Sports fans are cheering recent moves by the Florida Legislature likely paving the way for legal sports betting in the Sunshine State, but stakeholders on both sides are saying it’s too soon to pop the cork. Eye-catching headlines have cautioned not to bet on apps launching anytime soon, but it’s unclear to the average bettor what could be standing in the way of Florida sports betting becoming a reality.
The local Florida press has been awash with reports that the newly passed Florida sports betting bill could face a multitude of legal challenges. Although it is likely to end up in Federal court for a few reasons, one of the claims seems a bit confusing.
What makes Florida’s deal with the Seminole Tribe different from other similar compacts and arrangements in states where tribes are permitted to offer mobile betting off-reservation? Why are challenges expected against this particular tribe when other tribes in other states offer mobile betting with no similar challenges?
Florida Mobile Betting Off Of Tribal Lands
A common theme throughout much of the coverage on Florida’s plan is the fact the Seminole Tribe can’t offer betting of any kind off of tribal lands. This means a bettor using a DraftKings app operated by the Seminole Tribe at the bettor’s home in Key West would be betting off of tribal lands and therefore violate federal tribal gaming law, specifically the Indian Gaming Regulatory Act (aka IGRA).
But how are tribes operating in other states with mobile betting? How does a bettor using a DraftKings app operated by the Bay Mills Tribe in Michigan, using the app at their home in Detroit not violate the IGRA? What about someone using the Unibet App in Philadelphia, operated by Mohegan Sun in the Poconos? What about apps expected to launch soon to launch in Arizona and Connecticut?
Gaming Compacts And Betting Bills
Tribes operate retail and mobile betting apps in each state under various laws that govern both tribal and commercial gaming in the US. The most important law and the one mentioned most often concerning Florida is IGRA. This law, passed in 1988 and signed by President Ronald Reagan, regulates all gaming on tribal lands. There has been much said about the Florida bill violating the IGRA because it would allow gaming off of Indian lands, a key phrase in the IGRA.
In addition to IGRA, each state will have its own gaming compacts negotiated and revised over time. These compacts are agreements between the state and Native American tribes. For example, Arizona Governor Doug Ducey negotiated the 2021 Arizona Gaming Compact with various tribes in the state. Each gaming compact covers the definition of gaming, what gaming is permitted and where, and who has oversight over gaming in the state. Each of these gaming compacts must be approved by the US Department of Interior to ensure they don’t run afoul of numerous federal laws, including but not limited to IGRA. On May 24, DOI approved the Arizona Gaming Compact, paving the way for official legal betting in the Copper State.
The third type of law that governs betting in the US is state law. This includes all of the carefully crafted bills passed by various state lawmakers and signed off on by their respective governor, such as the recent bill given the OK by Governor Andrew Cuomo in New York. The state laws can permit both tribal and commercial casinos the opportunity to offer retail or mobile betting within the state’s borders.
Arizona Sports Betting Laws
The signing of the gaming compact amendment and its associated legislation is a culmination of years of partnership and engagement among many diverse stakeholders — and we did it by bringing everyone to the table, pushing individual agendas aside, and putting Arizona first. pic.twitter.com/0mPpEI1a9a
— Doug Ducey (@dougducey) April 15, 2021
Arizona looks to be one of the next big betting markets in the US. Legal sports betting will come to Arizona through two different legal documents. First, the state signed the 2021 Arizona Gaming Compact. Then, state lawmakers passed the 2021 Gambling Act (Arizona House Bill 2772), which Gov. Ducey signed on April 15. These two documents pave the way for tribes to offer retail betting on tribal lands as well as offer mobile betting off of tribal lands.
But how can they do this, if all the Florida press is expressing concern about their own compact? What makes Arizona different?
In Arizona, the answer is that these two agreements do work together to regulate mobile betting. The 2021 Arizona Gaming Compact expands the definition of Class III gaming to include sports betting, known as event wagering. These wagers can be placed at retail sportsbooks located on tribal land. The Gaming Compact does not regulate off-reservation event wagering, which means it doesn’t fall afoul of the IGRA. The US Department of Interior agreed by approving the Arizona Gaming Compact on May 24.
