Federal Judge rules against new Florida sports betting model

According to a report from Newsweek, Federal District Court Judge Dabney Friedrich ruled in favor of the two pari-mutuel facilities that filed a federal lawsuit against the state, arguing that the new sports betting model violated the Indian Gaming Regulatory Act, among other legal standards.

The Havenick family, which owns Bonita Springs Poker Room and Magic City Casino, filed suit over the sports betting aspect of the compact at both the state and federal levels. The arguments were basically identical, but while the case was tossed out at the state level, Friedrich agreed with them in federal court.

The suit claims that the ‘hub-and-spoke’ model violated IGRA and flew in the face of a 2018 ballot initiative supported by the Seminoles which forced any gambling expansion in the Sunshine State to be voted on by the citizenry. Friedrich agreed on both counts.

The IGRA states that gamblers must be on tribal land when placing a bet. With the model laid out in the compact, the Seminole Tribe would act as the sports betting hub for the state and would operate the only online sportsbook in the state. The legal team for the Havenick-owned pari-mutuels argued that since online bettors don’t have to be on tribal land, the structure violated federal standards.

Lawyers for the Tribe said that since the bets were being processed through servers on tribal property, it was in accordance with the IGRA. Friedrich didn’t believe that to be the case.

“When a federal statute authorizes an activity only at specific locations, parties may not evade that limitation by ‘deeming’ their activity to occur where it, as a factual matter, does not,” read a part of Friedrich’s ruling.

“Last night’s ruling was a victory for family-owned businesses like ours who pay their fair share in taxes and believe the free market should guide the business operations of gaming venues,” said a Magic City Casino spokesperson in a statement. “We look forward to working with the Governor, Legislature, and the citizens of Florida to pave a path forward that ensures a fair gaming marketplace exists in Florida.”

The Seminole Tribe began filing the appeals paperwork Tuesday afternoon and will likely fight this ruling as high as it can possibly go.

The ruling comes several weeks after the Seminoles launched its online sports betting app, the Hard Rock Sportsbook. According to local media, the app is still operational as of Tuesday evening.

As part of the compact, the Tribe was given the right to expand its gaming options and spread Class III gaming like craps and roulette. Since Friedrich ruled that the entire compact violated the ballot initiative passed in 2018, the ruling also prohibits the Seminoles from implementing those games, at least temporarily.

This isn’t the only legal battle the Seminole Tribe is fighting over the new agreement. In September, an anti-gambling group also filed suit in federal court over the expanded casino gaming at Seminole-owned casinos. While the pari-mutuels were only protesting the sports betting models, they helped score a major legal victory for the group.

Under the current sports betting model, the tribe would have a monopoly on mobile and online betting, and any pari-mutuel that wants to offer a brick-and-mortar sportsbook would have to do so as a contracted vendor of the Seminole Tribe. The pari-mutuel would pay 40% of its sports betting revenue to the tribe and keep 60% for itself. The tribe would take care of all tax payments to the state.

The tribe announced partnerships with five pari-mutuels to open sportsbooks, but none were open prior to Tuesday’s ruling.