The new Seminole gambling compact was challenged by a lawsuit filed by one of the oldest pari-mutuel companies in Florida, which is alleging that the sports betting component of the agreement violates federal law because its sports betting component is based on a legal fiction.
On July 2nd, West Flagler Associates and Bonita-Fort Myers Corp., which is also known as Southwest Parimutuels, filed a lawsuit in the US District Court for the Northern District of Florida, with the legal action arguing that the deal between the state and the tribe breaches the Indian Gaming Regulatory Act. Now, the lawsuit asks the court to suspend the implementation of sports betting.
The Seminole Tribe compact, which was signed by the tribe’s Chairman Marcellus Osceola Jr. and Governor Ron DeSantis, was ratified by Florida lawmakers during a special 3-day legislative session in May. Under the provisions of the agreement, sports betting would finally come to the state in the largest gambling sector expansion in Florida in a decade. In return for the right to offer sports betting services, the Native American nation is expected to make annual revenue payments of at least $500 million to the state over the upcoming 30 years.
Under the compact, Florida residents over the age of 21 would be able to place bets on sports teams online from anywhere in the state starting from October 15th. The service processing the transactions would be located on tribal land.
Legal Action Argues the Seminole Tribe Compact Violates Three Pieces of Legislation
After filing the lawsuit, the vice president for public affairs for Southwest Parimutuels, Isadore Havenick, explained that the company remains supportive of Governor DeSantis’ work to secure a new agreement with the Seminole Tribe of Florida, and the legal action is focused on a very specific aspect of the compact – the legality of off-reservation and online sports betting services. According to the company, the fact that people will be able to gamble from literally anywhere in the state will considerably affect its competitiveness to the tribe, costing it millions in revenue.
Under the provisions of the agreement, local residents would be able to place sports wagers at six of the Tribe’s reservations. The existing racetracks and jai alai frontons will be able to develop their own mobile betting applications and offer off-reservation sports betting services in case they are chosen by the Seminole Tribe as its partners. In such cases, pari-mutuels would be permitted to take 60% of the proceeds generated by each bet, with the remaining 40% set to be received by the Native American tribe.
The service provision in the deal has been considered a controversial issue, because a bet is considered placed on the Tribe’s land due to the server location even when customers have wagered online. The newly-filed legal action argues that the arrangement between the state of Florida and the Tribe violates the Wire Act, the Indian Gaming Regulatory Act and the Unlawful Internet Gambling Enforcement Act. The lawsuit also claims that the compact breaches court decisions interpreting the aforementioned pieces of legislation.
The lawsuit challenges the Seminole compact, saying that while the state of Florida may enter into such an agreement with a Native American tribe to legalize gambling, such services are required to be offered on Indian lands under the provisions of the Indian Gaming Regulatory Act. On the other hand, the federal Wire Act of 1961 bans the use of interstate commerce of illegal transactions, with the lawsuit also arguing that the agreement also violates the Unlawful Internet Gaming Enforcement Act by permitting the Seminoles to offer betting services outside of their tribal lands.
