Sportsbook in Las Vegas. Credit: Simon Ladesma, licensed under Creative Commons CC BY-NC 2.0
Are you ready for some football?
More to the point: Are you ready to gamble on it (legally)?
Twenty-one states and the District of Columbia are set to go, and nine more are working on it as fast as they can, including Florida, hinging on an approval from the federal government that could reshape the state’s gambling landscape.
The initial target date is Sept. 9, kick-off day for the National Football League, resuming after a long time-out forced on the league by COVID-19. Preseason play begins Aug. 12.
The floodgates that blocked sports betting opened three years ago with a pivotal U.S. Supreme Court ruling, sparking a gold rush worth billions.
Sports betting platforms such as DraftKings, FanDuel, William Hill and the like are competing to make deals in various states to grab as much market share as they can as the industry rapidly expands.
DraftKings alone is on track to gross $2.9 billion to $4.3 billion a year when sports betting reaches “maturity,” defined as 65 percent of the U.S. population having legal access to it, according to DraftKings’ report to investors in March. The report forecasts the sports betting market in the United States alone is worth $22 billion annually.
There is a lot at stake in Florida, considered one of the largest potential markets in the nation, with an estimated $7 billion in unlawful mobile sports betting already occurring and ready to be harnessed to a lawful enterprise, according to the American Gaming Association.
If approved at the federal level — the Florida Legislature already signed off — the 2021 compact between the state of Florida and the Seminole Tribe of Florida, which includes sports betting, would bring a minimum of $2.5 billion to state coffers over the next five years.
Indian gaming and sports betting
Gambling interests in Florida are holding their breath as they wait for the Bureau of Indian Affairs, or BIA, to say whether they may proceed under the federal Indian Gaming Regulatory Act, or IGRA, with mobile sports betting as proposed by the state and the Seminole Tribe of Florida.
At the end of last year, the BIA was regulating gambling for 245 tribes in 29 states, according to the National Indian Gaming Commission.
At earliest, Florida would commence sports betting Oct. 15, based on state legislation, though the state of play by then in terms of anticipated litigation is anybody’s guess.
Florida, Arizona and Connecticut are among the 29 states that conduct gambling in conjunction with Native American tribes, and they are racing to cash in on NFL sports betting this season. Circumstances vary from state to state.
For example, Florida has two federally designated tribes — the Seminoles and the Miccosukee — while Arizona has 22. California, the largest U.S. market that does not allow sports betting, has 75 gaming tribes.
Another contrast: While the Florida Constitution bans expanded gambling except by statewide referenda, a campaign is under way in California to pass a constitutional amendment legalizing sports betting. Another: Where sports betting is legal, some states allow it statewide via mobile devices and others only at Indian casinos and racetracks.
Connecticut has signed tribal compacts with its Mashantucket Pequot and Mohegan tribes and adopted implementing legislation, but as of last week, it had not submitted the compacts for federal review, making its shot at NFL 2021 a long one.
Arizona is the latest state to join the fray, having won approval of its revised tribal gaming compacts on May 24 from the Bureau of Indian Affairs, housed in the U.S. Department of Interior.
Does Arizona decision show the BIA’s hand?
In Arizona, gambling regulators are working overtime to get sports-betting regulations in place in time to legalize sports betting on NFL games. The BIA’s approval on May 24 covers 19 tribal compacts that authorize online/mobile sports betting, with 10 licenses reserved for professional sports teams and 10 for tribes.
That Arizona decision would seem to bode well for Florida winning approval to offer mobile sports betting, classified as “class III” gaming.
Here is what the BIA said about Arizona’s new gaming compacts, in part:
“The 2021 compact expands the scope of class III games the Tribe may offer on its Indian lands, including in-person and mobile sports betting and fantasy sports,” says the May 24 decision issued by Bryan Newland, new head of the BIA, which is now headed by Interior Secretary Deb Haaland. Both officials are Native Americans.
