A Look At What Could Happen With The Florida Gaming Compact Court Case

Written By John Holden on May 20, 2022
Florida Gaming Compact Court Case

Last November, Federal District Court Judge Dabney Friedrich ruled that Florida’s new gaming compact violated the Indian Gaming Regulatory Act. The ruling came seven months after Gov. Ron DeSantis and the Seminole Tribe agreed on the deal, three months after the federal government approved it and just a few weeks after the tribe launched an online sportsbook.

Following the decision, the Seminole Tribe began the appeals process, which only raised more questions about Florida sports betting.

How long will it take to reach a resolution? How many appeals can the tribe file? What happens if the Seminoles win their appeal? What happens to the sports betting ballot initiatives if the Florida gaming compact is passed?

Making heads or tails out of what is taking place in the federal courts in the District of Columbia became a full-time job. Numerous procedural issues have appeared that complicated the straightforward resolution of an appeal over the District Court’s decision.

The Seminole Tribe recently began diverting revenue-sharing payments into an escrow account until the appeal is resolved. Their latest move raises even more questions about just what happens if, at the end of the day (or decade), the Seminoles ultimately strikeout in court.

What is going on in D.C.?

West Flagler Associates, a South Florida gaming operator, filed two lawsuits in July 2021. The first lawsuit was filed in the Northern District of Florida Federal Court and was dismissed in October.

That case challenged the Governor’s authority to offer mobile sports wagering to the Seminole Tribe through a compact. While the decision was appealed to the Eleventh Circuit Court of Appeals, West Flagler Associates filed a motion to voluntarily dismiss the case last December.

The reason for the voluntary dismissal likely stemmed from West Flagler’s successful litigation in the D.C. District Court. Instead of challenging the Florida Governor’s authority, the group challenged the Secretary of the Interior’s power to pass the compact with the same mobile wagering provision.

The cases against the Department of the Interior

In addition to West Flagler’s lawsuit against the Department of the Interior and Secretary Deb Haaland, a second group of plaintiffs filed suit against the DOI and Secretary Haaland.

They were led by Monterra AF, LLC, and this is where things get complicated.

Both plaintiff groups raised virtually the same issues. Both argued that it exceeded the DOI’s authority to allow the compact between Governor DeSantis and the Seminole Tribe of Florida to become law. Monterra’s suit differed from West Flagler’s because they sought to nullify expanded gaming options at Seminole casinos.

Judge Dabney Friedrich issued her ruling just before Thanksgiving, agreeing with both sets of plaintiffs’ arguments but only addressing the West Flagler plaintiffs in the decision.

All seemed well, and an appeal was anticipated. The Department of the Interior and the Seminole Tribe, who was denied the ability to intervene, both appealed the ruling. On Jan. 25, the case was assigned a case number in the D.C. Court of Appeals, 22-5022.

It gets messy

On Feb. 18, the D.C. Court of Appeals ordered that the parties submit a proposed briefing schedule by March 21. The briefing effectively provides a timeline for how long the arguments in the case will take. The decision typically follows eight to sixteen months later.

Four days later, government attorney Rachel Heron filed a motion to consolidate the appeals in the Monterra and West Flagler case. The government argued that since the same issues were in dispute, it makes sense to proceed with both cases together as one.

West Flagler objected to the consolidation. They claimed there were sufficient differences between the two cases to keep them separate, but also raised another more significant issue.

West Flagler argued that the two cases could not be consolidated because there was no final judgment in the Monterra district court decision. Judge Friedrich ruled in favor of West Flagler but never issued a formal ruling in the Monterra case.

In federal court, typically, only final rulings can be appealed. Therefore, without a ruling in its district court case, Monterra cannot ask the court to review the decision because there is nothing to review.

Monterra did not oppose the motion to consolidate.

Hold everything

On March 10, the court put everything on hold. The parties were given 30 days to show cause for why the case shouldn’t be dismissed for lack of jurisdiction.

Just shy of a month later, the government filed a brief clarifying that they sought an indicative ruling from the district court on the Monterra plaintiffs’ case.

Instead, they received only a minute order that detailed the Monterra case was dismissed as moot, and there was no judgment adverse to the government, therefore there was nothing to appeal. As a result, the government filed a motion to dismiss the appeal against the Monterra plaintiffs.

The Monterra plaintiffs are asking the Court of Appeals to continue its review of the appeal. They argue it is now clear that there was a final judgment.

The Government filed its reply on April 12 and we have been waiting on an order from the D.C. Court of Appeals panel.

When are things going to get moving again?

A ruling on this motion could come at any time, but there is no set timeframe for it.

Once a ruling does come down, there will likely be a new order detailing that the parties must agree to a briefing schedule. The schedule will likely unfold over six to twelve weeks, depending on what procedural issues need to be addressed. However, it is possible that a ruling adverse to the Monterra plaintiffs could result in further appeals, which extend things out even longer.

It is important to note that while getting this case back on track is significant, this appeal is unlikely to be the end of the road for questions about the legality of the Florida compact.

What about the ballot measures?

Right now, the odds favor a resolution in the compact litigation before a ballot measure could pass in 2024.

Sports betting giants DraftKings and FanDuel funded a PAC called Florida Education Champions. The PAC was in charge of gathering signatures for a sports betting ballot initiative. The tribe actively opposed this measure and impeded the group’s efforts. Ultimately, the group fell short of the signature threshold and the issue won’t be on the 2022 ballot.

However, the initiative got a head start for the 2024 election cycle after the Florida Supreme Court agreed to review the proposal. As a result, the PAC bypasses language approval for the initiative on their second try.

Other options?

There remain a few ways that Florida could have sports betting. The easiest route is for Congress to pass legislation that modernizes IGRA to allow mobile sports betting within the current framework.

The legislature introduced a similar bill in a past session. But lawmakers haven’t introduced anything, despite rumors of a revival.

Another possibility would be for the Governor and Seminole Tribe to negotiate a new compact. The agreement needs to allow in-person wagering only.

But then the legislature could pass a law that would allow for commercial sports betting. Lawmakers can pass a bill that provides Hard Rock Digital with virtually the same monopoly. But lawmakers need to structure the bill similarly to other single operator arrangements around the country.

For the time being, everyone will keep their eyes on the D.C. Court of Appeals.

 

Photo by Shutterstock / Freedomz
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