Appeals court weighs sports betting fight
The Biden administration and the Seminole Tribe of Florida on Wednesday urged a federal appeals court to overturn a ruling that blocked a deal that would give the tribe control over sports betting in the state.
But a lawyer representing a Florida gambling operator argued it would be a “cruel joke” if the court reverses the decision.
The deal, signed by Gov. Ron DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola, Jr. and ratified by the Florida Legislature in a special session last year, opened the door for the first time to sports betting in the nation’s third-largest state.
Owners of Magic City Casino in Miami-Dade County and Bonita Springs Poker Room in Southwest Florida filed a lawsuit alleging the sports-betting plan violated federal laws and would cause a “significant and potentially devastating” impact on the pari-mutuels’ businesses.
The “hub-and-spoke” sports-betting plan was designed to allow gamblers throughout the state to place bets online, with the bets run through computer servers on tribal property. The deal, known as a compact, said bets made anywhere in Florida “using a mobile app or other electronic device, shall be deemed to be exclusively conducted by the tribe.”
But U.S. District Judge Dabney Friedrich in November 2021 ruled that the plan ran afoul of the federal Indian Gaming Regulatory Act, which regulates gambling on tribal lands, because it would allow gambling off property owned by the Seminoles.
The Washington, D.C.-based Friedrich, calling the setup a “fiction,” also invalidated other parts of the compact, finding that Interior Secretary Deb Haaland erred when she allowed the deal to go into effect in summer 2021.
A three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia on Wednesday heard arguments in appeals filed by the state and the Seminoles.
Rachel Heron, an attorney for the Interior Department, said Haaland “did act lawfully” by allowing the compact to go into effect.
“The district court’s contrary conclusion was based on an error of law, although admittedly a relatively narrow one,” Heron said.
The arguments also touched on an issue about whether the compact violates a 2018 Florida constitutional amendment that requires statewide votes to expand gambling.
“What the federal government can say is that the compact they actually crafted, whatever the parties’ intent may have been, is properly read to be consistent with IGRA (the Indian Gaming Regulatory Act), is properly read not to circumvent state law or attempt to use IGRA as a ground for independently authorizing off-Indian-land gaming, and if the state statute that is related to this action were to be challenged in Florida state court and were to fail, the compact that they crafted would make no independent authority for the tribe to continue to receive bets from outside Indian lands,” Heron said.
“So you categorically reject the contention of West Flagler (the owners of Magic City Casino and Bonita Springs Poker Room) that the secretary has to make a determination that the compact complies with Florida state law?” asked Judge Robert Wilkins.
“That’s correct,” Heron responded.
In their appeal, attorneys for the Seminoles argued that Friedrich was wrong to not allow the tribe to intervene in the pari-mutuels’ legal challenge. The tribe, which sought to have the lawsuit dismissed, has cited a right to sovereign immunity that helps shield it from lawsuits.
Throughout Wednesday’s arguments, Wilkins repeatedly asked what the court should do about the issue, if Friedrich’s ruling is tossed.
“If, for the sake of argument, we agree with the government on the merits, would the appropriate resolution on the intervention issue be to dismiss that (the Seminoles’) appeal as moot?” he asked Heron.
“There is a sovereign’s interest in not having an issue decided in the sovereign’s absence,” Heron said.
Barry Richard, who represents the tribe, said the Seminoles “will not have heartache” if the court decides to reverse Friedrich’s ruling.
But, he argued, “tribal immunity is an overwhelmingly significant issue and it needs to be given primary consideration.”
Richard said Friedrich erred by striking down the entire compact and refusing to address the immunity issue.
“You cannot adjudicate a significant interest of the sovereign authority in its absence, which is what the court did here,” he argued.
Hamish Hume, who represents the pari-mutuels, argued that the compact violated the federal law because it authorizes the tribe to accept wagers “whether the gamblers are located on or off Indian lands when they place their bets.”
The law “does not authorize the secretary to approve such a compact,” he said. “Instead, it requires the secretary to disapprove that compact because it sought to authorize gambling off Indian lands.”
But Wilkins appeared unconvinced.
“Then why isn’t that dispositive? The government says that it’s disclaiming that it’s authorizing what you think that this compact authorizes,” the judge said.
“Because, Judge Wilkins, they’re trying to have it both ways,” Hume replied.
The federal agency is asking that Friedrich’s decision be reversed but at the same time saying it could not authorize gambling that occurs off tribal lands, Hume argued.
“What they’re saying makes no sense. And if this court accepts their argument, it would be a cruel joke,” Hume added. “They’re trying to get you to send us back to Florida with an IGRA compact that has a giant rubber stamp saying ‘approved under IGRA.’ … If you are remotely tempted to accept their argument, I beg you, make it crystal clear that your order says this secretary’s approval does not in any way authorize the gambling that takes place off Indian land.”
In addition to seeking to give the Seminoles control over sports betting, the compact called for allowing the tribe to offer craps and roulette at its casinos. Also, the Seminoles would be allowed to add three casinos on their property in Broward County.
In exchange, the tribe pledged to pay the state a minimum of $2.5 billion over the first five years and possibly billions more over three decades. The deal sought to add Florida to other states that have jumped into sports betting since a 2018 U.S. Supreme Court ruling that cleared the way for such wagering in New Jersey.
Gambling experts throughout the country are closely watching the appeals court’s decision.
“After today’s oral argument, the notion of legal sports betting in Florida as early as 2023 may not be so far-fetched,” attorney Daniel Wallach, a gambling expert, tweeted.