Amid all the legal complexities surrounding the Seminole Tribe of Florida‘s compact, it could be bingo that cripples it.
Bingo was at the heart of a 2018 case the Ninth Circuit Court of Appeals ruled on. In the case, a tribe argued that bets processed through servers on Indian land were protected by law. The state disagreed. A lower court sided with the state, and the Ninth Circuit sided with the lower court.
How we got here
Earlier this year, Gov. Ron DeSantis and the Seminole tribe agreed to a compact. The deal updated the existing agreement between the tribe and state, allowing (among other things) sports betting. But the sports betting wouldn’t be limited to bets placed on Seminole land. Rather, it would allow the tribe to accept bets from anywhere in the state. Those bets would be processed through servers on Seminole land.
This framework is known as a “hub and spoke” model. The Seminole servers are the hub, and the “spokes” extend out to every bet placed off Seminole land. The idea here is that because the bets are routed through servers on Indian land, the framework is legal under the Indian Gaming Regulation Act (IGRA).
The pushback on the compact is palpable, with voices from across the industry crying foul. And while being vocal may grab headlines, it’s the legal precedent that has the fiercest bite.
And that’s where the Ninth Circuit’s 2018 decision may play a crucial role in Florida sports betting.
Why California v. Iipay matters
In 2014, the Iipay Nation of Santa Ysabel faced hard times. Their first run at a casino failed, and they needed a way to generate income. So, the tribe set up servers in their shuttered casino and launched Desert Rose Casino, an online platform that offered one game: bingo.
The tribe believed that IGRA protected the venture. IGRA authorizes betting that takes place on Indian land, and the tribe (like the Seminole) believed that protection extended to bets processed on Indian land no matter where those bets took place.
The Ninth Circuit disagreed, upholding an earlier decision by a district court. Their reasoning? The Unlawful Internet Gambling Enforcement Act (UIGEA) prohibited the hub-and-spoke model. Basically, the court concluded that the location of a bet, not the server, is where the bet takes place. And if that bet takes place in a location where gambling is illegal, then the bet is illegal.
“Even if [Desert Rose Bingo] is completely legal in the place where the bet is accepted, on Iipay’s lands, the bets are not legal in the jurisdiction where
they are initiated, in this case California,” the court noted. “Thus, when Iipay accepts financial payments over the internet as part of those bets or wagers, Iipay violates the UIGEA.”
The court referred to a Supreme Court of the United States decision known as “Bay Mills,” too, noting that the court made a distinction between bets that take place at a brick-and-mortar location on Indian land versus bets that take place online off Indian land.
What we can expect in the future
A pair of Florida parimutuels filed a lawsuit against the compact this past week, citing the Iipay case. The legal standing seems strong, as California vs. Iipay and Bay Mills seem to speak directly to the Seminole compact.
It’s likely that a court case would include debate over the Iipay and Bay Mills precedents. If that’s the case, the Seminole face a fierce hurdle. The Ninth Circuit and Supreme Court’s decisions seem pretty airtight.
Another hurdle? DraftKings and FanDuel recently launched an initiative to allow sports betting in Florida. If the initiative receives enough support, it could appear on the ballot in 2022. A 60% “yes” vote from voters would be enough to pass the amendment.
