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TALLAHASSEE – One of Florida’s oldest parimutuel companies, owners of Miami’s Magic City Casino and the Bonita Springs Poker Room, has filed a federal lawsuit challenging the Florida gaming contract between the state and the Seminole Tribe of Florida based on “legal fictions “That violate federal law.
The lawsuit filed Friday in the US District Court for the Northern District of Florida by West Flagler Associates of the Havenick Family and Bonita-Fort Myers Corp. – also known as Southwest Parimutuels – argues that the agreement authorizing sports betting outside of Florida tribal areas is in violation of India’s Gambling Regulation Act and is asking the court to prohibit the conduct of sports betting.
Florida lawmakers ratified the treaty signed by Governor Ron DeSantis and Chairman of the Seminole Tribes, Marcellus Osceola Jr., during a three-day special session in May that allowed Florida to join dozens of other states to offer sports betting and open the door for the widest expansion of gambling in Florida in a decade. In return, the tribe guarantees the state at least $ 500 million in annual income for the next 30 years.
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Under the agreement, anyone in Florida over the age of 21 can begin placing and collecting online bets on sporting events “over the Internet” [or] web application ”from anywhere in Florida starting October 15th. All transactions would go through servers located on tribal land in a “hub-and-spoke” model designed to circumvent both federal and state laws that both hold Florida sports betting illegal.
“While we fully support Governor DeSantis and his work to secure a new Seminole Pact, the lawsuit focuses on a very narrow aspect of the pact – the legality of online sports betting outside of reservation and online sports betting,” said Isadore Havenick, Vice President for Public Affairs of Southwest Parimutuels.
The company argues it will lose “millions” in revenue “because Florida individuals can now play from the comfort of their homes, significantly, if not entirely, affecting the Southwest Parimutuels’ ability to compete with the tribe.” becomes”.
The Compact allows sports betting in six of the tribe’s reservations, but allows Florida’s existing racetracks and Jai-Alai frontons to develop their own mobile apps and conduct off-reservation sports betting if they are selected as partners by the tribe. The Parimutuels would then be allowed to take 60 percent of the proceeds from each bet, while the tribe receives the remaining 40 percent.
Question about “Tribal Land?”
A controversial provision in the agreement states that a bet is “considered” to be placed in the country of the tribe based on the location of the server. The lawsuit argues that the agreement is contrary to the Indian Gaming Regulatory Act, the Wire Act, and the Unlawful Internet Gambling Enforcement Act, as well as court decisions interpreting those laws.
“To believe that the bet was placed on Indian land because the servers are located there contradicts decades of proven precedents for the interpretation of applicable federal law,” says the 67-page complaint. “Contrary to the legal fiction created by the Compact and Implementation Act 2021, a bet is placed where the bettor and the casino are located.”
According to the lawsuit, the hub-and-spoke model violates Indian gambling regulation law because the state can enter into a contract with a tribe to authorize gambling, but it must be done “on Indian land”. The law describes this as “all land within the boundaries of an Indian reservation” or land held in trust by the United States for the intended benefit of the Indian tribe.
In addition, the lawsuit argues that the deal violates the Federal Wire Act of 1961, which prohibits the use of interstate commerce for illegal transactions, and violates the Unlawful Internet Gaming Enforcement Act by allowing bets to be placed outside of tribal areas .
Gary Bitner, spokesman for Seminole Gaming, defended the company’s compact and quoted surveys.
“The Gaming Compact is fully compliant and supported by Floridians 3-1,” he said. “It guarantees a revenue share of US $ 2.5 billion in the first five years, the largest game company engagement in US history.”
The governor’s office did not respond to requests for comment.
Federal review is still pending
The deal is awaiting approval from the US Department of the Interior, which has 45 days from the date the contract is presented to make a decision. A governor’s spokesman said the contract was sent to the agency on June 3, but the lawsuit says it was formally submitted to the DOI on June 21.
