Lawmakers Pass Gambling Deal, Court Fight Likely
Despite concerns that a sports-betting provision might not withstand legal challenges, Florida lawmakers on Wednesday gave final approval to a 30-year deal with the Seminole Tribe that promises to rake $2.5 billion into state coffers over the first five years of the agreement.
The Florida House passed the measure (SB 2A) in a 97-17 vote on Wednesday, a day after the Senate approved it 38-1. Gov. Ron DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola Jr. reached the deal last month, but it needed legislative ratification. The Legislature began meeting in a special session Monday to consider the proposal, known as a “compact,” and a handful of other gambling-related measures, such as the creation of a statewide gaming commission.
Under the compact, the Seminoles will serve as the state’s hub for sports betting, with pari-mutuel operators contracting with the tribe. The deal requires the Seminoles to contract with at least three pari-mutuels within three months after sports betting goes live and does not allow the tribe to launch sports betting until Oct. 15.
DeSantis and Osceola tweaked the compact on Monday to assuage concerns by dozens of House Republicans who had balked at a provision that would have required the state to negotiate in “good faith” with the tribe about other online gaming within three years of the compact going into effect.
“Today, all the people of Florida are winners, thanks to legislative approval of the gaming compact between the state of Florida and the Seminole Tribe of Florida. It is a historic and mutually beneficial partnership between the state and Seminole Tribe that will positively impact all Floridians for decades to come,” Osceola said in a statement Wednesday after the House vote.
But even the proposal’s proponents, as well as a legal expert hired by House Speaker Chris Sprowls, acknowledged that the sports-betting provision, which would allow people to place wagers on their cell phones anywhere in the state, is not a sure bet legally. The U.S. Department of the Interior, which oversees tribal gaming, has 45 days following ratification of the compact to sign off on the agreement, reject it or allow it to go into effect without the agency’s approval. But perhaps more-difficult legal issues could center on a 2018 Florida constitutional amendment, known as Amendment 3, that required voter approval of gambling expansions in the state.
The amendment’s backers maintain that the legalization of sports betting off of tribal lands requires voter authorization. The compact’s supporters contend that sports betting would not require a referendum because bets would be run through computer servers on tribal property.
But Rep. Carlos Guillermo Smith, D-Orlando, scoffed at the argument during a House floor debate Wednesday.
“We are told it doesn’t violate Amendment 3 because it’s not an expansion of gambling because, of course, sports betting on our phone apps is happening through servers on tribal lands. LOL. Under that argument, can I open a slot machine operation in Orlando, so long as the physical slots are internet based and using servers on tribal lands? That wouldn’t be an expansion of gambling? Come on, y’all. We know better than this,” Smith said.
Some legal experts question whether federal law allows the state to enter into a compact that authorizes gambling off tribal lands, even if the technology handling wagering is located on the Seminoles’ property. Critics also fear that the Seminoles could be handed a lucrative monopoly if the federal government or courts decide that all sports betting has to take place at the tribe’s casinos.
“The question is, if the courts strikes it down, would the Seminoles be the only operator that could kind of have it at their facilities? The answer would be yes,” Sprowls, R-Palm Harbor, told reporters when asked about the issue following Wednesday’s floor session. Rep. Randy Fine, a Brevard County Republican who chaired the House Select Committee on Gaming, urged lawmakers to ratify the compact and pointed to the Seminoles’ planned payments to the state. Eight House Republicans and nine Democrats opposed the bill Wednesday.
If the sports-betting plan doesn’t meet legal muster, the tribe would continue to pay the state at least $450 million a year for the first five years of the compact. The bulk of the tribe’s revenue-sharing agreement with the state is derived from proceeds from its casino operations, which already include slot machines and banked card games such as blackjack. The compact allows the Seminoles to add craps and roulette.
“This is a good deal for our state,” Fine said. “Could we get a better deal? I don’t know. I like to think I could, sure. But I don’t have that choice. I have this deal, and a closer path to $1.5 million a day (in payments to the state).” But Fine conceded that the sports-betting arrangement might not hold up in court. “Personally, I don’t think it’s going to survive,” he said.
Rep. Sam Garrison, a Fleming Island Republican who co-sponsored the bill, acknowledged that the sports-betting provision will face legal challenges.
“It is an open question, and it’s going to have to be litigated because it is not a black-and-white answer,” Garrison, a lawyer, said.
John Sowinski, president of the group No Casinos and chairman of the political committee behind Amendment 3, called the compact the "largest expansion of gambling in Florida history" and vowed to challenge it.
"This fight is just beginning," he said in a prepared statement. "We are committed to ensuring that the will of the people, who voted by a remarkable 72 (percent) landslide to give Florida voters the exclusive right to authorize casino gambling in our state, will be respected." Sprowls, a lawyer, said he anticipates lawsuits but believes the compact will withstand the challenges.
“Obviously, having this kind of agreement, you’re navigating kind of the icebergs of legal hurdles,” the speaker told reporters.
Whether a lawsuit will be successful “is an open question,” Sprowls said. “You know, reasonable people disagree. Some people have looked at it and said, hey, I don’t think it’s gonna make it. I’ve looked at it. I think it will. The reality is that’s going to be resolved by a court."