toward defeating it,” Brandes said. “I think the public is supportive of sports betting. It will be the messaging and counter-messaging that determines who wins the day.”

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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.

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