Seminoles Withholding Payments to Florida as Sports Betting Case Appealed

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Seminoles Withholding Payments to Florida as Sports Betting Case Appealed

With its sports betting operation currently on hold due to a federal judge’s ruling, the Seminole Tribe of Florida has suspended payments to the state that were part of the gaming compact the two sides amended last year.

Hard Rock Hollywood
Hard Rock Hollywood
An aerial shot of the Seminole Hard Rock Hotel and Casino in Hollywood, Fla. This past week, the Seminole Tribe of Florida confirmed that it was keeping gaming compact payments to the state in an escrow account while an appeal continues in federal court regarding an order to nullify the amended gaming compact state and tribal leaders agreed to last year. (Image: Seminole Hard Rock Hollywood/Facebook)

Politico Florida first reported the news earlier this week, and a Seminole Gaming spokesman confirmed the details to Casino.org.

Gary Bitner noted that tribal leaders and state officials, including Gov. Ron DeSantis, are working closely regarding the appeal of US District Judge Dabney Friedrich’s ruling from last November nullifying the amended compact.

That agreement gave the tribal nation exclusive rights to offer sports betting through both retail sportsbooks and an online app. As part of the arrangement, the tribe agreed to partner with parimutuel gaming operators to create a “hub-and-spoke” network of kiosks allowing those businesses to participate.

However, two parimutuel operators filed suit, arguing that the online sports betting aspects of the compact violated the Indian Gaming Regulatory Act (IGRA), the federal law that oversees tribal gaming activities across the country.

The Magic City Casino and the Bonita Springs Poker Room filed their lawsuit in Washington, DC, and challenged the Interior Department’s approval of the compact. IGRA, the plaintiffs argued, does not allow tribal nations to operate gaming off their lands.

Friedrich agreed.

Hard Rock Sportsbook Lasted a Month

The Seminoles began offering mobile betting through its Hard Rock Sportsbook on Nov. 1. That was three weeks before Friedrich issued her order setting aside the entire amended compact. Tribal leaders were unable to intervene in Friedrich’s court and filed an appeal after her order.

When the Seminoles could not get a stay on Friedrich’s order, the tribal nation shut down its sports betting app in early December.

The case is currently before the US Circuit Court of Appeals. A decision is not expected in the near future, and it’s highly likely whichever side loses the appeal will take their case to the Supreme Court.

State Expecting Billions from Seminole Compact

Besides sports betting, the amended compact also included other gaming provisions. It allowed the Seminole Tribe to offer dice games and roulette, and it gave the tribe permission to build three additional facilities within its Hollywood Reservation, a nearly 500-acre area 20 miles north of Miami.

In exchange for the additional gaming rights, the Seminole Tribe agreed to make revenue sharing payments to the state. The compact specifically set a minimum to the state of $2.5 billion over the first five years and no less than $400 million in any year during that span. The state also expected to receive $6 billion over the first decade.

However, that’s on hold until the question about the sports betting provisions gets answered in the courts.

Until the litigation is resolved, the Tribe is making revenue share payments based on the 2021 Gaming Compact into escrow,” Bitner told Politico Florida.

The DeSantis Administration did not return a message seeking comment.

Florida Case Not Like New York

The Seminoles’ decision to withhold payments does not appear to be similar to the case between the Seneca Nation of Indians and the state of New York. In that case, tribal and state officials disagreed about whether the compact called for the Senecas to continue making payments when a mutual option became effective in 2017.

Arbitrators and federal courts ruled on the state’s behalf.

The state finally received more than $550 million this year after it sought a freeze on tribal accounts. After some of the money goes to Western New York communities, the state will use about $400 million of the Seneca funding toward its $600 million commitment it recently made to help build a new $1.4 billion stadium for the Buffalo Bills.

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