Playing for power? Florida’s Pending Sports Gambling Decisions Shape The Landscape of the Emerging Mobile Industry

ETHAN SCHWAB—As parties move for potential power in a space that not only differs from state to state, but changes with every topical judicial ruling, the novel and heavily regulated mobile sports gaming industry sees constant litigation across federal and state courts. Nowhere are these complexities better exemplified than in the state of Florida, in which betting operators West Flagler Associates and Bonita-Fort Myers Corporation have challenged the legality of a compact between the state and the Seminole Tribe.

The compact, signed by Governor Ron DeSantis in 2021, granted the Seminole Tribe exclusive license to offer sports gambling in the state, as well as allowing for the Seminole Tribe to offer mobile sports gambling from any location in Florida, provided that the bets were processed by servers located on tribal lands. West Flagler and Bonita-Fort Myers challenged the compact under the Administrative Procedure Act (APA), claiming that Secretary of the Interior, Debra Harland, violated the statute’s arbitrary and capricious abuse of discretion standard by failing to reject the compact within 45 days of its signing. The district court found for the plaintiffs, holding that the compact violated the Indian Gaming Regulatory Act (IGRA) by authorizing gaming on non-Indian lands.

In June 2023, the Court of Appeals for the D.C. Circuit reversed. The court found that the compact did not violate the IGRA because the compact does not “authorize,” but rather “addresses” gaming outside of tribal lands. In referring to the compact’s language stating  “wagers on Sports Betting … made by players physically located within the State … shall be deemed to take place exclusively where received at the location of the servers,” the court determined that no authorization took place. Rather, the court found such language a stipulation between the compacting parties that mobile bets are considered to have taken place on tribal lands.

Plaintiffs also notably argued that the compact violated the Fifth Amendment’s equal protection guarantee because the compact grants the Seminole Tribe a statewide monopoly over online sports betting, and such preference for the Seminole Tribe is untethered to its land, unique sovereign status, or culture. Judge Wilkins rejected the argument, noting that the exclusive license promotes the economic development of the Seminole Tribe and is therefore constitutional.

The court of appeals ruling was a seemingly enabling victory for the Seminole Tribe. Many believed the ruling would almost instantly result in the relaunch of the Seminole Tribe’s Hard Rock Bet app in Florida that was suspended in 2021 in light of the litigation. However, such a result has been put on hold at the request of the plaintiffs — this time by the hand of the Supreme Court. On October 12, Chief Justice John Roberts granted the Petitioners’ Application for Stay of the Circuit’s Mandate.

While it is not certain the Supreme Court will grant certiorari on the case, the significance of the stay is twofold. First, the stay echoes the concern that not all of the legal intricacies that the Florida compact invokes can be addressed by a federal court of appeals alone. In the Petitioners’ Application for Stay, Petitioners noted that in 2018, Florida amended its Constitution to state that the right to decide on casino gambling lies exclusively in the hands of the voters. The amendment prohibited sports gambling in the state absent a public referendum result to the contrary. The court of appeals did not address whether the compact violated Article X, Section 30 of the Florida Constitution, as the court noted that the question fell outside the scope of their judicial review and was best left to the state courts.

Second, by recalling and staying the court of appeals decision, the Supreme Court acknowledged the industry-altering magnitude of the ruling. The decision not only endorses state compacts that grant monopoly power to Native American tribes, but also allows states to contract around the IGRA. States and tribes can stipulate to consider mobile bets to take place at the location they are received (tribal land) rather than where they are placed. Absent review by the Supreme Court, these principles could guide gaming law for years to come, potentially altering the balance of power between tribal and nontribal gambling operators in states that have yet to legalize the industry.

Resolving the intricate legal matters stemming from the 2021 IGRA compact between Florida and the Seminole Tribe by the Supreme Court or Florida Supreme Court could serve as a litmus test for the future of the gaming industry. As Florida’s eager gamblers await access to mobile sportsbooks, tribal and nontribal betting operators alike watch the docket with a keen eye.

The Supreme Court has since vacated its October 12 ruling, denying the application for a stay. Justice Kavanaugh reiterated that while the state law’s constitutionality raises equal protection issues, those issues are not present in the immediate litigation. Today, the Seminole Tribe announced that they plan to launch in-person sports gambling by the end of 2023. While no details regarding the launch of mobile betting were included in the announcement, some believe it is not far behind.