Four years ago, the Seminole Tribe supported one of the measures eventually used to fight against the Florida gaming compact. And ultimately, their control over a Florida sports betting market.
Unfortunately for the tribe, their support for Amendment 3 appears to be a case of poor timing. It was either a version of bad luck or a lack of foresight. You can be the judge.
Amendment 3, the IGRA and the gaming compact lawsuits
Last year, Gov. Ron DeSantis negotiated a new 30-year gaming compact between the Sunshine State and the Seminole Tribe. It was passed by the legislature during a special session in May and approved by the Department of the Interior a couple of months later.
The new compact was a large-scale gaming expansion. Most importantly, Florida sports betting was legalized in both retail and online form. Additionally, it allowed for Seminole-owned casinos to offer craps and roulette, while pari-mutuels could spread house-backed card games similar to blackjack.
However, it essentially gave the Seminoles an effective monopoly over the sports betting market. The compact called this the ‘hub-and-spoke’ model for sports betting.
Firstly, the tribe would be the sole operator of online sportsbooks. Secondly, any pari-mutuel facility that opened a retail operation would be forced to pay 40% of gross revenue to the tribe. The pari-mutuel would keep the other 60% tax-free and the tribe would take care of the state’s taxable portion.
Once the legislature passed the compact, the legal battle began. There were two separate lawsuits filed by two different groups, but both were fighting to nullify the compact.
Difference between the two lawsuits
West Flagler Associates, the ownership group of Bonita Springs Poker Room in the Naples area and Magic City Casino in Miami, filed the first lawsuit. Monterra AF, a group comprised of an anti-gambling group called No Casinos and local businessmen, filed the other.
They attacked separate portions of the compact. West Flagler filed suit over the sports betting model, while Monterra attacked the expansion of gaming options.
Not only did they go after different sections of the agreement, but they used different legal precedents to argue their cause. West Flagler claimed the sports betting model violated the Indian Gaming Regulatory Act. Monterra, on the other hand, said the compact violated Amendment 3.
What are the IGRA and Amendment 3?
The IGRA is a U.S. federal law established in 1988 that outlines the framework for tribal gaming in America. One of the regulatory requirements in the law stated that gamblers must be located on tribal land when placing bets with a tribe.
West Flagler argued that the compact violated that provision of the IGRA. Since Florida sports bettors would be able to wager from anywhere in the state with the tribe’s online sportsbook, their legal team believed the new agreement violated federal standards.
Ultimately, U.S. District Judge Dabney Friedrich agreed with West Flagler. She ruled that the compact violated the IGRA. In response, the Seminoles shut down the Hard Rock Sportsbook after nearly a month of operations.
Amendment 3 was a ballot initiative passed during the 2018 election cycle. The measure stated that any gambling expansion in Florida must be approved by the voters. Not unilaterally decided by lawmakers.
Florida voters overwhelmingly approved the initiative, with 71.47% of the electorate voting ‘yes’ on the measure. Here’s how the measure read:
“This amendment ensures that Florida voters shall have the exclusive right to decide whether to authorize casino gambling by requiring that in order for casino gambling to be authorized under Florida law, it must be approved by Florida voters pursuant to Article XI, Section 3 of the Florida Constitution. Affects articles X and XI. Defines casino gambling and clarifies that this amendment does not conflict with federal law regarding state/tribal compacts.”
Monterra argued that since the compact expanded gaming options at both Seminole casinos and pari-mutuels, the compact violated Amendment 3. Last month, the U.S. District Court of Appeals dismissed Monterra’s lawsuit.
Although it was dismissed, Monterra’s argument wasn’t invalidated. The court dismissed it on the grounds that it was moot since Friedrich already invalidated the compact.
Seminole Tribe’s support for Amendment 3
Three years before Monterra invoked the ballot initiative in its lawsuit, the Seminole Tribe was helping fund its passage. The tribe was the top donor to Voters in Charge, a political action committee registered in support of the measure.
Voters in Charge received $46.15 million worth of donations. Nearly all of it came from the committee’s top three donors.
The Seminole Tribe donated $24.35 million, Disney Worldwide Services added another $20.55 million and No Casinos, the anti-gambling group part of the Monterra suit, added $851,000.
Other supporters included the League of Women Voters of Florida, Florida Chamber of Commerce, Florida Restaurant and Lodging Association, Democratic Progressive Caucus of Florida and the Florida Family Policy Council.