The 2021 Arizona Gaming Act allows both tribal and commercial entities to apply for licenses to operate mobile betting apps in Arizona. This state law permits the tribes to operate mobile betting off of tribal land. This is how various tribes in Arizona will be able to partner with top sports betting brands to offer mobile betting anywhere in the state. The ability to offer betting off of tribal lands falls within the scope of state law, not a gaming compact or the IGRA.
Then, what’s the deal with Michigan? How can a tribe like Bay Mills offer mobile betting in Detroit, off of tribal lands?
In 2019, lawmakers passed the Michigan Lawful Internet Gaming Act (the “LIGA”) and the Michigan Lawful Sports Betting At (Michigan House Bill 4916 or the “LSBA”). LIGA and LSBA permitted tribal casinos and commercial casinos to request licenses from the Michigan Gaming Control Board to operate mobile betting apps, as well as online casino and poker apps, anywhere within the state. This includes tribal casinos operating mobile apps off of tribal lands.
When Michigan legalized sports betting, there was no adjustment or renegotiation of the Michigan Gaming Compact. Tribes were unable to offer mobile betting off of tribal lands under their original compact. Instead, tribes were able to offer mobile betting under LSBA and based on licensure from the Michigan Gaming Control Board.
What’s Different About The Seminole Tribe’s Agreement With Florida
So, what’s so different about the legalization of sports betting in Florida that is causing such an uproar?
In 2018, Florida voters approved a measure giving them — and not the governor or lawmakers — the power to expand gaming in any way. The referendum resulted in an amendment to the Florida Constitution, referred to as Amendment 3. This means state lawmakers cannot pass a bill that expands gaming without the approval of voters in another referendum. This is one of the reasons why litigation is expected in the Sunshine State.
Florida Gaming Compact
I’m excited to announce the signing of a new compact between the State of Florida and the Seminole Tribe of Florida, which will generate the state $2.5 billion in new revenue over the next five years and $6 billion through 2030. https://t.co/6za6I0TmFz pic.twitter.com/uLV1YmsRkl
— Ron DeSantis (@GovRonDeSantis) April 23, 2021
Despite Amendment 3, or perhaps because of it, Florida Governor Ron DeSantis looked to expand gaming in Florida via a revised and updated Florida Gaming Compact. DeSantis celebrated the long-awaited negotiation of the Compact between the state and the Seminole Tribe. Under the Compact, the Seminole Tribe could offer retail betting on their lands, build new casinos, and offer mobile betting off of tribal lands. This includes the ability for non-tribal entities to launch mobile betting apps while giving the Seminole Tribe a cut of the profits for hosting the servers on their land.
Approving The Gaming Compact
Florida lawmakers met in a special session the week of May 17, 2021. The Florida House approved the Florida Gaming Compact in House Bill 1A. The Senate approved Senate Bill 2A the following day. These bills merely implement the 2021 Gaming Compact. They do not, in and of themselves, provide for sports betting under state law. That would be a violation of Amendment 3.
Therefore, Florida lawmakers are stuck between a rock and a hard place. Passing a Florida gaming bill would violate Amendment 3, therefore the only way that they can move forward on sports betting is to do so under a gaming compact. The Florida Gaming Compact, though, explicitly permits the Seminole Tribe to engage in mobile betting off of tribal lands, which could be a violation of IGRA.
Why Florida Is (Always) Different
Proponents of the revised compact point to the location of the servers that will host mobile betting being on tribal land to argue the compact pasts muster. Opponents of the bill say that the location of the server is irrelevant under federal law. Case law includes two federal cases, one from the US Supreme Court and one from the 9th Circuit, which held the betting occurs where the bettor is located.
This is how Florida differs from states like Michigan, Arizona, and others. Unlike other states that permit tribal casinos to run mobile betting off of tribal lands under state law, Florida is only allowing the Seminole Tribe to run mobile betting off of tribal lands under the IGRA – and that is explicitly not permitted under the IGRA.
Let the legal challenges begin.