New gaming compact filled with promise and pitfalls

ORLANDO, Fla. — In 2010, the Seminole Tribe and the State of Florida signed a gaming compact, clearing the way for the tribe to operate casinos on its land in the state, and for the state to receive cash payments. Those payments ended in 2018.

Now, a new compact is on the table. But it’s not 2010… and this compact could be headed for problems.

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“This historic compact expands economic opportunity, tourism, and recreation, and bolsters the fiscal success of our state in one fell swoop for the benefit of all Floridians and Seminoles alike,” said Gov. Ron DeSantis in a press release. “Our agreement establishes the framework to generate billions in new revenue and untold waves of positive economic impact.”

Under the agreement, which will need the legislature to act in a May 17 special session, the Seminole Tribe would get an expansion of roulette and craps, as well as the exclusive rights for the fastest growth sector in gambling: sports betting. The state would also start receiving payments again from the tribe, with estimates putting the yearly payments at $500 million.

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“The Seminole Tribe of Florida is committed to a mutually-beneficial gaming compact with the State of Florida and looks forward to its approval by the Florida Legislature, the Seminole Tribal Council and the U.S. Department of the Interior,” said Marcellus Osceola Jr., chairman of the Seminole Tribe of Florida, in a release.

But the agreement faces an uphill battle. That’s because in 2018, two major things happened: the U.S. Supreme Court cleared the way for states to authorize sports betting, and Florida voters amended the state constitution.

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Florida’s Amendment 3 took the right to authorize new casino gambling away from the Florida Legislature and gave that power to voters. The amendment, which passed with 71% support, limits virtually any expansion of gaming in the state, with an exception for the Seminole Tribe, one of the financial backers of the amendment.

“Our constitution says this is a decision that voters, not politicians, should be making,” says John Sowinski, the head of No Casinos. “This proposed compact violates the amendment in a number of different ways mainly because it doesn’t leave these decisions to voters.”

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Because of the amendment, DeSantis and legislative leaders are trying to thread the needle with the new compact. But that is fraught with problems.

“He wants to be able to funnel all gambling expansion in the state of Florida through the artifice of the Seminole Gaming Compact for two very important reasons,” says gaming attorney and sports betting legal expert, Daniel Wallach. “Amendment 3 limits what the legislature can do, so if you want to add new casinos or new games, you have to do it through a compact.”

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Wallach says while the new compact can easily clear the way for an expansion of table games and a sports book at existing Seminole casinos, it will face problems if the tribe attempts to launch or partner with mobile sports betting apps.

“The states around the country have allowed a number of different venues to offer sports wagering, it is not the province of casinos. In fact, when Amendment 3 was passed in 2018, the definition of casino gambling was what type of games were typically found in a casino in 2018, and at that time 40 states had legal commercial casinos but only six of those 40 had sports betting as a feature in the casino,” says Wallach.

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If the Seminole Tribe attempts to launch or partner with an existing company for a mobile sports betting app, federal law and court cases could cause problems, since federal courts have ruled that gambling takes place not where a computer server is located, but rather where a gambler is located. This would allow the tribe to have physical sports books, but not a mobile app without running afoul of the Florida constitution.

The compact still needs to be approved by the Florida Legislature and by the US Secretary of the Interior, Deb Haaland.

Cox Media Group