On February 9, 2022, the Department of the Interior and Secretary Deb Haaland filed their Statement of Issues on Appeal. The statement serves as a preview of what issues the Appellants will be asking the Court of Appeals to review. Florida has been without legal sports betting since the D.C. District Court ruled in favor of West Flagler Associates.
They held that the Compact signed between the Seminole Tribe of Florida and Governor DeSantis was not permissible under the Indian Gaming Regulatory Act (IGRA).
With both ballot initiatives to expand gaming failing without even getting to voters, a favorable decision at the Court of Appeals (or as a last effort, the Supreme Court) is probably the only realistic chance Florida has to see legal sports betting before the 2024 election.
How we got to this point:
On November 1, 2021, the Hard Rock Digital Sportsbook quietly began taking bets, but seemingly as soon as betting became legal, it was gone.
The D.C. Court of Appeals denied a motion to stay Judge Dabney Friedrich’s ruling from November 22, 2021. The said ruling found that IGRA did not permit mobile wagering. Furthermore, despite a severability clause in the Compact, the entirety of the Compact was invalidated.
The Seminole Tribe of Florida was first to file their appeal and was subsequently followed by the Department of the Interior, which recently filed its Statement of Issues outlining just what aspects of Judge Friedrich’s ruling they will be challenging.
What are the issues?
The issues that Department of Justice lawyer Rachel Heron has lined up for appeal are threefold:
- Whether the district court erred in denying the federal government’s motion to dismiss the challenges.
- Whether the district court erred in holding the agency’s action unlawful.
- Whether the district court abused its discretion in selecting a remedy.
The government’s motion to dismiss
The Secretary of the Interior and the Department of the Interior moved to dismiss the complaints of both West Flagler Associates and the Monterra plaintiffs.
They argued that both lacked the necessary connection to have the standing to bring a claim. The Secretary also argued that the plaintiffs failed to state a claim recognized under IGRA.
The District Court held that West Flagler Associates has standing, which requires a showing of:
- injury in fact;
- concrete and particularized; and,
- actual or imminent, not hypothetical
In the case of the West Flagler plaintiffs, Judge Friedrich found that a survey conducted by West Flagler Associates showing patrons will prefer online gaming to in–person options established a real injury.
The government defendants challenged the methodology of the survey. However, Judge Friedrich was unpersuaded.
On appeal, likely, the Government will again attempt to attack the validity of the survey. They may also feel inclined to point out West Flagler’s decision not to partner with the Seminole Tribe and offer sports betting, notably via a licensing arrangement that the Compact allowed.
While Judge Friedrich found standing for the plaintiffs to challenge the Compacts, a Tallahassee–based judge reached a different conclusion when the plaintiffs attempted to challenge the Governor‘s powers to enact the compact.
The Seminole Tribe will also likely attempt to attack the plaintiffs’ standing.
Unlawful agency action?
The District Court found that IGRA did not permit the Secretary to authorize gaming “off Indian lands.” Effectively, the argument that placing servers on tribal lands meant the wagers were placed on tribal lands was rejected.
By rejecting that conclusion, Judge Friedrich concluded that bets being placed offsite would be authorized by the Compact. That would be something beyond the power of the Secretary of the Interior.
IGRA provides a limited sphere of powers the Secretary can act within. One of these spheres is that IGRA creates the power “to regulate gaming on Indian lands, and nowhere else.”
The unlawful agency action matter is likely two-fold. The first, challenging the Court’s finding regarding the power to approve the Florida betting scheme. The second, challenging the District Court’s ruling that the Secretary was under an affirmative duty to reject the Compact, instead of allowing the 45-day window to lapse. That lapse thus allowed the Compact to come into effect.
An error in the remedy?
The remedy chosen by the District Court was to vacate the Compact in its entirety. This returned gaming in Florida to its pre-2021 compact status. By challenging the validity of the remedy, the government defendants may be asking the Court of Appeals to use a more surgical approach.
Furthermore, should they deem portions of the Compact invalid, and excise only those specific portions of the Compact, it would leave in place the remainder. A favorable ruling on this point could see the advent of in–person wagering in the Sunshine State.
What to watch?
There are still several weeks before we see the hands of each of the parties in this appeal.
The appeal will be three–sided. West Flagler Associates, as plaintiffs, are going up against the Department of the Interior, Secretary, and the Seminole Tribe. Those groups, as defendants, are looking to advance their claims after failing to be satisfied with the government’s defense of their interests.
While a favorable result at the Court of Appeals is probably the only way Florida bettors will see the return of legal sports betting this year, this case seems destined for a petition to the Supreme Court. Whether the highest court actually takes the case is another issue.
Regardless of the outcome at the Court of Appeals, the defeated will ask for review at the nation’s highest court.
