How Much Has Seminole Tribe Paid In Sports Betting Taxes To Other States?

Written By Steve Schult on May 24, 2022 - Last Updated on May 27, 2022
Seminole Tribe tax revenue

Few entities generate as much tax revenue for Florida as the Seminole Tribe.

The tribe is recognized as a sovereign nation, so it doesn’t pay taxes through traditional avenues. Instead, the Seminoles pay large sums to the state through revenue-sharing agreements laid out in gaming compacts.

And luckily for the state coffers, the Seminole-owned casinos are some of the most successful properties in the country.

But as we look at the possibility of another try at sports betting down the road, the tribe and the state could end up with more of a windfall, a benefit already enjoyed by other states that have partnered with the tribe.

So just how much tax revenue is the Seminole Tribe paying to governments in other states? And how much more would the Seminoles hand over to Florida if their online sportsbook was still operational?

Six Florida casinos = lots of state dollars

For example, the Tampa property generates nearly $1 billion in annual gross revenue. That alone delivers millions for the state. But the tribe owns the other five other Florida casinos, which only adds to that total.

According to a 2017 report from the Miami Herald, the tribe won $2.3 billion in total during the fiscal year. The state received between 12-15% of that number depending on the tribe’s total income.

By comparison, the state’s racetracks and racinos won $578 million over the same timeframe. Sure, the Seminole casinos have exclusivity over traditional casino games, but clearly, the Seminole Tribe is the power broker for Florida gaming.

Over the last few years, the Seminoles have begun expanding into other markets.

Under the corporate umbrella of Hard Rock International, the tribe entered the casino market in nine other states and operates its Hard Rock online sportsbook in four states.

The tribe operates casinos in New Jersey, Mississippi, Ohio, Nevada, Indiana, Illinois, California, Iowa and Oklahoma. Online, Hard Rock has sportsbooks in New Jersey, Iowa, Arizona and Virginia.

Sports betting revenue is the key indicator

When Gov. Ron DeSantis and the Seminoles agreed to terms on a new, 30-year gaming compact in May 2021, one of the main selling points for the tribe was the ‘hub-and-spoke’ model used for the new Florida sports betting industry.

The model gave the tribe a monopoly on the online betting market. Furthermore, it made them the focal point of the retail industry.

It also gave the tribe the ability to spread some Class III games like craps and roulette. But the potential revenue increase from those games is negligible compared to what the tribe would get from sports betting.

Therefore, it made more sense to focus on how the tribe’s online sportsbook fared in other markets. Especially since that is where most of the potential new Florida tax revenue would come from.

Outside of Florida, Seminoles pay the most to New Jersey

Not surprisingly, the Seminole sportsbooks in New Jersey fared better than the other markets. Thanks to its Hard Rock Atlantic City property, the tribe entered the Garden State sports betting market in 2019.

According to data compiled by PlayFlorida analyst Eric Ramsey, the tribe has handled more than $174 million in NJ wagers between its retail and online sportsbooks since launching over three years ago.

With a hold percentage of 6.3%, that led to taxable revenue of $11.07 million. In turn, that equates to $1.47 million paid to the state of New Jersey over three years from sports betting.

This is in addition to the 8% tax they pay on gross gaming revenue from the Hard Rock Atlantic City. With $1.02 billion in gross winnings over that timeframe, this equates to an extra $82.2 million paid to the state.

It may sound like a lot, but the Seminoles will pay the Florida state government more than four times that amount in a single year. Therefore, it’s more important to look at what they are paying from sports betting revenue.

Of the four sports betting markets they operate in, New Jersey is the largest tax bill they pay. By a wide margin.

A complete look at non-Florida Seminole sports betting revenue

MarketHandleRevenueTaxable Revenue Federal TaxState Tax
New Jersey $174,029,539$10,994,487$11,074,425$435,074$1,468,890

After looking at the chart, there are two key takeaways.

  • Wow, you weren’t kidding. New Jersey tax revenue is much higher than anywhere else they operate.
  • Where is the Virginia revenue?

Let’s address the second takeaway first as it’s easier to address.

The Virginia Lottery doesn’t release operator revenue totals. As a result, it’s impossible to know exactly how much revenue Hard Rock Sportsbook did in Virginia.

But we can speculate.