By comparison, its opposing group, Vote No on 3 PAC, only received $1.69 million in funding. Nearly all of that came from West Flagler’s $1.5 million donation.
Other opponents of the amendment included Sen. Bill Galvano, a Republican representing the area just south of West Palm Beach, Hialeah Park, the American Legion of Florida, Republican Party of Palm Beach County, Libertarian Party of Florida and the Tampa Bay Young Republicans.
During the lead-up to the election, Galvano stated publicly that the Amendment would ensure that the tribe has a stranglehold on the Florida gambling market.
“It’s game over for the Legislature if that [constitutional] amendment gets on the ballot and passes,” said Galvano. “And at that point, we’ll just be spectators in the world of gaming, which will essentially be a monopoly for the Seminole Tribe.”
Despite his legitimate concerns, Galvano’s comment aged poorly. Very poorly.
How Amendment 3 will likely hurt the Seminole Tribe’s market share
Regardless of what happens in the future, Amendment 3 paved the way for non-Seminole operators to enter the Florida gambling market. Several gaming giants began funding gambling-related ballot initiatives in response to the compact’s passage.
DraftKings and FanDuel spent a combined $37.5 million funding a PAC called Florida Education Champions. The committee was tasked with the signature-gathering process for a sports betting initiative that would allow for a more free-market approach to sports betting.
Additionally, Las Vegas Sands funded a separate PAC dubbed Florida Voters in Charge aimed at passing a separate measure that could end the tribe’s casino monopoly. The initiative would allow for commercial casinos in Florida as long as the property is at least 130 miles away from a Seminole casino.
Las Vegas Sands sent $73.5 million to the PAC. Given the mileage restrictions in the initiative, it appears the gaming giant wants to build a new property in Jacksonville.
But more importantly, neither of these initiatives would even be possible without Amendment 3’s passage in 2018.
Ultimately, both initiatives failed to get on the ballot in 2022, thanks in part to the Seminoles spending more than $40 million to fight them.
For those keeping track at home, the Tribe spent $24.35 million to pass Amendment 3 in 2018. However, it has spent nearly double that amount essentially fighting against it four years later. In just one presidential term, the Seminole Tribe dropped nearly $65 million just to keep its current market share.
Furthermore, these initiatives have already been greenlit to try again in 2024. It’s inevitable that the tribe will continue to spend millions fighting these motions.
But eventually, the coffers will run dry, right? How long can the tribe keep this fight up?
Why did the Tribe support Amendment 3 in the first place?
This is where things get interesting. At the time, it appeared that Amendment 3 would only add to the Seminole Tribe’s power.
The Seminoles have deep pockets and are clearly willing to spend whatever it takes to maintain dominance. Its defeat of both initiatives proves that money alone has enough influence to get its way.
As a result, given the landscape of the gaming industry at the time, this seemed like it would only cement the Seminoles’ power. But there was one thing they didn’t account for. Or know was coming.
Supreme Court overturns PASPA, leaving sports betting up to the states
In May 2018, the U.S. Supreme Court ruled that the Professional and Amateur Sports Protection Act was unconstitutional. The ruling legalized sports betting outside of Nevada and kicked it back to state legislatures to make that decision for its constituents.
By the time the Supreme Court made the ruling, the Seminole Tribe was already fully backing Amendment 3. The Florida Secretary of State requires the submission of paperwork and signatures for potential ballot initiatives before Feb. 1.
Therefore, the tribe needed to take a stance several months before the Supreme Court made a ruling. However, it was clear that a ruling on the case was coming. It was just a matter of which way the justices would rule.
A ruling five years in the making
In 2011, New Jersey voters enacted a referendum that allowed sports betting at racetracks and Atlantic City casinos. But the NCAA and the four major professional sports leagues sued over the state’s decisions to allow sports betting.
In 2013, the sports leagues won their lawsuit and there would not be sports betting in New Jersey.
New Jersey legislators slightly altered the law, but the leagues sued again. The leagues won again. New Jersey appealed and lost two more times before taking it to the nation’s highest court. Oral arguments were heard in December 2017. It was clear there would be a final decision soon.
In fact, several states appeared ready for it and launched sports betting that same year with New Jersey. Florida was not one of those states.
Maybe the tribe wasn’t paying attention to the case. Maybe they just thought there was very little chance New Jersey wins the case. Or maybe they just didn’t think that the measure could cause such problems even if New Jersey won.
Whatever their reasons were, they decided to fund an initiative that singlehandedly paved the way for non-Seminole operators to get a piece of the valuable Florida gambling market.