“The 2021 Compact additionally expands the scope of non-exclusive class III games the Tribe may offer to include on-reservation, in-person and mobile sports betting and fantasy sports wagering, while carving out limited exceptions for state lottery, off-reservation fantasy sports, and state-licensed sports betting.”
The BIA’s decision for Arizona does not necessarily signal what it may decide for Florida.
“It’s a very gray area and it will be subject to litigation,” said Florida state Rep. Randy Fine, a Brevard County Republican and former gambling executive who said he remains confident the BIA will approve Florida’s new compact with the Seminole Tribe of Florida.
The obstacle for Florida will be not the BIA but the courts, he said.
Mixed reviews in the Arizona House
In Arizona, the 20-year-long compacts and related legislation received widespread but not unanimous support among state lawmakers, including one Democrat who called the agreements corrupt, one Republican who said they violate free-market principles by limiting licenses to tribes and professional sports franchises, and the majority who said they comprise an imperfect but fair and extremely lucrative arrangement.
Republican Arizona state Rep. Jeff Weninger sponsored the House legislation to implement the compacts.
“This is something my constituents are excited about and are asking for,” Weninger told his colleagues in committee debate, asking for their support in order to implement the agreements before NFL regular season begins.
Legislation to implement the compacts passed handily in the Arizona Legislature. Opposition was bipartisan and vocal but small.
“I don’t like that we’re offering exclusive, multimillion dollar licenses to a very small group of people…sports franchise owners,” said Republican Rep. Michelle Ugenti-Rita, during legislative debate.
A self-described conservative, she said the deal negotiated between the 19 gaming tribes and Republican Gov. Doug Ducey violates her free-market principles. “The vast majority of Arizonans will not be able to compete. We’re making super-winners out of winners.”
Fellow Republican Rep. John Fillmore opined: “Basically what I’m hearing is this is an explosion of gambling inside the state of Arizona. This is basically bringing us full, almost Las Vegas-style gaming. And as a person who goes to Vegas now and then for fun, I’m not sure I want this in the state of Arizona. I’m quite surprised this is the direction the state is going.”
Democratic Rep. Randall Friese objected to being forced to act in haste.
“I have a lot of concerns about what this bill is going to do for the poor people in this state. You look on who’s endorsing this bill, there’s a lot of big, powerful, wealthy companies.” Friese said. “This is not something we should be running through as a mirror, in a short amount of time.”
Rep. Sally Ann Gonzales, a teacher and former tribal leader, unsuccessfully posed a series of amendments, from requiring more revenue to be go toward education to increasing the number of sports-betting licenses for tribes. She questioned why there are only 10 such licenses reserved for tribes while 19 tribes have gaming compacts with the state.
Gonzales said the only big winners are the governor, his aspirations for higher office, and the professional sports organizations, which she described as “Doug Ducey’s tribes.”
Florida critics ask feds to reject the compact
Like Arizona, Florida wants to allow mobile sports betting (bets placed via cellphone or electronic device) statewide. Unlike Arizona, Florida has a constitutional amendment that requires expansion of gambling to be subject to a statewide referenda.
In hopes of not triggering that referenda, Gov. Ron DeSantis and Seminole Tribal Chairman Marcellus Osceola agreed to a “hub and spoke” arrangement in which wagers placed on mobile devices anywhere in the state would be “deemed” to have been made on tribal property where the servers processing those wagers are to be located.
Miami Beach Mayor Dan Gelber, who opposes expansion of gambling, says both IGRA and Constitutional Amendment 3, adopted in 2018, prevent what Florida and the tribe propose to do.
“Casinos bring nothing but corruption and economic deformity,” Gelber told the Phoenix. “There’s no casino town in America that we want to be.”
In league with Miami Beach, the City of Doral recently adopted a local ordinance banning any new casinos, amid speculation that former President Donald Trump wants to acquire permits and licenses needed to convert his Trump National Doral resort into a casino.
Still, local officials know the Florida Legislature frequently votes to block local legislation it doesn’t like, and it may preempt Doral’s ban when it reconvenes in pre-session committees just three months from now.
