The D.C. Court of Appeals holds the immediate fate of Florida sports betting in its hands.
In November 2021, a U.S. District Court Judge ruled the new Florida gaming compact violated the Indian Gaming Regulatory Act. As a result, the compact was invalidated and legal sports betting in Florida was shuttered after about three weeks.
But the Department of the Interior, which approved the compact, and the Seminole Tribe appealed the decision. Throughout the second half of 2022, written briefs were filed with the appellate court. At the end of the year, the three-judge panel heard oral arguments.
A ruling is expected sometime in the next few months. But how likely is the D.C. Court of Appeals to overturn Judge Dabney Friedrich’s 2021 decision?
Legal minds somewhat split, but favor reversal after oral arguments
PlayFL’s legal expert and Oklahoma State University law professor John Holden said that it appeared one-third of the panel is leaning towards overturning the original decision.
“I’ve talked to a number of people who listened to oral arguments. They think there is at least a strong possibility that one judge is favoring reversal. But, at the end of the day, it is really hard to predict outcomes based on oral arguments.”
Daniel Wallach, an attorney who founded a gaming and sports law firm, is in a similar camp as Holden.
“After today’s oral argument, the notion of legal sports betting in Florida as early as 2023 may not be so far-fetched,” Wallach tweeted in December.
In a follow-up tweet, Wallach said he believed it was 1-1 and Judge Michelle Childs was the swing vote. Childs was appointed to the court in July 2022 by President Joe Biden.
On the other hand, Bob Jarvis, a gambling law professor at Nova Southeastern University in Florida, has a more concrete opinion on the outcome. But it has nothing to do with the arguments during the appeals process. Instead, it has more to do with the court correcting Friedrich’s mistake.
“I always thought these lawsuits were hopeless,” said Jarvis. “I was stunned when Judge Friedrich ruled the way she did. She got the law completely wrong. I have always said that it will be fixed. That her decision, her error, will be fixed by the D.C. Court of Appeals. But if for some reason the D.C. Court of Appeals makes the same mistake, that the U.S. Supreme Court will fix this problem.”
2022: The Year of the Appeal
Sports betting in the Sunshine State is essentially a two-year-long legal soap opera. In May 2021, Gov. Ron DeSantis and the Seminole Tribe agreed to a new, 30-year gaming compact.
The compact would expand gaming offerings at both pari-mutuel facilities and Seminole-owned casinos. But more importantly, it would legalize both online and brick-and-mortar sports betting. However, the ‘hub-and-spoke’ sports betting model gave the tribe a near-monopoly over the state’s industry.
The only online sportsbook allowed under the deal would be the Seminole Tribe’s Hard Rock Sportsbook. Furthermore, any pari-mutuel that opened a retail sportsbook would do so as a contracted vendor of the Seminole Tribe. The pari-mutuel would give 40% of its net revenue to the tribe and keep the other 60% tax-free.
The state legislature passed the agreement during a special session shortly after the agreement. The only thing standing in the way of Florida sports betting was federal approval of the compact. In August 2021, Department of the Interior Secretary Deb Haaland passed the compact through inaction.
West Flagler Associates, the ownership group of two Florida pari-mutuels, filed lawsuits over the sports betting model. Its state-level suit was tossed out of court. But the U.S. District Court heard its federal case.
In the meantime, the Seminole Tribe launched its sportsbook in November 2021. But a few weeks later, Friedrich ruled in favor of West Flagler and the tribe shuttered its operation. Friedrich said that since online betting would allow Floridians to bet with a tribal entity from outside tribal land, the compact violated IGRA.
The federal government filed an appeal, as did the Seminole Tribe. Therefore, 2022 became the year of the appeal.
Which legal team performed better during the appeals process?
West Flagler filed suit against the federal government, more specifically Haaland. Not the Seminole Tribe.
Thus, the tribe was left on the outside of this legal battle and their argument. But they don’t want to be. Their filings were simply to convince the court they should be included in the suit. If they are involved, most legal experts believe the case will be thrown out because of the tribe’s sovereign status.
“Neither suit by West Flagler challenged the Seminole Tribe of Florida’s role in the compacting process,” said Holden. “As there was no clear way to do that.”
At the district level, Friedrich denied the Seminoles’ motion for limited intervention. Her decision was a key reason the ruling went the way it did. Holden said the initial decision could give West Flagler a slight edge when they started the appeals process.
“I think we were dealing with an area of law that really had not been articulated very clearly in the precedential decisions,” said Holden. “I think having a ruling on their side already is perhaps a slight advantage for West Flagler. But this is a really complex issue that has not been addressed in a perfectly analogous situation. So, it is more than possible we end up with a reversal.”
While the edge may have gone to West Flagler at the start of the appeals process, Holden said that both legal teams were “some of the best in the business” and had “reasonable strategies.” In other words, neither team dropped the ball.
Jarvis had a different take on the situation.
West Flagler stumbled during oral arguments
Unlike Holden, Jarvis believes the case is cut and dry. There is precedent and Friedrich ignored it. Since tribes are sovereign entities, the Seminole Tribe needs to be involved in the lawsuit.
“Friedrich, who is writing completely new Indian law. A type we have never seen before, decided ‘No, no, just because this involves an agreement that the tribe negotiated with the State of Florida, I don’t need the tribe to be in the lawsuit,’” said Jarvis. “What? That’s absurd. Of course, they’re a necessary party.”
However, Jarvis also believes that one side fumbled the case during the appeal. He thinks that during oral arguments, West Flagler’s legal team exposed how little of the law backs their argument.
“I mean, you know how ridiculous the argument of Magic City Casino and the Bonita Springs Poker Room is when their lawyer says that it would be a cruel joke [if the court accepts the federal government’s premise],” said Jarvis. “[That is] the type of stuff that people say before they go to law school. No self-respecting lawyer says that sort of stuff because he knows that they do not have anything on their side.”
Additionally, Jarvis thought that some of the judges picked up on that during their questioning.
“Of course, we never really know. It’s always like reading tea leaves,” said Jarvis. “But [Judge] Wilkinson’s questions certainly showed great skepticism of what Magic City was trying to sell.”
