TAMPA, Fla. — About an hour had passed since Hard Rock International Chairman Jim Allen concluded a ceremony marking a so-called “New Era of Seminole Gaming” in front of Elvis Presley’s gold piano.
Craps and roulette tables being used for the first time at Seminole Hard Rock Hotel & Casino were bustling with imported celebrities and Seminole Tribe officials throwing down cash and curious on-lookers nudging through the crowded atrium.
The makeshift retail sportsbook of televisions and kiosks wasn’t seeing as much action, and the full-time version behind the escalators leading upstairs to the Pool Bar & Grill had yet to be discovered by most.
A 20-something with a group of co-workers — judging by their matching uniforms — stopped a man in a blazer at the top of the escalators asking for directions to this sportsbook. They had breezed right past it on their way up.
Informed that it was just kiosks, teller windows, and some screens, they headed outside to the pool deck for lunch and to watch games on big screens and bet on their Hard Rock Bet apps.
All of this had to be right on script for this “new era,” with the Seminole Tribe using an Oct. 25 Supreme Court decision to, as Seminole Gaming chief operating officer David Hoenemeyer told Gaming Today, “cross the Rubicon” and re-launch mobile betting in Florida, and roll out retail wagering, craps and roulette for the first time since it gained their exclusive rights in a 30-year compact with the state in 2021.
Long Route to the Craps, Roulette Tables, and Betting Kiosk
Sports betting would be the shiny thing familiar to most. Betting on apps and online has become the American appetite, with about 90% of sports wagers placed that way in the 26 states that have legalized mobile sports betting.
But it is considered a low-margin “amenity” to the gambling industry. Vegas-style casino table games like craps and roulette are money-makers.
After curating three similar ceremonies at the Seminoles’ South Florida casinos the previous day — and with two left after the Tampa stop — Allen’s voice was hoarse.
In a way, it symbolized the negotiating, lobbying, and litigating that marked the past two years. After a 33-day run of mobile sports betting late in 2021, West Flagler Associates and the Bonita Springs Poker Room had convinced a federal judge to shut down the operation as beyond the legal bounds of the Indian Gaming Regulatory Act.
Those Florida parimutuels won a series of legal victories against the Department of the Interior — which manages tribal gambling compacts — until the US Court of Appeals, DC Circuit declared the operation legal in June.
A complicated series of machinations continues in the US and Florida Supreme Courts. But on Oct. 25, when the US Supreme Court declined to extend a prohibition on the launch of sports betting in Florida, the Seminoles felt comfortable enough to risk the bad publicity of another future shutdown versus the opportunity at hand.
With former pro wrestler Ric Flair “wooo!-ing” somewhere around a craps table and retired NFL quarterbacks Joe Theismann chatting with Doug Flutie by the roulette wheels, Gaming Today spoke with Allen about getting to this era and what’s next, including online casino and competition in Florida from daily fantasy sports.
Jim Allen on Next Phase, Online Casino and DFS Competition
During the event, I had the opportunity to speak with Hard Rock CEO Jim Allen. He shared insights on the future of sports betting in Florida, the Seminole Tribe’s monopoly, and more.
On Seminole Gaming’s Sports Betting Legal Footing:
JIM ALLEN: I think we will always be respectful to the judicial process. So certainly someone could file a new lawsuit. Then we’ll obviously deal with those, with a conclusion of the one that’s in the state Supreme Court and we’ll see where, where it goes.
On the Timing of Mobile Re-Launch:
JIM ALLEN: The plaintiffs were trying to stop us from launching and the court ruled 100% in our favor that they couldn’t do that. Certainly, they have the ability that they can file another appeal to the actual merits of the case. But once we had that in place, we know that process will take at least a year or two. So that’s when we determined we wanted to move forward.
Weighing the Risk of Possibly Having Sports Betting Shuttered Again:
JIM ALLEN: It’s really important to be humble on this topic. The first time the case was really heard … because the original decision was a lower court, and frankly, that wasn’t even what was petitioned in front of that judge.
She [Judge Dabney Friedrich] did us a favor by throwing out the compact completely.
And that shouldn’t have happened because there is a severability clause in the compact. The compact should have stayed legal, but the sports betting — if she wanted to do something — could’ve excluded that. So very politely, she just got it all wrong. And we knew that. So when it got to a real court, in Washington, all the way up to the appellate court in the DC circuit, they obviously ruled all in our favor. And then the plaintiffs took it, tried to take it to the full circuit, and they all ruled in our favor.
So we could still lose. There’s no doubt about that.
But, certainly, we’ve had five decisions now that have worked, and that people think what we did between the state, governor, the House, the Senate, the Department of Interior, the Department of Justice, the [National Indian Gaming Commission], we’re all unified in one opinion. The one thing I can tell you, we certainly talk to all of the major players in this space and it is unanimous. I do not have one of the other big companies that don’t believe in our legal position. Not one. Now that doesn’t mean a judge won’t rule against it, right?
On Critics of the Seminole Tribe’s Florida Gambling Monopoly:
JIM ALLEN: I think if you look at the past, we are so proud of our relationship with the parimutuels today. We went to every single one of them in the state. We said we’d love to have them part of the hub-and-spoke. Right now about 16 of them have said they want to do something with us. So number one, that’s very important. But historically they made promise after promise after promise to the state about gambling. And they were never able to get it to the finish line. We’ve committed billions upon, billions upon billions of dollars, not only met every one of those obligations but actually exceeded them. So, in order for us to resume our revenue share, we said we would love the opportunity of sports betting. That resumes over $650 million a year in land-based revenue share in the state of Florida. So economically, there’s no deal in the country that has that type of commitment from one single entity.
On the Resumption of Revenue-Share Payments at $650 Million Yearly:
JIM ALLEN: When this dispute started over two years ago, we were only paying the state $380-something million a year. But we have doubled the business during that period. And the state’s obviously aware. Let’s bond the partnership. Let’s move forward. This facility will do $3-4 million a month, and the busiest one does $11 [million]. So we’re not saying we’re better than them, but we’ve built a product that is a different product. But we’ve also said we want to work with all that.
Parimutuel Deals Grew From Five to 16:
JIM ALLEN: We have letters, agreed upon on financial terms with about 16. We have to work through all the platform stuff. They can brand it 100% [to their venue]. And all their customers in a certain radius or they have in that area, that’ll go to them and be part of their revenue. However, the bet needs to come back here to our servers. … Geographically, we tried to assign zip codes so they get the full credit for their customer base.
On Florida’s Stance on Prop-Style Daily Fantasy Sports:
JIM ALLEN: The compact allows for the existing scope of fantasy to not be an exclusion or a default. So if DraftKings and FanDuel continue to do what they’re doing, we’re fine with that. So that’s category one. We have no issue with that whatsoever. But certainly what Betr and Underdog and others like them are doing is flat-out illegal. There is no way around it. Eleven other states have declared exactly what they’re doing as illegal and we support the Florida Gaming Commission and the Attorney General in pursuing that.
Is Online Casino the Next Logical Ambition for Hard Rock in Florida?
JIM ALLEN: Certainly, we’re not at that particular point right now. But as we look at the country, that is now starting to become legal. But we have to get through this. We have to make sure this all works.