If the Seminole Tribe can’t operate a sportsbook, the state of Florida won’t get its revenue share payments.
Last week, the tribe announced that it would pause making its payments to the state government. Until the lawsuit surrounding the 2021 gaming compact is resolved, the Seminoles are putting the payments into an escrow account they control.
As long as the compact is eventually deemed legal by a federal judge, the Seminoles will release the money to the state. Under the terms of the new compact, the tribe was set to pay the state roughly $500 million per year.
Gary Bitner, a spokesperson for the Seminole Tribe, told PlayFL that the tribe and the state are fighting for a passage.
“The Governor, the State of Florida and the Seminole Tribe continue to work together closely to defend the 2021 Gaming Compact in the litigation pending in the DC Circuit Court of Appeals, just as they did when it was challenged in the U.S. District Court in Tallahassee. Until the litigation is resolved, the Tribe is making revenue share payments based on the 2021 Gaming Compact into escrow.”
Bitner did not address what happens to the money if the compact is deemed illegal.
Florida won’t receive revenue share payments anytime soon
Last November, U.S. District Court Judge Dabney Friedrich ruled that the compact’s ‘hub-and-spoke’ sports betting model violated the Indian Gaming Regulatory Act.
The ruling invalidated the entire compact. As a result, the Seminoles shuttered their online sportsbook. It launched a few weeks before Friedrich’s ruling.
As Bitner mentioned, the tribe is appealing the decision. However, legal experts expect this to take between six months to a year to resolve. Basically, the state stands to miss out on a nine or 10-figure sum during the legal process.
In April 2021, Gov. Ron DeSantis came to an agreement with the Seminoles on a new compact. It would legalize sports betting and expand gaming options at both pari-mutuels and Seminole-owned casinos.
The state legislature passed the deal the following month. The federal government followed suit shortly after.
The problem was that the model used for sports betting basically gave the tribe a monopoly on the industry. Only the Seminoles could operate an online sportsbook site in Florida. Furthermore, pari-mutuels could only operate a brick-and-mortar sportsbook as a contracted vendor of the tribe.
In response, a pair of Florida pari-mutuels filed suit against the government for passing the deal. A judge in Tallahassee threw the state-level case out of court. But Friedrich ultimately agreed with the pari-mutuels.
Sports betting giants take aim at the Florida market while the legal battle ensues
While the compact is in court, other sports betting operators are plotting their entrance into the Sunshine State.
Last fall, DraftKings and FanDuel backed a sports betting ballot initiative that would allow for non-Seminole operators in Florida. The two online betting giants funded a political action committee to the tune of $37.5 million.
Unfortunately for sports bettors, the PAC failed to get enough signatures to get the initiative in front of voters this year. However, it appears that things are shaping up for the issue to be on the 2024 ballot.
Firstly, the Florida Supreme Court ruled last month that it would review the proposal. It means that the PAC behind the issue wouldn’t have to start from the ground floor in 2024. Sponsors won’t have to seek approval of the wording during their second try.
Secondly, there are more people coming on board for the 2024 push. Remember the pari-mutuels that filed the lawsuit which started this whole mess? They donated $4 million to the PAC.
It wouldn’t be weird to see other operators come aboard either. Last February, when the PAC was desperate for signatures, the group enlisted Dave Portnoy to sound the alarm on Twitter.
Portnoy founded the Barstool Sports media company. Eventually, Penn National acquired a large stake in the company and used its brand for Penn’s online sportsbook. They are one of DraftKings and FanDuel’s biggest competitors.
But Portnoy’s decision to help the initiative gain signatures indicates that other companies might help with it in the future.
In a February earnings call, DraftKings CEO Jason Robins said he was very confident the initiative would be on the 2024 ballot.