May 20, 2024

Florida sports gambling fight heads to U.S. Supreme Court

TALLAHASSEE — Arguing that the outcome of the case could represent a “blueprint for expanding gaming outside of Indian lands,” a Florida pari-mutuel owner plans to ask the U.S. Supreme Court to weigh in on whether a multibillion-dollar deal giving the Seminole Tribe control of sports betting throughout the state violates federal law.

A Washington, D.C.-based appeals court last week refused to reconsider a ruling by a three-judge panel that found the 2021 agreement did not violate the federal Indian Gaming Regulatory Act, or IGRA, which regulates gambling on tribal lands.

But a motion filed Friday by West Flagler Associates and Fort Myers Corporation, a corporation doing business as Bonita Springs Poker Room in Southwest Florida, argued the decision conflicts with other appellate rulings and “enables an extreme shift in public policy on legalized gaming that, once started, may be difficult to stop.”

The three-judge panel’s June 30 ruling reversed a November 2021 decision by a federal judge who halted a 30-year gambling agreement signed by Gov. Ron DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola Jr. and approved by the state Legislature.

West Flagler Associates and the Bonita Springs pari-mutuel --- owned for many years by the Havenick family --- challenged the sports-betting part of the deal, alleging it violated federal law and would cause a “significant and potentially devastating impact” on their operations. At the time the lawsuit was filed, West Flagler Associates owned Magic City Casino in Miami but has since sold it to PCI Gaming, which is not a part of the litigation. West Flagler Associates continues to have an interest in other Florida gambling operations, including jai alai.

Friday’s motion came after the U.S. Circuit Court of Appeals for the District of Columbia rejected the plaintiffs' request for a full-court hearing to reconsider the panel’s ruling. The gambling operators are asking that the panel decision be put on hold while they seek Supreme Court review.

The panel ruling “presents an important question” for the high court “as to the scope of the Indian Gaming Regulatory Act” and mobile sports betting, lawyers for West Flagler Associates and Fort Myers Corporation argued in the document filed Friday.

A “hub and spoke” mobile sports-betting plan in the Florida deal would allow gamblers anywhere in the state to place bets online, with the wagers run through servers located on tribal lands. The deal, known as a compact, said bets “using a mobile app or other electronic device, shall be deemed to be exclusively conducted by the tribe.”

Washington, D.C.-based U.S. District Judge Dabney Friedrich Friedrich called the setup a “fiction” and also invalidated other parts of the compact. The judge’s November 2021 ruling found that U.S. Interior Secretary Deb Haaland was wrong when she allowed the deal to go into effect. The Department of the Interior, which oversees tribal gambling, appealed Friedrich’s decision.

The three-judge panel’s unanimous ruling in June, however, said Friedrich erred when she found the compact violated the federal law.

The federal law “does not prohibit a gaming compact — which is, at bottom, an agreement between a tribe and a state — from discussing other topics, including those governing activities ‘outside Indian lands,’” the panel’s decision said.

But Friday’s motion argued that the ruling conflicted with other appellate decisions on the interpretation of the federal law.

The panel “held that a tribe and state may use the process set forth in IGRA to grant exclusive statewide internet gaming franchises to Indian tribes,” the motion said.

“This understanding contradicted Congress’ clear intent in enacting IGRA which was to provide for gaming ‘on Indian lands,’ not to provide a means to introduce internet gaming statewide,” Hamish Hume, a partner with the Boies Schiller Flexner LLP firm who represents West Flagler Associates and Fort Myers Corporation, wrote.

Hume also argued that the panel decision also authorized Haaland to provide approval to types of gambling “even where — as here — the law of the state prohibits the type of gambling in question” when conducted off of tribal lands.

“These holdings depart from all other courts’ interpretation of IGRA and allow for its misuse in a manner that Congress did not and could not have intended. As such, it raises a ‘substantial question’ warranting Supreme Court review,” Hume wrote.

Hume urged the appellate court to issue a stay blocking the panel’s decision, pointing in part to an amendment in the Florida Constitution that requires a statewide vote for expansions of gambling.

Allowing the compact to go into effect “will upset the status quo in the entirety of Florida” and have a far-reaching impact, Hume wrote.

“Moreover, the panel opinion’s unprecedented interpretation of IGRA may well be used by other states and tribes as a blueprint for expanding gaming outside of Indian lands where such gaming generally is not permitted in a state. The panel opinion thus enables an extreme shift in public policy on legalized gaming that, once started, may be difficult to stop. It therefore is in the public interest to preserve the status quo with respect to online gaming until such time as the Supreme Court has had a chance to review appellees’ (the pari-mutuels’) petition for a writ of certiorari,” he argued.

Along with giving the Seminoles control over online sports betting, the compact allowed the tribe to offer craps and roulette at its casinos. Also, the deal would allow the Seminoles to add three casinos on tribal property in Broward County.

In exchange, the tribe pledged to pay the state a minimum of $2.5 billion over the first five years and possibly billions of dollars more throughout the three-decade pact. The deal also added Florida to numerous states that jumped into sports betting after a 2018 U.S. Supreme Court ruling that cleared the way for such wagering in New Jersey.

The Seminoles briefly rolled out the Hard Rock SportsBook mobile app amid the legal wrangling but stopped accepting wagers and deposits on the app in December 2021 after Friedrich’s ruling.

Critics of the compact have argued that the sports-betting arrangement would not comply with a 2018 constitutional amendment that requires statewide voter approval of gambling expansions in Florida.

The appellate panel’s June decision did not opine on whether the compact violated the amendment, which was backed by the group No Casinos. No Casinos and prominent South Florida businessmen Armando Codina and Norman Braman filed a separate federal lawsuit challenging the compact.

Eugene Stearns, an attorney who represents No Casinos and the businessmen, told The News Service of Florida on Monday that his group does not plan on waging a legal challenge in state court over the Seminoles’ gambling deal.

“The reality is, (mobile) sports betting is now ubiquitous,” said Stearns, who is chairman of the Stearns Weaver Miller firm’s board of directors. “To me, that ship has sailed.”

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