Online Sports Betting Loses Big In Florida…For Now

Matthew Benedict – Betting on sports is ingrained in human culture with roots dating back to the gladiators of Roman times. Sports and betting have since evolved, offering gamblers the opportunity to bet on Super Bowls and hotdog eating contests alike. Until recently, the majority of sports gambling was conducted via illegal or offshore bookmakers due to federal and state prohibition. That changed in 2018 when the United States Supreme Court lifted the federal ban on sports betting in Murphy v. National Collegiate Athletic Association. Under Murphy, each state decides whether to legalize sports gambling within its’ borders. Like dominoes, states one-by-one have legalized sports betting with Florida emerging next in line. Now, more than three years after the U.S. Supreme Court lifted the federal ban on sports betting, efforts to bring legalized sports betting to the Sunshine State were halted when a district court vacated a compact between the Seminole Tribe and the state of Florida.

On November 22, 2021, the U.S. District Court threw out a 30-year gaming compact between the state of Florida and the Seminole Tribe, ending the hopes for in-person and online sports gambling until 2023. In its summary judgment order, the court noted that the decision does not foreclose other avenues for authorizing online sports betting in Florida. This could include the State and the Tribe agreeing to a new compact with Department of the Interior Secretary, Deb Halland’s, approval. Alternatively, Florida citizens may authorize betting through a citizens’ initiative. In the wake of the decision, the Seminole Tribe filed a notice of appeal and a stay to continue operating their online sportsbook, which had been functioning since early November. Both efforts have been denied and the Seminoles have since pulled their sports betting efforts as of December 4, 2021. An understanding of the stakes and players involved in the sports gambling industry will help explain why the Hardrock Sportsbook has been so hotly contested.

In April of 2021, Florida adopted legal sports betting via the New Seminole Compact. This decision came in the aftermath of the Seminole Tribe halting gambling revenue-sharing payments in 2019 due to a dispute over the former compact. Thus, Governor DeSantis struck a complex, billion-dollar deal with the Seminole Tribe to repair the relationship. Most notable was the Tribe gaining exclusive rights to operate sports betting in Florida. In exchange for this monopoly, the Seminoles were to disburse $2.5 billion to Florida’s education system over the first five years of the compact.

A seemingly win-win situation was met with much resistance from companies that were left without a piece of the ever-growing online sports-gambling pie. National gambling powerhouses DraftKings and FanDuel were the first to take an anti-compact stance. In July 2021, the two companies contributed $10 million to a political committee proposing a constitutional amendment in Florida that would legalize sports betting. That initiative will be put to vote in 2022 and could essentially negate the compact. In August 2021, two Florida-based commercial gaming operators known as West Flagler Associates sued the Department of Interior for passing the compact but that lawsuit was dismissed in  October 2021.

West Flagler argued that the compact impermissibly extends sports betting in Florida to any person located anywhere in the state. The challenge focused on the language in the Indian Gaming Regulatory Act that references gaming being conducted on tribal lands. West Flagler argued that because online gambling customers can be located in any part of the state these customers were not gambling on tribal land as required by the Act.  The suit was dismissed for lack of standing to sue the governor or Secretary of the Interior because the plaintiffs did not establish that they had been harmed.

The anti-Compact camp has won in the short term with the Seminole Hardrock Sportsbook shutting down amidst controversy and legal challenges. What lies ahead for citizens and bookmakers is likely another six months to a year without sports betting, as the Seminole Tribe works its way through the appeals process. If the Seminole Tribe’s effort fails, FanDuel and Draft Kings may be next in line to roll out legal online sports betting in Florida if their ballot passes in November 2022. Ultimately, the citizens will have to wait to get their sports betting fix and the state will continue to miss out on a substantial portion of revenue. Sports betting lost big…for now.

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