Delivering a major victory for Governor Ron DeSantis and the Seminole Tribe, President Joe Biden’s administration cleared a 30-year gambling deal that gives the tribe control over sports betting in Florida. , paving the way for litigation over the deal that could reshape the state’s gaming footprint.
The Federal Bureau of Indian Affairs allowed a 45-day review period to elapse Thursday without taking any action on the deal, known as the pact. Under federal law, this means that the agreement is “considered to have been approved” but only “to the extent that the contract is consistent with the provisions” of federal law governing tribal games.
As part of the pact, the Seminoles will serve as the state’s hub for sports betting, with pari-mutuel operators contracting with the tribe. The deal requires the Seminoles to enter into a contract with at least three pari-mutuels within three months of putting sports betting online and does not allow the tribe to launch sports betting until October 15.
DeSantis and the president of the Seminole Tribe of Florida, Marcellus Osceola Jr., signed the agreement in April and the legislature approved the pact in a special session in May. The hub-and-spoke sports betting plan would allow Floridians and visitors from anywhere in the state to place sports bets using mobile phone apps, and the Seminoles would host the activities. of sports betting via computer servers on tribal lands.
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The provision – the first of its kind in the country – was seen by gambling experts as a major test of India‘s Federal Gaming Regulation Act, or IGRA, which was enacted before online gambling began. He forced federal regulators to decide whether sports betting made on cellphones or other devices outside of tribal lands complies with the 1988 law.
Although federal law did not contemplate activities such as sports betting or fantasy sports, “the evolution of technology should not be an obstacle for the tribes participating in the gaming industry,” Bryan wrote on Friday. Newland, Deputy Assistant Secretary for Indian Affairs at the Federal Department. in 12-page letters to DeSantis and Osceola.
The “pursuit of mobile gaming is in line with TLIG’s public policy considerations to promote tribal economic development, self-reliance and strong tribal governments,” Newland added.
“The ministry will not read into the IGRA the restrictions that do not exist. Accordingly, provided that a player is not physically located on the Indian lands of another tribe, a tribe should be given the opportunity to engage in this type of gambling in accordance with a Tribal State Gaming Pact. », He also wrote.
DeSantis welcomed the decision to allow the pact to enter into force.
“The final approval of this landmark gaming contract is a big deal for the state of Florida,” DeSantis said in a prepared statement. “This mutually beneficial agreement will grow our economy, expand tourism and recreation, and generate billions in new income for the benefit of Floridians.”
As part of the 30-year deal, the Seminoles agreed to pay Florida about $ 20 billion, including $ 2.5 billion in the first five years. The amount would drop by $ 50 million per year if the sports betting provision does not go into effect, essentially guaranteeing the state a minimum annual payout of $ 450 million.
The deal also gives the Seminoles advantages such as roulette and craps at tribal casinos.
“Today is a big day for the people of Florida, who will benefit from not only a five-year, $ 2.5 billion revenue sharing guarantee, but also sports betting across the country. State and new casino games that roll out this fall that will mean more jobs for Floridians, and more money invested in this state, ”Osceola said on Friday.
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The deal is already the subject of a federal lawsuit filed by two pari-mutuel establishments, and the tacit approval of the deal by the Biden administration is expected to face additional legal hurdles.
Perhaps more difficult legal issues could focus on a 2018 Florida constitutional amendment known as Amendment 3 that required voter approval for the expansion of gambling in the state. . Supporters of the constitutional amendment argue that sports betting that takes place outside tribal lands requires voter permission.
John Sowinski, president of the No Casinos group, said in a prepared statement that the pact “violates several federal laws as well as the Florida Constitution.”
“Only the voters of Florida, and not the politicians of Tallahassee or Washington, have the power to extend the game in Florida. This issue will find its way to state and federal courts, where we are confident that this pact will be overturned. We are committed to ensuring that the people of Florida always have the final say on gambling, as required by Florida Amendment 3, ”said Sowinski, whose group was behind on Friday. amendment.
Supporters of the pact, however, argue that sports betting would not require a referendum because bets would be executed through computer servers on tribal property.
While the Biden administration allowed the sports betting provision to go ahead, Newland flagged other parts of the deal, including the tribe’s revenue sharing agreement with the state.
“The department is concerned about the revenue sharing provisions in this pact and these provisions should not be viewed as a model that other states might generally impose on tribes,” Newland wrote. “However, we are convinced that the state concessions confer a substantial economic benefit to the tribe that justifies the proposed revenue sharing in this case, and that these conditions are the result of good faith bilateral negotiations.”
The provision requiring the tribe to contract with at least three pari-mutuel operators to market the Seminoles’ sports betting effort is also problematic, according to Newland.
Federal law requires tribes to have “the sole exclusive interest and sole responsibility for the operation of tribal gambling to ensure that it receives the primary benefit from its gambling revenues,” he wrote. .
The Seminoles must pay 60% of the difference between the net gain generated by any pari-mutuel contracted and the expenses of the tribe. But Newland wrote that the arrangement raises questions about the exclusive nature of the tribe’s sports betting operations.
“As a result, the department does not approve the pact’s commercialization deal,” Newland wrote.
The federal agency also expressed “significant concerns” about provisions giving the state jurisdiction over customer disputes and legal claims.
Legal claim jurisdiction “may violate the limited scope of civil jurisdiction” under federal law, Newland wrote.
“Covenants are not the appropriate vehicle for transferring jurisdiction over employer disputes and tort claims to the state,” he said. “Accordingly, we believe this provision is an unacceptable compact provision under the IGRA and is likely unenforceable.”
© 2021 The Florida Information Service. All rights reserved.
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