The tribe is also facing threat from a constitutional amendment to the 2022 vote proposed by two of the best sports betting platforms in the country, FanDuel and DraftKings, that would allow online sports betting in all parimutuels in Florida, professional sports stadiums and everywhere else in the region State through a mobile sports betting platform.
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When debating the Pact in May, lawmakers anticipated the legal challenge due to the unprecedented nature of the hub-and-spoke model.
“As we have said from day one, and as the parties have considered, this is an open question,” said Rep. Sam Garrison, a Republican from Fleming Island and attorney during the House of Representatives debate. “There is no black and white answer as to whether the hub-and-spoke model will be approved or not”,
Rep. Randy Fine, a Palm Bay Republican and former gambling manager, told colleagues during the floor debate that he did not believe the sports betting component would survive but argued that the deal was still good for the state due to a severability clause be the contract, with the tribe being allowed to continue the other provisions of the agreement and paying the state a corresponding amount.
In addition to running bank card games including baccarat, chemin de fer, and blackjack in the tribe’s seven Florida casinos, the Compact allows the tribe’s Hard Rock casinos in Broward and Hillsborough to add roulette and craps, giving them full Las Casinos in Vegas. Style.
The court could separate the sports betting component from the gambling deal, and the tribe would reduce its annual revenue share with the state by about $ 100 million, according to Jim Allen, CEO of Seminole Gaming.
Who is the “target audience”?
However, legal scholars say the court could come up with another alternative: invalidating the hub-and-spoke model but allowing the tribe to continue monopoly sports betting.
“If a federal court were to find that the non-reservation elements of the pact violated the IGRA’s ‘Indian Land’ requirement, then the severability provision would allow the Seminole tribe to operate sports betting on Indian land while the Parimutuel operators do it lose restricted rights to participate, ” said Daniel Wallach, a gambling advice attorney who has studied Florida laws.
Wallach argued that the timing of the lawsuit mattered as the severability clause “is only triggered by a judgment of a federal court and has no applicability if the federal agency rejects the contract”.
“Therefore, the intended addressee of this ‘pre-approval’ lawsuit could very well be US Secretary of the Interior Deb Haaland in order to persuade her to reject the pact and thus prevent the severability clause of the pact from going into effect and a brick-and-mortar – -Mortar monopoly on Indian land, ” he said.
West Flagler Associates and its subsidiaries have been owned and operated by the Havenick family for over 65 years when the family’s patriarch, Isadore Hecht, bought Flagler Greyhound Park in the early 1950s. Magic City Casino claims to have 425 employees.
Wallach said that because the Havenicks are a competitor to the tribe, they have the reputation of challenging the pact. He predicts that they will prevail.
“This is a slam dunk case as long as there is a willing plaintiff with ‘authority’ to sue,” he said. “Magic City took its best shot today. And I don’t think they will miss. You have a solid housing. “
The pact was negotiated with the tribe by the governor and, along with concerns about its legality, withheld resistance from many Conservative MPs who traditionally viewed sports betting as a risky addition to gambling.
The governor and Lt. Gov. Jeanette Núñez campaigned aggressively for the move as the governor vetoed hundreds of bills in the $ 110 billion budget. The House of Representatives approved the deal 97-17 and the Senate approved 38-1.
The lawsuit finds that when Congress passed the Indian Gaming Regulatory Act, Congress determined that “Indian tribes have the exclusive right to regulate gaming activities on Indian land unless the gaming activities are expressly prohibited by federal law and conducted in a state who does not do this, for criminal and public reasons, prohibit such gaming activities. “
The lawsuit states that since Florida law prohibits any expansion of gambling without the consent of the statewide voter, the pact is “an attempt to circumvent that clear prohibition in the state constitution” by having “a person at home on their deck chair sitting by the pool or on her couch ”. Placing a sports bet on the tribe is not considered to be placing a bet that is otherwise illegal in the state. “
It goes on to say, “This is nothing more than legal fiction, disproved by the fact that sports betting still takes place outside the tribe’s reservations in a state where sports betting remains illegal.”
