By Bill Speros | | 7 mins
Florida Legislature Won't Consider New Compact Until Court Case Resolved
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The compact, signed in 2021, remains in judicial purgatory with no end date in sight a week after the sides argued whether or not a federal appeals court has jurisdiction in one of the related cases.
A spokesman for State Rep. Randy Fine (R-Palm Bay) said Fine "expects to see the compact work its way through the courts before any new action is taken." Fine is the chairman of the House Select Committee on Gaming.
This wipes out any chance of a new compact being discussed in the upcoming special session of the legislature scheduled for May, given the current legal issues at hand. The major issue on the agenda there is property insurance reform, but other issues could arise. The current special session of the legislature runs through Friday.
The 30-year, $500-million per year compact was signed into law by Gov. Ron DeSantis in 2021 after it was passed during a special session of the Florida Legislature. It is awaiting a second chance in the U.S. Court Of Appeals, D.C. Circuit after it was nullified by U.S. District Court Judge Dabney Friedrich.
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Fine was chosen by House Speaker Chris Sprowls to shepherd the compact through the House last spring. Fine was a casino executive in Las Vegas, ran a gaming consulting firm, and managed the Greektown Casino in Detroit before moving to Florida.
Fine's perspective here is important not only because of his role in the legislature, but because he predicted the 2021 compact's eventual downfall in the courts. Last year during the special session that approved the compact, Fine warned its mobile sports betting component would not "survive" legal muster. He was right. It was the "hub and spoke" sports betting part of the compact that Judge Friedrich cited when throwing the full deal out in court last year.
Court Saga Continues
Judge Friedrich threw out the compact after consolidating two cases filed against the Department of the Interior. One case was filed by a group that included West Flagler Associates, owners of the Magic City Casino in Miami. The appeals court had asked all sides to show cause by Monday as to whether an appeal filed by Monterra MF, LLC, representing among others the "No Casinos" group, should be dismissed for “lack of jurisdiction."
The Monterra group argues that its case should be heard in federal court separately from West Flagler's. While both sides oppose the compact, they have vastly different end goals. Monterra wants no more gambling in the state, unless approved by voters under Amendment 3. West Flagler, meanwhile, claimed the gaming compact caused it financial harm during its 34-day run last fall.
The DOI, meanwhile, argued that the appeals court does not have jurisdiction in the Monterra case because Judge Dabney Friedrich did not rule upon it separately.
"The government is trying to win the Monterra case by not having to fight it at all," explains Bob Jarvis, a long-time Florida attorney and professor at the Shepard Broad College of Law in Fort Lauderdale.
In addition to mobile sports betting via the Hard Rock Sportsbook app, the 2021 compact between the state and Tribe also permitted roulette and craps in the Seminole Tribe’s casinos.
Big Bucks But Not A Dime From Betting
Florida passed the largest state budget ever - $112.1 billion - this year. And not a single penny of that record spending spree came from Florida sports betting revenue.
None of this is positive news for those who want to return to the good old days – meaning November of 2021 – when the Hard Rock Sportsbook app was up and running across the Sunshine State. Unless you happen to be Calvin Ridley, it was great to be in a state where not only was sports betting legal, but you could go to the beach on Thanksgiving without freezing to death in the process.
Many in the legal community and some of those who supported the gaming compact as written and passed knew that the “hub and spoke” approach to sports betting was a long shot at best.
Amendment 3 passed in 2018 prohibits the expansion of “casino gambling” in the state of Florida without 60% approval from the public in a state-wide election. It says nothing about “sports betting,” which was legalized nationwide by the Supreme Court after the Amendment was originally drafted but before it was passed.
In one of great ironies in this tale, nearly all of the funding to pass Amendment 3 came exclusively from Disney and the Seminole Tribe. Both of those entities now are in the lead float of the sports betting parade.
Push By DraftKings, FanDuel Proved Costly
While the 2021 gaming compact between the Seminole Tribe and Florida languished in federal court, a group called Florida Education Champions pushed to get a measure on the 2022 state ballot legalizing mobile and on-site sports betting.
It was doomed from the start, given that the signature gathering did not begin until June of 2021. DraftKings and FanDuel spent more than $36 million on the quixotic effort and the initiative fell more than 370,000 signatures short of the number needed to get on the ballot.
Unless the 2021 compact is upheld on appeal in federal court, it’s nearly impossible to see a path to legal mobile sports betting in Florida before 2025.
Amendment 3 bars the legislature from enabling any new gambling in the state – save for a compact with the Seminole Tribe. The Tribe remains free to begin on-site sports betting on Indian lands – meaning inside the Hard Rock Casinos – at any time.
But nothing will change until the current compact’s fate is finalized in court.
Compact’s Fate Determines Next Steps
If the compact is upheld, the Hard Rock Sportsbook app would return and those who enjoyed those 34 heady days of online wagering would be free to bet with abandon on the sports betting app.
If it officially goes down, the state and Tribe could finalize a new deal – minus the “hub and spoke” online betting model. That would not occur until the 2023 legislative session.
Any compact shuts out other betting providers. A unified effort between DraftKings, FanDuel, BetMGM, PointsBet, Penn/Barstool, Caesars Sportsbook and others would be the wisest path to follow if these providers ever hope to enter the lucrative Florida market. Florida was the most-populous state to have ever legalized mobile sports betting, even if it only lasted five weeks.
The failed measure backed by DraftKings and FanDuel has rolled over into the 2024 election cycle. But the signature-gathering effort resets to zero. Initiatives must receive 891,589 verified signatures to get on the Florida ballot, with a minimum number required in 14 of the state’s 27 congressional districts.
Florida Is Flush With Cash
Florida’s monstrous FY 2022-23 state budget includes a 5.38% pay raise for all state employees, bonuses to law enforcement officers, a $15 minimum wage for state workers, new higher base wages for teachers, and a month-long gas tax holiday in October. The funding includes $37 billion in federal revenue Florida received this year.
The total is 10% higher than the current budget and 20% more than the last pre-pandemic spending plan passed in 2019.
In other words, Florida is flush with cash.
The argument that “Sports Betting Is Good For The State’s Bottom Line” and “It’s Needed To Fund Education” fell flat in 2022 and will fall flat again in 2024.
Especially in a presidential election year that could include either/or both Donald Trump and Ron DeSantis on the GOP side of the ballot.
If any provider outside of the Seminole Tribe hopes to get a foothold in Florida, they will have to think outside the traditional box.
That could mean making an argument rooted in personal freedom if sports betting gets on the ballot in 2024. It could mean trying to work an end-around on Amendment 3 in court given that it doesn’t specifically preclude sports betting. Or, the so-called “out of state” providers could work with the Seminole Tribe to create a “super book of super books.”
Thankfully, those calls aren’t up to me.