One of Three Lawsuits Challenging Florida’s Online Sports Betting Compact Dismissed

As the Seminole Tribe’s anticipated November 15 online betting “launch” approaches, there has been a flurry of activity in the three lawsuits challenging the online sports betting provisions in the 2021 Seminole Tribal-State Gaming Compact (the Compact) and the corresponding state law ratifying the Compact (the Implementing Law). On Monday, October 18, a Florida federal court dismissed one of the three lawsuits, which was initiated by West Flagler Associates, Ltd. (West Flagler), a Florida-based organization that owns and operates two pari-mutuel wagering facilities, and named Florida Governor Ron DeSantis and Julie Emmanuel Brown, Secretary of the Florida Department of Business and Professional Regulation, as defendants (the Florida Lawsuit).

West Flagler’s complaint focused on the provisions in the Compact and Implementing Law that: (1) grant the Tribe the exclusive right to conduct online sports betting in Florida; (2) treat mobile wagers initiated from anywhere in the state and routed through tribal servers as though placed on tribal land; and (3) make it a felony for anyone else to offer online betting unless under agreement with the Tribe. West Flagler also took issue with the provisions that allow pari-mutuels to offer branded online betting skins on the Tribe’s platform, but only if approved by the Tribe and under terms established by the Tribe, including mandatory allocation of roughly 40% of net “wins” (i.e., total receipts from mobile wagers, minus the value of any prizes paid out or promotional credits issued) to the Tribe.

West Flagler argued these “online betting” provisions violate a host of federal laws, including the Indian Gaming Regulatory Act (IGRA), by allowing the Tribe to accept mobile wagers placed outside of tribal lands, where sports betting is illegal. They asserted further that the Compact and Implementing Law attempt to unlawfully circumvent Florida Constitutional Amendment 3, which requires voter approval for any expansion of “casino gambling” – a term West Flagler insisted would include online sports betting.

West Flagler maintained that if the Compact’s online betting provisions were permitted to take effect, the result would be an “immediate” and “serious” loss of business, as West Flagler’s customers would be permitted to gamble from their own homes and would therefore have little incentive to patronize West Flagler’s on-site gaming facilities. West Flagler insisted the losses it would incur could not be remedied through monetary damages because the government entities involved all enjoy sovereign immunity.

By way of relief, West Flagler sought an order enjoining Governor DeSantis and Secretary Brown from fulfilling their alleged duties to “implement and enforce” the online betting provisions in the Compact and Implementing Law.

In the court’s October 18 order, it dismissed the Florida lawsuit for lack of standing, finding West Flagler had failed to demonstrate (1) “traceability,” i.e., a causal connection between West Flagler’s alleged injuries and the defendants’ duties to “implement and enforce” the Compact; and (2) “redressability,” i.e., that West Flagler’s alleged injuries would be remedied if defendants were enjoined from “implementing and enforcing” the Compact.

In holding West Flagler had failed to establish “traceability,” the court determined West Flagler’s alleged injuries derive from the online betting provisions in the Compact and Implementing Law – which grant the Tribe exclusive control over online sports betting – not from any duties or responsibilities owed by defendants. Though it acknowledged Governor DeSantis’ role in negotiating and approving the Compact and Implementing Law, the court asserted that, per longstanding precedent, an official’s role in “crafting duly-enacted legislation” cannot give rise to “traceability.” The court further rejected the notion that Governor DeSantis has an ongoing duty to “defend the validity” of the online betting provisions in the Compact and Implementing Law, noting the duty to defend the legislation rests with the state itself, not with the Governor personally.

The court also rejected West Flagler’s argument that Secretary Brown’s “ongoing obligations to oversee and inspect the Tribe’s activities for compliance with the Compact” were sufficient to establish “traceability.” In so holding, the court pointed out that Secretary Brown’s duty to “oversee and inspect” the Tribe’s activities is little more than a “monitoring” obligation. Secretary Brown has no regulatory or enforcement authority, the court maintained, and therefore has no control over the Tribe’s right/ability to offer online sports betting in the state. The court noted further that the Compact and Implementing Law leave it up to the Tribe to regulate gaming activity. Accordingly, even if Secretary Brown discovered an instance where the Tribe was in breach of the Compact, she would be required to present her evidence to the state, which would then have ultimate authority to decide whether to assert non-compliance against the Tribe.

The court further held that West Flagler had failed to establish “redressability” insisting West Flagler had not demonstrated how the relief requested, an order enjoining defendants from “implementing and enforcing” the Compact and Implementing Law, would remedy the alleged injuries. In so holding, the court reasoned that because defendants’ alleged duties are not “traceable” to West Flagler’s alleged injuries, an order enjoining defendants’ conduct would not do anything to remedy/prevent the alleged injuries. The court noted further that any order enjoining defendants’ conduct would be inapplicable to the Tribe and would therefore have no bearing upon the Tribes’ right to conduct online sports betting operations in Florida.

After determining plaintiff West Flagler had failed to demonstrate standing, the court gave West Flagler seven days to move for leave to file an amended complaint. At this juncture, it is unclear whether West Flagler intends to file such a motion.