How much do the Seminoles pay Virginia?

The state launched its online sports betting market in January 2021. However, Hard Rock Sportsbook didn’t enter the market until July 2021. There are 12 operators with online sportsbooks in the state.

Therefore, the Seminoles lack any sort of first-mover advantage other operators may have earned. Additionally, the Hard Rock Sportsbook brand doesn’t have the same type of name recognition or reputation it has in Florida. This makes gaining a significant market share in Virginia extremely difficult.

During the first year of Virginia sports betting, the 12 operators handled $3.2 billion worth of wagers, generated $285.9 million in gross revenue and paid $20.3 million in state taxes.

If each of the 12 operators had an equal piece of the market, every operator would have 8.3% or handle about $266.6 million in wagers annually.

But markets don’t work like this. And in a market with DraftKings and FanDuel, both of which launched at the start, it’s likely they dominate it.  This leaves Hard Rock with a much smaller market share than 8.3%.

If we assume the Seminoles have a 4% market share, they will have an average monthly tax bill of $67,000. Again, this is nothing compared to what they already pay in Florida and 4% is a very optimistic number.

When the Seminoles open Virginia’s first brick-and-mortar casino this summer, it could boost numbers for the tribe. But that remains to be seen.

New Jersey has time, market size on its side

Let’s go back to the first takeaway from the chart: That the New Jersey numbers are much larger than any other state.

It’s simply because the numbers are aggregated over the entire three years Hard Rock Sportsbook was live in New Jersey.

New Jersey is also one of the largest sports betting markets in the country. This means that even with a smaller market share, the total revenue and tax payment will be larger on average.

What happened in Iowa and Arizona?

The inverse of the New Jersey takeaway is that revenue is comparatively small in Iowa and Arizona. Arizona’s numbers can be pretty much ignored since the tribe just entered the market in April.

Iowa is one of the smaller sports betting markets in the country. And like in Virginia, the Seminole Tribe lacks name recognition.

For the Seminoles, it’s all about the Sunshine State

The Seminole Tribe makes by far its biggest tax payments to Florida. Last year’s gaming compact, which is still making its way through the court system, guaranteed another $2.5 billion over the next five years to the government.

On the surface, it appears the government needs those payments dearly. Especially in an environment where most states are strapped for cash.

But after a deeper look, cornering the Florida sports betting market is much more valuable for the tribe.

After recently leapfrogging New York, Florida is the third-largest state in the country with 21.5 million people. It’s only behind Texas and California. And neither of those states have legal sports betting.

On the other hand, New York does. After a couple of years of retail sports betting at upstate casinos, The Empire State launched its online market last January.

Through the first eight weeks of betting, operators handled $3.1 billion in wagers. No, that’s not a typo. In about two months, operators reported $204.6 million in gross revenue.

Florida will likely mimic New York’s launch

Given how successful Florida’s brick-and-mortar casinos are, there’s no reason to think Florida’s results would be very different.

If Florida implemented the same 15% tax rate on online betting that New Jersey did, the $204.6 million in revenue translates to $30.7 million for the state.

That’s over a two-month span, however. Even if revenue levels stayed flat and didn’t increase, as most markets do, it’s about $184.14 million in annual tax revenue.

Last year’s gaming compact would guarantee roughly three times that amount. But that’s including revenue-sharing from casino gaming. If the state mimicked New Jersey’s sports betting model and tax structure, it could outperform the $500 million guaranteed annually from the tribe over the next five years.

Even in a scenario where the state may slightly underperform the nine-figure mark from the compact. The Seminoles still stand to lose much more.

If the gaming compact passes in the courts, the Seminoles will have 100% of the online market. And based on data from other states, the online industry always drives the overall market.

The Seminole Tribe will either have total control of a multi-billion-dollar industry or be forced to compete for customers like they are in other states.

Either way, as long as sports betting is legalized in Florida, the state will get a sizable check.

Photo by Shutterstock / Natee Meepian
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Written by
Steve Schult

As Managing Editor of PlayFL, Steve will stay on top of all things related to the Florida gaming industry. He is also a veteran of the gambling world. The native New Yorker started covering high-stakes tournaments in 2009 for some of poker's most prominent media outlets before adding the broader U.S. gaming market to his beat in 2018.

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