Bets off: Judge overturns deal allowing online sports betting in Florida

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TALLAHASSEE – A federal judge Monday night overturned Florida’s gambling compact with the Seminole Tribe, ruling the sports betting plan violated the state constitution and federal Indian gambling law.

The tribe, through its attorneys, filed a notice of appeal Tuesday afternoon, court records show.

For now, the action by U.S. District Judge Dabney Friedrich, an appointee of former President Donald Trump, would halt the tribe’s online sports betting, which had just launched on Nov. 1. The tribe has been running its operation through its Hard Rock Sportsbook.

In her ruling, the Washington, D.C.-based judge decided that allowing such betting to take place from any laptop or smartphone – but completed through servers on tribal land – violated terms of IGRA, the Indian Gaming Regulatory Act.

What we know: Sports betting in Florida through the Seminole Tribe is shut off for now

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The ruling sides with Magic City Casino in Miami-Dade County and Bonita Springs Poker Room in Southwest Florida, whose owners challenged the gambling deal signed into law by Gov. Ron DeSantis, after it was approved by state lawmakers in a special session of the Legislature in May.

The pari-mutuels argued that the sports betting proposal was a “legal fiction,” because federal law does not authorize betting that occurs off tribal lands.

They also contended the deal's “hub-and-spokes” system, in which the tribe allows Florida gamblers to make bets on their smartphones to computer servers on tribal property, would have a “significant and potentially devastating impact on their own gambling operations."

In doing so, the state was trying to create a legal loophole, their lawyers argued.

"Last night’s ruling was a victory for family-owned businesses like ours who pay their fair share in taxes and believe the free market should guide the business operations of gaming venues," said Christian Ulvert, spokesperson for Magic City Casino. "The judge clearly understood the blatant violation of IGRA as her ruling demonstrates.

"We look forward to working with the Governor, Legislature, and the citizens of Florida to pave a path forward that ensures a fair gaming marketplace exists in Florida."

Deal guaranteed billions for state of Florida from gambling

The 30-year compact the state agreed to with the Seminole Tribe was to bring at least $2.5 billion in revenue into the Florida treasury over the next five years. DeSantis said he expected the federal government to appeal the ruling.

But the governor also acknowledged that the approach the state was advancing in the compact — allowing sports betting to take place anywhere, but go through tribal computer servers — was "an unsettled legal issue."

"We anticipated that this could happen," DeSantis said during an appearance in Fort Lauderdale, echoing earlier comments by state Rep. Randy Fine, the Brevard County Republican who chaired this year's House Select Committee on Gaming, and others.

The governor didn't indicate that the state would engage in any other immediate effort to revive sports betting. Short of winning an appeal, sports betting could be approved by Florida voters in a constitutional amendment, DeSantis noted.

Neither the tribe nor the state was a named party in the lawsuit against the compact, in which U.S. Interior Secretary Deb Haaland was the defendant.

“We are reviewing the court’s perplexing ruling, which certainly contains appealable issues," DeSantis press secretary Christina Pushaw said later Tuesday in an email. “Because neither the Seminole Tribe nor the State of Florida are parties to the case, it is unclear what if any immediate impact the ruling has in Florida. We look forward to working with the Tribe to ensure the future success of the Compact.”

The Interior Department, which oversees IGRA, had approved Florida’s compact. The Justice Department, which represented Interior in the case before Friedrich, is expected to appeal her ruling and likely ask that online gambling continue pending the final outcome of the case.

Three other gambling measures already in the works

Attorneys for the federal authorities had argued before Friedrich that what Florida had come up with was a “permissible hybrid approach” that was not explicitly prohibited.

Short of an appellate victory, proponents of online gambling face longer odds.

Florida voters in 2018 approved a constitutional amendment giving voters the “exclusive right to decide whether to authorize casino gambling,” in the state.

There are three gambling measures already underway that are attempting to collect the close to 900,000 petition signatures needed to get on the ballot next fall.

One of them, financed by the betting platforms DraftKings and FanDuel, had opposed the Seminole compact and wants a big share of Florida sports betting. Some of the revenue generated would go to education under the proposal.

"Now is the time for all entities to come together so we may provide a competitive legal sports betting market for Floridians, while generating the expected hundreds of millions of dollars in annual revenues for the Florida Educational Enhancement Trust Fund," said Christina Johnson, spokeswoman for Florida Education Champions, the political committee behind the effort.

John Kennedy is a reporter in the USA TODAY Network’s Florida Capital Bureau. He can be reached at jkennedy2@gannett.com, or on Twitter at @JKennedyReport

This article originally appeared on Sarasota Herald-Tribune: Florida's sports betting deal with Seminole Tribe struck down by judge