Magic City Casino owners sue to invalidate Seminole Tribe’s sports betting deal

The lawsuit, filed Friday in U.S. District Court for the Northern District of Florida by the Havenick family’s West Flagler Associates and Bonita-Fort Myers Corporation — also known as Southwest Parimutuels — argues that the agreement authorizing sports betting outside of tribal lands in Florida is in violation of the Indian Gaming Regulatory Act (IGRA) and asks the court to enjoin implementation of sports betting.

Florida legislators ratified the compact signed by Gov. Ron DeSantis and Seminole Tribe Chairman Marcellus Osceola Jr. during a three-day special session in May, allowing Florida to join dozens of other states in offering sports betting and opening the door to the broadest expansion of gambling in Florida in a decade. In exchange, the Tribe will guarantee at least $500 million in annual revenue payments to the state for the next 30 years.

Under the deal, anyone in Florida over age 21 can start placing and collecting online wagers on sporting events “via the internet [or] web application” from anywhere in Florida beginning on Oct. 15. All transactions would go through servers located on tribal land in a “hub and spoke” model intended to bypass both federal and state law, which both deem sports betting in Florida illegal.

“While we are fully supportive of Gov. DeSantis and his work to secure a new Seminole Compact, the lawsuit focuses on a very narrow aspect of the Compact — the legality of off reservation and online sports wagering,’’ said Isadore Havenick, vice president for public affairs for Southwest Parimutuels.

The company argues that it will “lose millions in revenue” due to the competitive advantage this gives the Tribe “because individuals in Florida can now gamble from the comfort of their homes, which will significantly, if not completely, impair Southwest Parimutuels’ ability to compete with the Tribe.”

The compact allows sports bets at six of the Tribe’s reservations but permits Florida’s existing racetracks and jai-alai frontons to develop their own mobile apps and to conduct off-reservation sports bets if they are chosen by the Tribe as its partners. The parimutuels would then be allowed to take 60% of the proceeds from each bet with the Tribe receiving the remaining 40%.

QUESTION OVER ‘TRIBAL LAND’?

At issue is a provision in the deal that says that a bet is “deemed” to be placed on the Tribe’s land because of the location of the server. The lawsuit argues that arrangement contradicts the Indian Gaming Regulatory Act, the Wire Act and the Unlawful Internet Gambling Enforcement Act (UIGEA), as well as court decisions interpreting those laws.

“’Deeming’ the bet to have been placed on Indian lands because the servers are located there contradicts decades of well-established precedent interpreting applicable federal law’’ reads the 67-page complaint. “Contrary to the legal fiction created by the 2021 Compact and Implementing Law, a bet is placed both where the bettor and the casino are each located.”