US Supreme Court declines to hear Florida sports betting case

It's likely the end of the road for WFA's case as the Seminole tribe can continue operating its sportsbook product in Florida, closing the door for commercial operators.

On Monday (17 June) morning, the US Supreme Court denied the writ of certiorari (court process to seek judicial review of a decision) in the the Florida sports betting case filed by West Flagler and Associates (WFA). The decision means that digital sports betting can remain live in Florida. From here, WFA could again try to pursue its case through the Florida state court system.

In March, the Florida Supreme Court said it would not hear WFA’s quo warranto bid, calling it the wrong “vehicle” for the Florida sports betting case. The decision left the door open for WFA to re-file in a lower Florida court.

The case was first filed in federal court in the second half of 2021. At the federal level, WFA has now exhausted all routes.

“The Seminole tribe of Florida applauds today’s decision by the US Supreme Court to decline consideration of the case involving the tribe’s gaming compact with the state of Florida,” tribal spokesman Gary Bitner said in a statement. “It means members of the Seminole tribe and all Floridians can count on a bright future made possible by the compact.”

One answer, but many more questions

Under the terms of the compact, the Seminoles must pay the state of Florida $2.5bn per year for the first five years of the 30-year deal.

The Supreme Court of the United States (SCOTUS) decision to not hear the Florida sports betting case may have wider-reaching ramifications, as other tribes determine how to apply it. The decision essentially leaves in place and validates a compact that makes a hub-and-spoke model for wagering acceptable.

WFA also argues that the compact stretches the bounds of the Indian Gaming Regulatory Act (IGRA).

Language in the 2021 compact allows for bets from anywhere in Florida to be considered placed in Indian country if they flow through a tribal server. WFA contend that the IGRA never contemplated digital gaming and therefore cannot be applied to off-reservation bets.

“This may close one door, but still leaves open several that are already open and a host of others that could open,” gambling consultant Brendan Bussmann of BGlobal told iGB. “If today was about finding answers, it only brings more questions as it relates to Florida as well as how this could apply to tribal nations throughout the rest of the country.”

At least one justice favoured hearing case

According to the Supreme Court statement, Justice Brett Kavanaugh “would grant” the petition. It’s not the first time Kavanaugh showed interest in the case.

Prior to filing its brief, WFA asked SCOTUS to put a stay in place to keep the Seminoles from offering legal wagering. When the court denied that request, Kavanaugh wrote that he agreed with his fellow justices “in light of the DC Circuit’s pronouncement that the compact between Florida and the Seminole tribe authorises the tribe to conduct only on-reservation gaming operations and not off-reservation gaming operations.”

But, he wrote, “If the compact authorised the tribe to conduct off-reservation gaming operations, either directly or by deeming off-reservation gaming operations to somehow be on-reservation, then the compact would likely violate the Indian Gaming Regulatory Act, as the District Court explained.”

The US Supreme Court could have granted certiorari for three reasons:

1. If a lower-court decision conflicts with other federal decisions on the same issue;
2. If a lower-court decision is in conflict with a previous SCOTUS decision; or
3. If there is no resolution to a significant question of federal law.

WFA argued that the IGRA does not govern wagering outside of Indian Country. In its initial SCOTUS brief, WFA cites the jurisdictional case Michigan vs Bay Mills Indian Community among others as an example of federal courts interpreting that IGRA’s powers are limited to tribal lands.

The US Court of Appeals for the District of Columbia ruling to allow the 2021 compact remain in force, WFA wrote, is in conflict with those decisions.

Here’s what’s at issue in Florida sports betting case

When WFA filed its writ of certiorari, it sought answers to three questions from the US Supreme Court:

1. Does IGRA allow for the approval of a compact that gives the Seminoles a monopoly and allows them to offer online sports betting on and off tribal lands?
2. Does the 2021 compact violate the Unlawful Internet Gambling Enforcement Act?
3. Did US Department of the Interior Secretary Deb Haaland “violate the equal protection principles?”

WFA argues that Haaland approved a compact that gives the Seminoles a monopoly in a state where anyone else offering online sports betting would be breaking the law.

WFA attorney Hamish Hume wrote in his SCOTUS brief that when Haaland allowed the 2021 compact to be deemed approved, she used a “back door” to legalise an activity banned by the state constitution. He argued that his clients would “suffer competitive injury” should the Seminoles continue to be allowed to offer digital wagering.

Hard Rock platform relaunched in November

The tribe launched its Hard Rock Bet platform on 7 November 2023. It was the second time in two years that the Seminoles went live. The first time was in November 2021 while US District Court Judge Dabney Friedrich was still considering the case.

Friedrich ultimately found in favour of WFA and Friedrich ordered the tribe to take down its platform. But it wasn’t until the appellate court upheld Friedrich’s mandate that the Seminoles shuttered the platform.

They stayed offline as the US District Court of Appeals for the District of Columbia considered the case. A three-judge panel overturned the lower-court ruling in June 2023. But when they did, Kavanaugh offered an opinion that opened the door for WFA to file its case with SCOTUS and the Florida Supreme Court.

He wrote that the compact “would likely violate the Indian Gaming Regulatory Act” and that the state law allowing a Seminole monopoly “likely raises serious equal protection issues”.

Different issues in question at state level

The questions are different from those that were asked at the state level. In its filing with the Florida Supreme Court, WFA was able to address the contents of the compact. It also asked whether Governor Ron DeSantis and the legislature abused their power by approving the compact.

In addition, the question of whether or not the state of Florida violated Amendment 3 is in play. WFA argued in its brief to the Florida Supreme Court that any expansion of gaming must go to the voters. This one did not.

“Today’s decision does not prevent Florida’s card rooms from pursuing their challenge that the compact violates Florida’s Proposition 3, which requires that the people of the state approve any expansion of gaming,” tribal attorney Scott Crowell told iGB. “The decision of the Florida Supreme Court earlier this year denying their writ petition does not prevent the card rooms from filing in Florida’s lower trial courts.

“Moreover, even if the card rooms would prevail in the state court action, any adverse judgment could be cured by a state-wide election on a compact that brings billions of dollars into Florida’s state treasury.”

Partnering with Seminoles would be costly

The 2021 compact all but prohibits commercial operators like BetMGM, Caesars Sportsbook, DraftKings, Fanatics Sportsbook and FanDuel from doing business in Florida. In order to operate in Florida, any other commercial operator could partner with a pari-mutuel.

But the fees outlined in the compact are astronomical. There is also the possibility that in order for bets to be considered placed where they are received, other commercial operators would have to put their tech stack onto a Seminole server.

Under the compact, the state’s pari-mutuels do have the option to partner with the Seminoles. To do so, they would be required to pay the tribe 60% of revenue.

That “tax” is higher than the highest tax rate among states that allow legal commercial sports betting. New Hampshire, New York and Rhode Island all charge operators a 50% tax rate.

Original Article