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Q&A – Online Sports Betting Is Live In Florida - Will It Stay That Way?
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Today’s entry: @brianmuddradio If Seminoles have sovereign immunity and they’re already live with sports betting why even bother with the pari-mutuels & legal issues?
Bottom Line: On back of the Seminoles having launched online sports betting this week, you’ve raised an interesting point. One that perhaps was part of the Seminoles plan all along. First, let’s take a step back and look at what’s happened. Earlier this year, the state legislature held a special session to ratify the newly negotiated Compact between Governor DeSantis and the Seminole Tribe. As part of that agreement:
- Outstanding gaming violations of the existing Seminole compact would be settled with existing non-tribal operators able to operate as they have been
- Sports betting would be enabled
- The Seminoles would oversee all sports betting operations in Florida, receiving 10% of the net winnings of all other participating operators
- The Seminoles would be able to partner exclusively with an out-of-state online sports betting service
- An estimated increase in annual revenue to the state from the Seminoles totaling $500 million - $150 million over the previous agreement which hadn’t been paid out since 2018
The creativity involving sports betting was the key to the deal. The Seminoles get a piece of all sports betting in the state in exchange for dropping all existing grievances with operators of other gaming services, often at tracks, across the state. That’s happening as the Seminole’s agreed to sports betting terms with five pari-mutuel's last week. It was 2018’s Amendment 3 which created the need for the Seminoles to run sports gambling in the state. Under 2018’s Amendment 3, voters would have to directly approve gaming changes in the state. However, the Seminole’s Tribal Immunity potentially allows them to avoid 2018’s Amendment 3. That’s also where existing legal challenges begin to come into play.
You’d asked why the Seminoles would even bother with 3rd parties if they in essence could operate a sports betting monopoly. Who knows, maybe that was part of their plan all along. Many wondered why the Seminoles agreed to a new compact, which they didn’t have to do, that included paying $500 million annually to the state of Florida, which they hadn’t been doing. There’s little doubt this sports betting dynamic played significantly into that consideration. To your point though, it hasn’t been settled in the courts. Sovereign Immunity likely insulates the Tribe’s sports betting operations from 2018’s Amendment 3. What’s less clear, is how 3rd party operators using the Tribe’s facilitation of services will fare legally. The state wanted two key considerations from the Seminoles in the new compact. To settle outstanding issues with other gaming operators in the state and $500 million annually in revenue. The Seminole’s have held up their end of the bargain. That includes the first monthly payment to the state of Florida.
Notably, when looking at what’s happened with sports betting in Florida thus far, the Seminoles have moved forward with their own operations, however other than the recently struck deals with the 5 pari-mutuels there’s no indication they’ve ramped up for facilitating services for third parties. It’s possible the Seminoles have operated in good faith under the new compact with the expectation the courts might cut off the ability for 3rd parties to operate under 2018’s Amendment 3 leaving them as the only game in town. At a minimum, that was likely part of the greater consideration for the Tribe. There is one other legal dynamic the Seminoles probably can’t avoid, even with Sovereign Immunity and that’s the just launched online betting.
While Sovereign Immunity likely protects what happens on their own property with sports betting operations – they don’t own the internet. Just as you can gamble onsite at the Tribe’s casinos but you can’t gamble online because that’s federally illegal... The backers of Amendment 3, will advance the argument that online sports betting which occurs outside of the Seminole’s property, isn’t legal. With legal challenges still to be settled at the federal and state level there’s a lot that’s yet been sorted out and some of which the Seminoles likely can’t avoid.
For now, what we know is that if you’d like to participate in online sports betting, you can. Will it stay that way? To be continued...