Florida's Complicated Legal Sports Betting Push

The road to legal sports betting in Florida has been plagued by lawsuits, regulatory hurdles, and overall delays.

As of this week, sports betting is legal in the state thanks to the U.S. Department of the Interior officially signing off on the language of a new Tribal compact between the state and the Seminole Tribe in August. But things are still quiet from a potential legal sports betting scene.

"The final approval of this historic gaming compact is a big deal for the State of Florida. This mutually beneficial agreement will grow our economy, expand tourism and recreation and provide billions in new revenue to benefit Floridians," said Gov. Ron DeSantis during a summer news conference.

Now we're at the end of October and there still hasn't been a legal sports bet placed in Florida. Week 8 of the NFL season is just upon us and we are in the shadow of a slew of record handles reported from participating U.S. legal sports betting states.

Where that leaves the overall Florida scene is still up in the air.

The Power Lies With the Seminole Tribe

Lawsuits against what some perceive is a virtual Seminole Tribe monopoly on Florida's legal sports betting scene have come and gone. But, it seems that actual wagers are still in the distance. What has become clear is that the Seminole Tribe holds the key to a sports betting platform in Florida. According to the law, all sports wagers in the state will come "exclusively by and through" books that have ties to the Seminole Tribe and their Hard Rock brand.

The Seminole Tribe has the power to partner with pari-mutuels such as racetracks and will, from all reports, do so. The Seminoles have been granted permission to pursue sports betting platforms including retail and mobile.

The Sticking Point

One potential sticking point lies in conjunction with the mobile side of the proposed platform. "The Tribe and State refer to this arrangement as a 'hub and spoke' model, where the Tribe's servers are the hub, and the spokes are the mobile devices and contracted Qualified Pari-mutuel Permitholders facilities where the wagers originate," according to the Department of the Interior’s approval letter.

There has been a major challenge to the wording of the law. According to one argument, "sports bets initiated by persons located physically anywhere within Florida (or even outside the state) are 'deemed' to have occurred on Indian lands because the 'servers' and 'devices' purportedly receiving the bets are to be located on the Tribe's reservation. 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." Therefore, contrary to the legal fiction which was created by the 2021 Compact and Implementing Law, "a bet is placed both where the bettor and the casino are each located."

There is precedence, however. In Oklahoma, Tribes have sought and received permission to run mobile betting sites off their land. And in New Jersey, servers for mobile apps are all located in Atlantic City, not on-site at participating casinos.

Where the lawsuit goes is anyone's guess, but Florida-based Wallach Legal LLC founder Daniel Wallach feels he has a good argument dampening some of the power of the Seminole Tribe.

"The opponents to the compact are arguing that the state of Florida and the U.S. Department of the Interior exceeded their powers by approving internet-based sports wagering which definitionally is initiated and commenced, from the gamblers’ perspective, when he is outside of the Indian reservation," Wallach said in a recent interview.

What's on the Line

Florida boasts the third-largest population in the country (roughly 21.5 million) and is buoyed by an estimated 120 million tourists per year. Florida is home to three NFL teams, two MLB franchises, two NBA teams, and two NHL franchises, including the 2021 Stanley Cup champion Tampa Bay Lightning. All of them will benefit from the right to place a legal sports wager.

Revenues and jobs are also on the line for Floridians. It is expected that 2,200 jobs will result from a legal sports betting platform. Revenues will include $2.5 billion from the Seminoles to the State within the next five years. An estimated $500 million to $600 million per year could be generated for the state from the launch of a legal sports betting platform.

Past Due

Following the acceptance of the new Tribal compact for Florida this past summer, Oct. 15 was identified as the hopeful launch date. That date has obviously come and gone with no real timeframe insight.

Legal fights take time and there are currently multiple challenges before Florida courts. Nov. 5 has been set aside as a date for oral arguments for one such case with a decision hopeful within 10 days after that. With appeals almost certain, a launch date could realistically be pushed back until the end of 2021.

DraftKings and FanDuel have their own objections to the structure of the proposed Florida legal sports betting platform - one that the Seminoles are fighting as well.

"Obviously, we're going to protect our home turf," Hard Rock International Chairman Jim Allen said. "We certainly think that once all the court cases are decided, then we'll have a better barometer, if you will, as to how to deal with referendums from potentially our competitors, or in some cases potentially partnerships, or potentially doing it on our own."

Translation: It may be some time before Florida becomes the biggest single sports betting market in the U.S. Anxious bettors are the victims, once again, of the legal wrangling taking place in their own state.