The Seminole Hard Rock Hotel and Casino in South Florida is the center of the tribe’s efforts to begin online sports betting.getty images
The Seminole Tribe’s Hard Rock Sportsbook app opened for business in Florida suddenly at the start of November, without any advance ad campaign or countdown clock, taking its first bets only three days before attorneys would argue whether that was legal or not.
It went dark just as suddenly on the first weekend of December, its plug pulled by a federal judge who rejected the tribe’s argument that a bet made on its site takes place on servers on tribal land, even if that wager was placed from an iPhone in Boca Raton.
There is well-established U.S. precedent that says bets placed from a location in which betting is illegal are illegal, regardless of where the entity taking the bet is located. Yet when Florida Gov. Ron DeSantis announced a new gambling compact with the Seminoles in April, it included statewide rights to operate online sportsbooks, a curious expansion since sports betting remains illegal in Florida.
Federal law certainly allowed for the state to re-work the Seminoles’ gambling compact to allow for retail sportsbooks on tribal land. But how could the tribe take bets online, statewide, when sports betting is illegal in Florida?
Their workaround hinged on that premise that a bet placed on the Hard Rock app actually takes place where it is received — on a server on Seminole land.
It seemed a legal long shot. But both the state and tribe were comforted by a safety net written into the compact. If the courts wouldn’t let the Seminoles book sports bets, the tribe still could keep other crucial additions to their casino portfolio. The state would see payments from the tribe, guaranteed to be at least $2.5 billion over the next five years, reduced by only 10%.
Unfortunately for both parties, the judge’s ruling went beyond sports betting to invalidate the entire new compact. After continuing to take bets for 10 days while appealing a denied stay request, the tribe shut down the site. It has appealed, but a ruling is not likely to come for at least six months.
Bettors received this message after the app was suspended.
Those even casually acquainted with U.S. gambling law had to scratch their heads when DeSantis announced his coups, fast-tracking online sports betting in a state that seemed destined to wait until at least the 2023 football season — and possibly later — for it to reach the ballot, pass and be implemented. Established U.S. gaming law, known as the Indian Gaming Regulatory Act (IGRA), restricts tribal betting to tribal land.
The Seminoles’ approach seems a moonshot until you consider what is at stake here for the tribe, which sought to gain a first-mover advantage in what will be a Goliath-sized market. Under the compact, the Seminoles agreed to offer sub-licenses to the state’s parimutuel facilities, but under pricey terms, taking 40% of revenue.
Nothing about IGRA itself prohibits tribes from offering statewide online sports betting. Michigan and Arizona both developed models in which tribes in those states do so, most often in partnership with now well-established U.S. sportsbook operators. Arizona dedicated half of its 20 statewide online licenses to pro teams and facilities, but required that each pair with a tribe. Michigan made online licenses available to all its tribal casinos.
“IGRA is intended to place the tribes on equal footing with commercial operators,” said Daniel Wallach, a South Florida-based gambling attorney who has made sports betting his focus. “It was never intended to be a vehicle through which to create statewide monopoly rights over forms of gambling that do not take place on Indian land, and to the exclusion of everybody else. It has been perverted into this vehicle which has been weaponized by the Seminole tribe.”
The tribe and Hard Rock Digital declined an interview request, citing the ongoing nature of the appeal.
With the Hard Rock app suspended, the most likely path for Florida legalization is through a ballot initiative, the first of which was launched soon after the legislature blessed the tribal compact in June. Funded by $10 million each from FanDuel and DraftKings, the ballot measure would allow retail and online sports betting, with licenses available through parimutuel operators, sports facilities, commercial casinos and tribes. The Seminoles gave $10 million to a group opposing the initiative.
To crack the 2022 ballot, the group must round up 891,589 verified signatures by Feb. 1. At the start of December, longtime DraftKings and FanDuel lobbyist Jeremy Kudon said the group would have to add about 80,000 signatures a week to make it, a pace that he thought was achievable. Passage would then require 60% of the statewide vote in November.
“In a world where there is no mobile sports betting, it may be easier to get to 60% (with the ballot initiative) than it is if it’s existent,” said Kudon, chair of the public policy group at law firm Orrick. “I could be wrong about that. Some of this is guesswork. But I do think the two are tied.”
Even if sports betting manages to pass in 2022, that does not necessarily equate to a turnkey opening. There still would be the matter of the legislature crafting a framework and adopting regulation, and regulators approving operators.
Louisiana and Maryland went down similar paths in November 2020. Retail betting has opened in Louisiana, but online may not be up in time for the Super Bowl. Maryland hopes to open retail in time for the NFL playoffs, but doesn’t expect to get apps up before the second quarter of next year.
On that timeline, best case in Florida would be to open in time for the 2023 NFL season, but even the Super Bowl might be a reach.
“I look at it less as a matter of time and more a matter of that time giving rise to what is probably the most optimal solution in the long run,” Wallach said. “In this case, the path of least resistance legally and the one that is the best for the state moving forward are one and the same thing.”