Federal Blocks Seminole Tribe's Monopoly on Sports Betting

Earlier this year, Florida Governor Ron DeSantis signed a new 30-year compact with the state's Seminole Indian Tribe. Under the terms of the new compact, the Tribe is to receive the exclusive right to offer sports betting to the state's residents in exchange for $2.5 billion in fees over the next five years. The Tribe actually started taking legal sports wagers in the early part of November 2021.

On November 23, 2021, Federal Judge Dabney L. Friedrich out of the District of Columbia ruled that the new compact is null and void. For the time being, that means that the Tribe's Hard Rock Cafe sportsbook will have to stop taking retail and online sports wagers. Also, the tribe’s Hard Rock casinos in Broward and Hillsborough counties will have to pause on offering a full slate of casino games. For what it's worth, the new compact authorized said casinos to start offering games like craps and roulette.

Friedrich made this decision based on the premise that the new compact violates the federal Indian Gaming Regulatory Act. Under the terms of that act, any gambling activities provided by the Tribe have to take place on Tribal lands.

The Seminole Tribe and Governor DeSantis have contended that by putting computer servers on Indian land, any wagers placed through those servers would in fact be wagers placed on Indian land. The Judge is not interested in buying that contention. In the Judge's eyes, the wagers are being placed from off Indian land locations. The term the Judge used was "fiction." Here's a quote from the judge:

"Although the Compact ‘deem[s]’ all sports betting to occur at the location of the Tribe’s ‘sports book[s]‘ and supporting servers ... this Court cannot accept that fiction,’’ Friedrich wrote. “When a federal statute authorizes an activity only at specific locations, parties may not evade that limitation by ‘deeming’ their activity to occur where it, as a factual matter, does not.”

With the new compact thrown out, the state will have to reinstate the prior compact, which was enacted in 2010 and will not expire until 2040.

For the time being, this is a big victory for the parties that filed this suit in federal court. That would include West Flagler Associates, the Bonita-Fort Myers Corporation, and the Havenick family, all casino or pari-mutuel facility owners in Florida. Other beneficiaries of this ruling are top U.S. online bookmakers like DraftKings and Fanduel. In fact, both of these operators made contributions in the fight against the Tribe's monopoly.

The surest bet on the planet is the Seminole Tribe and Florida Attorney General will be appealing this ruling. To say this ruling sent shockwaves throughout the Florida gambling community would be an understatement.

What all sides are likely to do at this time is to try to get initiatives on the ballot for November 2022. They will put the issue of sports betting for Floridians in the hands of the state's residents. There is clearly a long way to go before all of this is resolved.