A federal appeals court has ruled that the Seminole Tribe of Florida is free to offer sports betting as long as wagers flow through servers on tribal land. Credit: Getty Images
The Seminole Tribe of Florida could be free to offer statewide electronic sports betting in time for the fall resumption of college and professional football due to a ruling by a federal appeals court in Washington, D.C.
The U.S. Court of Appeals for the District of Columbia Circuit on June 30 approved Florida’s 30-year gambling compact with the Seminole Tribe of Florida, including language that allows statewide sports betting via cellphones and other electronic devices as long as the bets are channeled through servers on tribal land, an arrangement described as “hub and spoke.” The deal promises to return $2.5 billion to the state during the first five years.
D.C. Circuit rules provide that the outcome will become final 52 days after it was handed down, or on Aug. 21, Bob Jarvis, professor of constitutional law at Nova Southeastern University Shepard Broad School of law and author of a textbook on gambling law, told the Phoenix in a telephone interview on Monday.
The rival gambling interests that challenged the law in federal district court in D.C. may turn to the state’s courts to block the Seminole Gaming Compact that Gov. Ron DeSantis signed into law in 2021, but Jarvis doesn’t think they’ll succeed.
“Eventually the Seminoles will win that state lawsuit and then they would have cleared out both any federal objection and state objection. So, the Seminoles will have sports betting. The state of Florida wants them to have sports betting. It’s going to happen. It’s just a question of when,” he said.
Another question is whether the state courts will allow sports betting to commence pending a ruling on the merits in any state challenge. The federal courts paused that betting while they decided the merits of the case but the state courts aren’t obliged to do likewise. One factor driving that decision will be whether any lawsuit is likely to succeed in blocking sports betting.
“Every day that goes by, the bets that would have been placed on that day can never be gotten back if they are not placed,” Jarvis said.
‘Hub and spoke’
The tribe wasn’t saying much about the development. Gary Bitner, spokesperson for the Seminoles, released a written statement reading the day the ruling came down, “The Seminole Tribe of Florida is pleased with today’s unanimous decision. It is a positive outcome for the Seminole Tribe and the people of Florida, and for all of Indian Country. The Tribe is fully reviewing the decision to determine its next steps.”
Hamish Hume, a D.C. attorney representing plaintiffs West Flagler Associates Ltd. and Bonita-Fort Myers Corp., respectively a casino and a poker room operator, didn’t respond to requests for comment.
The Florida Gaming Control Commission issued a written statement on Tuesday welcoming the ruling. “The judgment confirmed the legality of the 2021 Gaming Compact between the Seminole Tribe of Florida and the state of Florida which both modernizes gaming in Florida and extends the relationship between the State and the Tribe for years to come,” it reads.
Requests for comment lodged with FanDuels and DraftKings, major sports betting companies, were referred to the Sports Betting Alliance, which declined comment on the record.
Jeremy Redfern, DeSantis’ press secretary, did issue a statement on Tuesday.
“While we are not surprised the lower court’s perplexing ruling was unanimously overturned, this is great news for Florida,” he said. “We will continue working with the Seminole Tribe of Florida to ensure the success of this historic compact — the largest gaming compact in U.S. history — which will lead to over $20 billion in revenues for the people of Florida.”
John Sowinski, spokesperson for Florida’s No Casinos organization, which opposes sports betting and contributed a friend-of-the-court brief in the legal dispute in the federal case, issued a statement vowing not to give up.
“This decision will not be the final word on this issue. The will of the people will be respected, and the Florida Constitution requires that Florida Voters, not politicians and lobbyists in Tallahassee or Washington, have the final word on gambling authorization,” he said.
At issue was whether the federal Indian Gaming Regulatory Act, or IGRA, allows the “hub-and-spoke” arrangement provided for sports betting under the compact — meaning that bets placed off tribal land, even hundreds of miles away, would be deemed to have been placed on tribal land because the servers are located there.
