Parimutuel Company West Flager Files Suit To Block Florida Sports Betting

Written By John Holden on July 6, 2021
West Flager Sues Seminoles

As the world waits for the Secretary of the Interior to rule on the new 30-year compact agreed to by the Seminole Tribe and Gov. Ron DeSantis, and approved by the legislature, there is a new challenge to the agreement.

On July 2, as most people were getting ready for the weekend, West Flagler Associates, the owners of Magic City Casino and Bonita Springs Poker Room filed a lawsuit seeking a judicial stop to the compact coming into effect. The lawsuit was filed in the Federal Northern District of FloridaTallahassee Division court.

The lawsuit comes just a few days after DraftKings and FanDuel teamed up behind the group Florida Education Champions to try to derail the Seminole monopoly via a referendum on election day in 2022.

We are months away from finding out whether Florida Education Champions get their question on the ballot. Meanwhile, a federal court threw out the state’s efforts to stifle political speech by limiting campaign contributions on ballot questions to $3,000 in a lawsuit filed by the ACLU.

What does the lawsuit want?

West Flager is asking the court to grant declaratory judgment and injunctive relief. A declaratory judgment is a court-issued order that defines parties’ rights and responsibilities. Whereas, an injunction is a court order that restricts a party from doing something, or they can compel a party to carry out an action.

West Flagler is asking the court to stop approval of the new compact. Or, in the event the compact gets approved before the Northern District of Florida can rule on the case, they are asking that the Court invalidate the compact because it violates federal law.

The plaintiffs argue that the new compact is ultra vires which is a Latin term that is used when a government body does something “beyond the powers.” In this case, the lawsuit claims DeSantis cannot enter into this compact with the Seminole Tribe, as he does not have the power to enter into contracts that would violate federal law.

Scope of West Flagler’s challenge

In the complaint, West Flagler Associates does not argue that the entirety of the new compact is ultra vires. The plaintiffs, however, argue that the new compact’s determination that bets are placed at the location of the server when bettors are not located on tribal land in the state violates federal law.

“Deeming” the bet to have been placed on Indian lands because the servers are located there contradicts decades of well-established precedent interpreting applicable federal law. Contrary to the legal fiction created by the 2021 Compact and Implementing Law, a bet is placed both where the bettor and the casino are each located.

Three reasons to halt sports betting compact

The complaint lays out three reasons that the compact and the implementing law are ultra vires acts.

  1. The compact violates the Indian Gaming Regulatory Act (IGRA) by allowing bettors to place bets while they are not on tribal land.
  2. By allowing bettors to place wagers off tribal land those bets would violate the Wire Act because sports betting otherwise remains illegal in the state.
  3. By allowing bettors to place wagers of tribal land those bets would violate the Unlawful Internet Gambling Enforcement Act (UIGEA) because sports betting would be illegal still on non-tribal land.

There are legislator concerns too

West Flagler Associates highlight several concerns about the pending compact including comments from Rep. Sam Garrison who said:

“There’s a legitimate question and legal question as to whether or not the sports gaming, with the hub-and-spoke model as contemplated in the compact, triggers Amendment 3.”

A concession?

The plaintiffs do acknowledge that the State and the Tribe are capable of agreeing to allow the Tribe to offer sports betting while bettors are physically present on tribal property.

Suit offers three arguments to support case

Claim one

West Flagler Associates asserts three claims in their complaint. The first argues that the new compact is ultra vires under IGRA. The plaintiffs claim to have standing as economic competitors to the Tribe, as operators of a competitor pari-mutuel facility that would benefit from a finding against the validity of the current compact.

The plaintiffs argue prominently, relying on the Desert Rose bingo case, as well as an amicus brief that the state of Florida signed onto in 1999, arguing that IGRA does not permit gambling to take place where patrons are “physically located in the State but not on Indian Lands.”

Claim two

The second claim centers on the Governor’s acts being ultra vires to the Wire Act, again the plaintiffs claim as competitors they have standing to seek this relief.

Claim three

The third claim centers on the Governor’s acts being ultra vires pursuant to UIGEA. The UIGEA argument relies extensively on the Desert Rose case, which analyzed the issue extensively.

What comes next for Florida sports betting?

The key thing to watch is how the Governor’s office responds to this complaint. The Governor’s office will file an answer to the complaint addressing each of the allegations. It is likely that the Governor’s office will seek to attack West Flagler’s standing to challenge the compact, but there is not a lot of case law on the ability of third parties to challenge compacts under IGRA.

The case has been assigned to Judge Allen Winsor who was nominated by President Trump to the federal bench and received his judicial commission on June 21, 2019. In a reminder that Tallahassee is a small world, it was Judge Winsor who ruled in favor of the ACLU on July 1, 2021, ruling that contributions to ballot initiatives were a form of political speech.

Photo by AP / Alfredo Lee
John Holden Avatar
Written by
John Holden

View all posts by John Holden