Mayor Gelber is fighting federal approval of the compact in Florida. He started with a June 3 letter to the U.S. Department of Interior, arguing that the compact was corruptly drafted.
“It was simply a vehicle hijacked by non-tribal casino interests who fully corrupted the legislative and executive process in order to obtain advantages outside of tribal land in direct contravention to the interests of Floridians,” Gelber wrote to Secretary Haaland and Indian affairs bureau chief Newland.
“It also forms the template by which future non-tribal casinos could be thrust upon communities like mine, so that wealthy donors make billions at the expense of our local businesses and quality of life.”
Gelber noted that the compact authorizes three new Seminole casinos over the next 30 years, as well paving the way for other new casinos in South Florida.
“It also requires the Seminole Tribe of Florida to agree not to object to gambling operations that are farther than 15 miles from its Hollywood casinos, thus giving the Fontainebleu Miami Beach [owned by billionaire Jeffrey Soffer] and Trump National Doral [run by the ex-president’s son Eric Trump] a necessary prerequisite to creating casinos in the cities of Doral or Miami Beach or other locations within Miami-Dade County,” Gelber wrote.
He highlighted the fact that Florida legislation originally proposed a 100-mile buffer between Seminole casinos and any new ones, but the final approved language reduced the buffer to 15 miles – just small enough to green-light casino development at the Fontainebleu or Trump Doral.
Rep. Fine described Gelber’s letter as “babble.”
”Here’s news for you: The DOI [Department of Interior] could care less what the mayor of some small town thinks about the compact,” Fine said.
John Sowinski, president of “No Casinos,” which helped pass Amendment 3 — the “Voter Control of Gambling” amendment in 2018 — also wrote to Bryan Newland at the Bureau of Indian Affairs, urging him to send Florida’s proposed compact back to the state for a rewrite.
Like Gelber, Sowinski suggests the compact was devised “for the benefit of billionaires.”
“This compact requires the Seminole Tribe to accept what would have been violations of exclusivity under [the] 2010 compact – non-tribal gambling that the Tribe has always opposed, and for which the Tribe went to Federal court in order to stop and won. These enormous concessions from the Tribe are…for the benefit of specific non-tribal interests. The provision in question prohibits the Seminole Tribe from challenging the movement of existing casino licenses in South Florida, provided that they end up not less than 15 miles from the Seminole Hard Rock Casino in Hollywood,” says the letter from Sowinski, dated June 6.
It continues: “If you draw a 15-mile radius around the Hard Rock, there you will find sitting less than two city blocks outside it, two nationally recognized resorts which are aggressively pursuing casinos and both of which are powerful political players in Tallahassee….IGRA was not written to expand non-tribal gaming for the benefit of billionaires, and it is wrong to use the leverage of a tribal-state compact to advance controversial and legally dubious non-tribal gaming.”
In spite of repeated requests by the Phoenix over the past four weeks, the BIA declined to comment.
Big money, big questions
Likewise, the governor’s office declined to comment on the status of the gambling compact, in spite of repeated requests by the Phoenix over the past four weeks.
Rep. Fine said he assumes the compact was transmitted to the Bureau of Indian Affairs promptly after being ratified by the Legislature on May 19. DeSantis signed the gaming bills on May 25.
State Rep. Joe Geller, a Democrat representing parts of Broward and Dade counties, said the only things he’s sure of are that there’s big money to be made and that litigation is coming.
“I’m not against a compact, but I’m troubled about aspects of this compact. We should have been given the opportunity to fix the most egregious problems,” Geller told the Phoenix. “I was ranking member of gaming for years [top-ranking Democrat on committees that deal with gambling]. It’s not like they pulled the wool over our eyes. There just wasn’t any interest in looking at the solutions we offered.”
“For one thing: 30 years? That’s ridiculous,” Geller said, arguing that 20 years is plenty long for a contract, because so much can change from one decade to the next.
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