DC Federal Court Invalidates Florida Sports Betting Compact

On Monday, November 22, a Washington, D.C. federal court vacated U.S. Interior Secretary Deb Haaland’s approval of the 2021 Florida-Seminole Tribal Gaming Compact (the Compact), thereby invalidating the Compact in its entirety. Because the Compact has been invalidated, Florida’s Seminole Indian Tribe (the Tribe) no longer has the right to conduct retail and online sports betting in Florida, nor can it offer the in-person craps and roulette games that had also been authorized under the agreement. As we reported previously, the legal controversy surrounding the Compact arose primarily from the provision authorizing the Tribe to accept mobile sports wagers initiated by patrons located within the state of Florida but outside of tribal lands, by “deeming” wagering initiated outside of tribal lands to occur at the Seminole’s tribal gaming facilities.

The court’s decision resolved summary judgment motions filed by plaintiffs in two separate actions challenging Secretary Haaland’s decision to approve the Compact by default earlier this year. The earlier-filed action was initiated by West Flagler Associates Ltd. (West Flagler), the owner of two Florida pari-mutuel wagering facilities. West Flagler sought to set aside Secretary Haaland’s approval only with respect to the Compact’s mobile sports wagering provision, leaving the remainder of the Compact — which permitted the Tribe to conduct in-person wagering, craps and roulette at its tribal casinos — in place. The later-filed action was initiated by a group comprised of the anti-gambling advocacy group “No Casinos” and several businesses/individuals located in close proximity to the Tribe’s casinos (the Monterra plaintiffs). The Monterra plaintiffs sought an order setting aside Secretary Haaland’s decision entirely, thereby completely invalidating the Compact.

In its motion for summary judgment, West Flagler argued primarily that the Compact’s mobile wagering provision violates the Indian Gaming Regulatory Act (IGRA), which only authorizes tribal-state gaming compacts to the extent they concern gaming conducted “on Indian lands.” See 25 U.S.C. § 2710(d)(8)(A)[emphasis added]. West Flagler argued further that by approving the Compact’s mobile wagering provision, Secretary Haaland exceeded the scope of her authority under IGRA, which is limited to the approval of compacts governing gaming activity on Indian lands. Id.

In response, Secretary Haaland argued the Compact itself does not purport to authorize sports betting outside tribal lands and, therefore, does not violate IGRA. The Secretary insisted the Compact authorizes only those online gaming activities that take place on tribal lands, including the receipt of online bets placed elsewhere. She asserted that the Tribe’s authority for all remaining gaming activity, including the placement of sports wagers in the first instance, is derived from the Florida statute implementing the Compact’s provisions, which was enacted earlier this year.

The court ultimately sided with West Flagler, concluding the Compact plainly purports to authorize the Tribe to conduct sports betting outside tribal lands in violation of IGRA, and that as such, the Secretary had an affirmative duty to reject the Compact. In so holding, the Court rejected the notion the Compact could simply “deem” wagers initiated from anywhere in the state to occur on tribal lands in order to bypass the limitations of IGRA, asserting that “[w]hen a federal statute authorizes an activity only at specific locations, parties may not evade that limitation by ‘deeming’ their activity to occur where it, as a factual matter, does not.” The court further rejected the notion that the Tribe’s authority for mobile sports betting outside tribal lands originates from the Florida statute implementing the Compact rather than the Compact itself, citing the Florida Constitution, which provides that sports betting can only be authorized through a citizens’ initiative or an IGRA gaming compact. Because there has been no citizens’ initiative, the Court reasoned, the Tribe’s sports betting operations “can be lawful in Florida only if” authorized under the Compact.

By way of relief, the court vacated Secretary Haaland’s decision to approve the Compact, thereby invalidating the agreement in its entirety. In so doing, the Court noted that, although West Flagler had requested that only the mobile wagering provision be invalidated, judicial precedent dictates the court must reject the Compact in its entirety, thereby “foreclosing line-by-line review of the Compact’s terms.” The court noted further that although its decision does not address the arguments raised by the Monterra plaintiffs in their summary judgment motion, the order invalidating the Compact also redresses the Monterra plaintiffs’ alleged injuries. The court therefore dismissed the Monterra plaintiffs’ motion for summary judgment as moot.

Notably, the court’s ruling also denied the Tribe’s motion to intervene in the actions, rejecting the Tribe’s assertion it is an “indispensable party.” In so holding, the court concluded the Tribe’s absence from the litigation would not be prejudicial because (i) plaintiffs seek a ruling binding Secretary Haaland, not the Tribe itself; and (ii) while the Tribe has a financial interest in the outcome of the disputes, those interests are protected by the State of Florida and Secretary Haaland, who have defended the Compact on its merits.

On Tuesday, November 23, the Tribe filed a notice of appeal as to the court’s decision. The Tribe also filed a motion to stay the court’s ruling pending appeal, which would allow it to continue offering the games covered under the Compact — including retail and online sports betting — until the appeal has been decided. Although the Tribe likely has the authority to appeal the court’s ruling on its motion to intervene, it is unclear whether the Tribe, as a non-party, has the right to appeal the court’s decision on any other issues, including the summary judgment ruling.

At this juncture, it is unclear whether Secretary Haaland will pursue an appeal and whether she will file a motion to stay the court’s ruling pending appeal.

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