IGRA — passed after the U.S. Supreme Court ruled in 1987 that states couldn’t interfere with gambling on tribal lands — allows tribes to work out gambling agreements with states, and specifically in this case to allow sports betting on tribal lands, the court said.
The law is silent, however, regarding arrangements like hub-and-spoke in the Seminole Compact, the court added.
“The compact does not say that these wagers are ‘authorized’ by the compact (or by any other legal authority). Rather, it simply indicates that the parties to the compact (i.e., the Tribe and Florida) have agreed that they both consider such activity (i.e., placing those wagers) to occur on tribal lands. Because the compact requires all gaming disputes be resolved in accordance with tribal law,” Circuit Judge John Wilkins wrote for a three-judge panel. (Parentheses in the original.)
“In reaching this narrow conclusion, we do not give our imprimatur to all of the activity discussed in the compact. And particularly, for avoidance of doubt, we express no opinion as to whether the Florida statute ratifying the compact is constitutional under [the Florida Constitution],” he continued.
U.S. Interior Secretary Deb Haaland had the power to quash the compact but instead allowed it to take effect without commenting on its merits.
No Casinos was the organization behind Amendment 3, the 2018 state constitutional amendment granting voters “the exclusive right to decide whether to authorize casino gambling” in Florida.
District of Columbia District Judge Dabney Friedrich struck down the deal on Nov. 23, 2021, and the D.C. Circuit refused in early December to allow sports betting to begin pending its final ruling. The tribe, which had already launched a sports-betting app, was obliged to put betting on hold. maybe that should be higher?
The full D.C. Circuit is unlikely to contemplate overturning the panel in a case with little connection to its jurisdiction, Jarvis said, especially given that elected tribal and state governments agree on allowing sports betting. Additionally, the U.S. Supreme Court has been extraordinary amenable to Indian rights in recent years, he added, and is unlikely to interfere with an agreement that benefit the Seminoles.
Even should that happen, Congress could be expected to amend the law to benefit the Seminoles, given that Indian tribes, rich with gambling earnings, are generous contributors to congressional campaigns, Jarvis said.
Amendment 3 investment
The Walt Disney Co. contributed $20 million to the Amendment 3 campaign, and the Seminoles $24 million, to ward off unwanted competition from outside gambling interests, as CNBC reported in 2018.
Amendment 3 “was written by the Seminoles to help them, so how could it now be that it is actually a roadblock to the Seminoles?” Jarvis said.
Additionally, the amendment applies only to casino gambling, defined as including any electronic gambling devices, simulated gambling devices, video lottery devices, internet sweepstakes devices, and any other form of electronic or electromechanical facsimiles of any game of chance, slot machine, or casino-style game.”
It gives examples such as blackjack, roulette, craps, and keno.
“Sports betting has never been a traditional casino gambling game,” Jarvis said, since it wasn’t even legal before the U.S. Supreme Court ruling.
“IGRA was passed in 1988. In 1988, we did not have the internet,” he observed. But the point of the law, which passed with a large bipartisan majority, was to lift Native Americans out of poverty while giving states some measure of control over gambling. Jarvis figures it makes sense to assume that Congress would have allowed sports betting had it existed at the time.
Moreover, the amendment specifies: “Nothing herein shall be construed to limit the ability of the state or Native American tribes to negotiate gaming compacts pursuant to the Federal Indian Gaming Regulatory Act for the conduct of casino gambling on tribal lands, or to affect any existing gambling on tribal lands pursuant to compacts executed by the state and Native American tribes pursuant to IGRA.”
Sowinksi, of No Casinos, emphasized language in the ruling stressing that the court was not judging whether Florida law allows the sports betting system contained in the compact.
“That question and any other related questions of state law are outside the scope of the [Interior] secretary’s review of the compact, are outside the scope of our judicial review, and as a prudential matter are best left for Florida’s courts to decide,” Judge Wilkins wrote.
Note: This story has been updated to include a statement from the Florida Gaming Control Commission and a no-comment from the Sports Betting Alliance.
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