Federal Officials: Throw Out Florida Lawsuit That Would Delay Sports Betting Launch

The post Federal Officials: Throw Out Florida Lawsuit That Would Delay Sports Betting Launch appeared first on SportsHandle.

Federal attorneys filed a 51-page memorandum Tuesday seeking dismissal of a lawsuit against the U.S. Department of the Interior over its failure to reject a Florida sports betting compact between the state and the Seminole Tribe.

Should the request for dismissal fail, the government attorneys are seeking denial of a preliminary injunction that could delay the kickoff of betting in Florida indefinitely.

A separate memo, also filed Tuesday, urged that a compact-related lawsuit filed in district court in Washington, D.C., be transferred to a Florida federal court, where a nearly identical case has been filed.

The maneuvers came just a few days after the Seminoles objected to the plaintiffs’ claim that the tribe’s bid to formally intervene in the D.C. case should be denied as unnecessary.

According to the new state law and compact between Florida and the Seminoles, statewide digital and retail sports betting could go live as early as Friday. The Seminoles have repeatedly said — and confirmed in a brief filed in the case brought by Magic City Casino and the Bonita Springs Poker Room — that they would not go live on that date, and are aiming for Nov. 15, 10 days after oral arguments are set to be heard in the case brought by the parimutuels.

Back to the beginning

 

The lawsuits stem from a compact reached by Florida government officials and the Seminoles this spring, allowing for the tribe to offer sports betting at its brick-and-mortar casinos — an objective not in dispute — as well as mobile sports betting throughout the state. The agreement gives the Seminoles a monopoly on wagering and requires that any bet made on a mobile device must flow through the tribe’s server. The tribe can partner with parimutuels — which can in turn partner with other operators — to offer betting, but a steep price (40% of gross gaming revenue) would have to be paid to the Seminoles per bet.

There is significant skepticism that federal precedent allows for any tribe to offer such gambling beyond the physical limits of its sovereign land. The Indian Gaming Regulatory Act of 1988 specifies that “Indian tribes have the exclusive right to regulate gaming activity on Indian lands,” but no federal judge has concluded that such activity can extend any further.

In Michigan, where tribal partners can offer digital betting off reservation, the tribes opted not to use compacts and to instead be regulated by the state. In Arizona and Connecticut, tribes agreed that they and/or their operating partners would be regulated by the state and taxed for bets taken on devices off reservation.

Still, the Florida compact was submitted to the Department of the Interior in late June, and after 45 days, the department declined to issue a ruling on the compact’s validity. That means that the compact is effectively “deemed to be approved,” which enables the tribe to move forward.

The plaintiffs in the form of the parimutuels then filed suit, first in Northern Florida District Court and then in a similar D.C. court, with both filings occurring in August. A pair of Florida businesses also filed suit seeking an injunction in September. That lawsuit was filed in Washington, D.C., District Court. 

Why would a court dismiss the case?

Summary judgment is a high bar to clear, but federal attorneys argue that the Magic City Casino and the Bonita Springs Poker Room lack standing in the case because “they fail to adequately allege an actual or certainly impending injury in fact that derives from the Compact becoming effective by operation of law.

“At most, Plaintiffs identify highly speculative, hypothetical injuries that turn in part on Plaintiffs’ own decision whether to participate in the online sports betting program to which they object.”

It is true that the tribe is expected to have multiple business partners when it comes to mobile sports betting, and that the plaintiffs conceivably could ease their concerns that way.

Aside from that, the attorneys added that a survey conducted by the plaintiffs and referenced in the filing does not offer proof that their businesses will be “severely damaged — or at all.” According to the filing, the survey revealed that the majority of respondents said they would increase their spending to add sports betting, “rather than divide their spending between sports betting and other games that Plaintiffs offer.”

For a preliminary injunction to be issued, it is the plaintiffs who face a high bar.

“Plaintiffs must substantiate that there is ‘likely,’ ‘imminent,’ and ‘irreparable’ injury. Plaintiffs have not made and cannot make this showing,” according to the filing. 

Tribe seeks seat at court table

Numerous precedents were cited by the tribe in its own filing last week seeking intervenor status in the D.C. case.

“One such interest is in the potential loss of a very substantial economic opportunity for the Tribe if Plaintiffs receive the relief they seek,” the tribe stated, while also asserting a sovereign interest in not having its legal rights determined in its absence.

The tribe further explained that, as a party to the 2021 compact, it “would be adversely affected by a determination of this action favorable to Plaintiffs — where such a determination would undermine an agreement the Tribe and the State negotiated as sovereign entities.”

The plaintiffs cannot sue the tribe directly because of the tribe’s “sovereign immunity,” according to its filing, and the Seminoles claim that suing the Department of the Interior is a desire “to make an end run” around that scenario.

“This case is not about the Department’s conduct; it is about stopping the Tribe’s operation of online sports betting,” according to the filing. “The Department cannot adequately represent the Tribe’s unique interests in operating and deriving revenue from the online sports betting covered by the 2021 Compact to which the Tribe is a contracting party.

“The truth is, the Tribe does not know how the Department, represented by the Department of Justice, will argue this case — including how it will argue the merits.”

One case better than two?

The Florida version of the lawsuit is against Gov. Ron DeSantis, rather than against the federal government, for his signing of the compact that the plaintiffs claim is illegal.

Nonetheless, federal attorneys argued that “the claims and relief are substantially identical.”

These duplicative proceedings pose risk not only of wasting judicial time and resources, but of presenting inconsistent, contradictory, and confusing judicial determinations as to the legal issues presented in both cases. Further, because the Florida-Seminole Compact governs tribal gaming only in Florida, this case involves issues of local controversy that outweigh any connection that this case may have with the District of Columbia.”

The court cases are only one piece of the drama surrounding legal sports betting in Florida. In June, a group of operators headed by DraftKings and FanDuel started the process to get an initiative onto the November 2022 ballot. If the proposal is put to voters and passes, it would also allow for statewide digital wagering — but the bets would not be required to flow through the Seminole server.

As signature gatherers try to meet an early 2022 deadline, it appears that the process has gotten out of hand, at least on the Florida International University campus, where there has been alleged harassment of students in connection with ballot initiatives.

The post Federal Officials: Throw Out Florida Lawsuit That Would Delay Sports Betting Launch appeared first on SportsHandle.

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