A federal judge put a sudden halt on recently launched regulated Florida sports betting. U.S. District Judge Dabney Friedrich decided late Monday that a new tribal-state gaming compact between Florida and the Seminole Tribe is illegal.
The ruling did not put an instant stop to wagering. As of Tuesday afternoon, the Seminole’s Hard Rock sportsbook app remained live and was accepting bets. Even if the Tribe succeeds on its appeal, continuing to take bets is a risky strategy.
Why Did the Judge Find Florida Sports Betting Illegal?
The lawsuit before Judge Friedrich was part of a series of cases launched by Florida parimutuel card rooms. Due to legal technicalities, the parimutuels sued the federal government because the Department of the Interior has jurisdiction over Tribal gaming nationwide.
This decision consolidated multiple cases. It is separate from an earlier case in a Florida federal court that sports betting supporters won. The parimutuels challenged Interior and the department’s secretary for approving the new Seminole-Florida gaming compact.
They contended the compact violates Indian Gaming Regulatory Act (IGRA), which limits Tribal gambling to tribal land. Florida’s new compact created a hub-and-spoke system for sports betting. Wagers could be placed from anywhere in the state. However, all bets would be routed through servers on Seminole property.
This novel provision created problems for the federal government. During a 45-day review window, the Department of the Interior never formally approved Florida’s compact. Instead, regulators allowed it to enter into force without a decision. The lawsuits challenged this de facto approval.
Judge Friedrich determined that “the compact violates the Indian Gaming Regulatory Act.”
What Does This Mean for Florida Sportsbooks?
The ruling effectively tosses the entire new Florida-Seminole compact out. The Tribe is playing with significant legal consequences by continuing to take bets while any appeals play out.
However, it is likely Judge Friedrich’s ruling will be stayed pending resolution of the appeal. Once a stay is issued, the Tribe could take wagers again. Litigation could take years to resolve and during that time, betting could remain live.
There are three potential issues with this path for the Seminole Tribe. First, if the compact is thrown out at the end of the lawsuits, they may need to refund bettors. Because all the bets they took were technically illegal, losing players could sue to get their money back. This would be a massive potential liability for the Tribe.
Second, the federal government may not actually support the compact and could stop defending its legality. In a hearing before Judge Friedrich last week, lawyers for the Department of the Interior pointedly refused to state whether the government believes hub-and-spoke sports betting on Tribal land is legal. If the government abandons its defense, the Seminole Tribe may have few options.
Third, petition drives to open regulated sports betting throughout Florida are moving forward.
What’s Next for Florida Sports Betting?
The Seminole Tribe will continue to support the legality of the new gaming compact. Likewise, for now, Florida stands behind its new law.
It took over a decade for Florida to update its gambling laws. Due to the complexity of tribal and industry politics, the new compact was a large win for current Governor Ron DeSantis. The deal ensured at least $500 million per year in payments from the Seminole Tribe. After years where the Tribe refused to pay a cent, this was a big deal for state coffers.
If the compact is ultimately deemed illegal, it is unlikely the Seminole Tribe will simply accept the loss of its gaming exclusivity. Likewise, if Florida voters approve a different gambling expansion in November 2022 elections, the Tribe will likely file its own lawsuits.
This is a delicate balance for all parties involved. If and when the federal Circuit Court issues a stay, there may be more clarity. But only for a short period of time. Florida’s new sports betting rules will remain in flux for the foreseeable future.
