Florida Cardroom Seminole Sports Betting Lawsuit Should Be Tossed, Says Interior Dept.

Posted on: October 14, 2021, 12:56h. 

Last updated on: October 14, 2021, 01:14h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

The US Department of the Interior (DOI) has asked a federal judge in Washington, D.C. to dismiss a lawsuit brought by two Florida card rooms. The suit seeks to halt the rollout of sports betting in the state.

Magic City, Florida sports betting
Magic City, pictured, and the Bonita Springs Poker Room claim the DOI should not have approved the Seminole compact, which they contend will cause them “economic injury.”

Wagering on sports becomes legal on Seminole tribal lands from tomorrow, per a new compact negotiated between the tribe and Florida Gov. Ron DeSantis.

Gamblers will have to wait, though. The tribe has said it is not ready to open any sports books just yet, and has set no date for a rollout. Meanwhile, several legal challenges seek to torpedo the process entirely.

West Flagler Associates and Southwest Florida Enterprises own Magic City Casino and the Bonita Springs Poker Room, respectively. They’ve filed a lawsuit against DeSantis and another against the DOI, claiming the compact violates federal and state laws.

The compact is controversial because it ostensibly permits sports betting to take place outside of tribal land, via mobile apps controlled by the Seminoles.

It also allows sports betting at card rooms and pari-mutuel venues through revenue sharing partnerships with the tribe. Most pari-mutuels are against this, arguing the 60/40 split in the tribe’s favor would be uneconomical for them.

Known Unknowns

In its lawsuit against the DOI, the two cardrooms ask for a summary judgment on the compact’s legality and an injunction to prevent the Seminoles from launching sports betting. They argue the Seminole-controlled expansion of gaming will cause them “economic injury.”

But in its motion to dismiss, the DOI was unmoved by this argument.

[The plaintiffs seek] injunctive relief, on the basis that, if the online sports betting contemplated by the Compact is implemented by the Tribe and the State, they may possibly suffer some unspecified economic injury at some unknown point in the future, even though they have the option to partner with the Tribe to offer and profit from such sports betting themselves,” wrote the DOI in its motion to dismiss.

The department also was scathing about a survey the card rooms conducted to demonstrate they would lose customers if the Seminoles were permitted to proceed. The DOI called out its “flawed” methodology, and “biased, leading, or ambiguous questions.”

“Even if such proposition were accurate, and it is not, the fact that such dire forecast is not enough to incentivize Plaintiffs to join with the Tribe to offer those customers such gaming opportunity illustrates that it is not the … approval of the Compact that is the source of Plaintiffs’ purported future injury, but rather Plaintiffs’ own choice.

“…Plaintiffs cannot establish standing based on injuries of their own making,” it added.

Equal Protection

The card rooms’ claim that the compact violates the equal protection clause of the US Constitution also falls short, according to the DOI. The plaintiffs argued it established “different treatment for gaming facilities on the basis of race, tribal affiliation, and national origin,” creating a “state-wide, race-based monopoly.”

But the DOI argued the equal protection claim fails because the plaintiffs are not similarly situated to the tribe and there is no fundamental right at issue.

Moreover, there is a “well-established and long-recognized rational basis for Congress to enact laws that promote the self-government and economic self-sufficiency of federally recognized Indian tribes,” the DOI wrote

“Simply put, the Equal Protection Clause does not protect Plaintiffs from increased market competition, and thus the Court must dismiss Plaintiffs’ constitutional claim,” it added.

‘Abuse of Discretion’

Ultimately, the plaintiffs believe the department should have torn up the compact, claiming it had a “legal obligation” to do so. They said approving it was “arbitrary, capricious, an abuse of discretion, and not in accordance with law.”

But in its motion to dismiss, the DOI said it had taken no action on the compact during the statutory 45-day review period, as it is expressly permitted to do by IGRA. After this period, the compact was “deemed approved” under federal law, “but only to the extent the compact is consistent with the provisions of [IGRA].”

Which means if any of the provisions are contrary to IGRA, as the plaintiffs contend, then the DOI did not approve them.

After a compact becomes “deemed approved,” the department is merely required to publish notice in the Federal Register, which it did.

“Thereafter the Secretary had, and continues to have, no role whatsoever with respect to the Compact or how it might be implemented,” the DOI wrote.

This language suggests the federal government has little appetite to intervene in Florida’s plans to roll out sports betting.