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Florida Legislature Okays Gaming Compact with The Seminole Tribe
By Jeff Osienya May 23, 2021 LegalityFlorida’s House and Senate chambers have given a new gaming expansion compact with the state’s Seminole Tribe a thumbs up. Read on to find out what the state and the tribe get from the deal and possible legal repercussions.Florida has made its most significant step yet towards realizing the dream of having a regulated sports betting market in the state. The state legislature finally passed a new Class III gambling compact with the Seminole Tribe last week to potentially pave the way for online and retail sports betting.
The state Senate led the way by giving the compact the green light with a 31 – 1 vote on Tuesday under Senate Bill 2–A after making some amendments. The House, on its part, showed overwhelming support to the gaming compact under House Bill 1–A, with a 97 – 17 vote the following day, on Wednesday.
After the approval of the bill in the lower chamber, the Senate president, Wilton Simpson, issued a briefing to praise their efforts as follows:
Quote“By comprehensively addressing issues raised for almost a decade, this historic legislation restores Florida’s relationship with the Seminole Tribe, offers new opportunities for Florida’s legacy pari-mutuel industry, and provides substantial new revenues for our state. After years of negotiations and the hard work of many people on both sides, I’m pleased to see this significant legislation pass the Senate today.”
What the bill awaits is a signature from Florida Governor Ron DeSantis and then final approval from the US Department of the Interior. After Gov. DeSantis signs the compact, the federal agency will then have 45 days to review and either validate or dissent the agreement.And if for any unlikely reason the Interior Department decides not to take any action on the compact, the compact will still take effect.
What Does Florida’s New Gaming Compact Say?
The new tribal-state compact is a 30-year agreement that offers the Seminal Tribe exclusivity on online and land-based sports betting in the state. Further, the tribal nation has also been given the authorization to open more casinos in selected tribal reservations and introduce new games such as roulette and craps. This compact also prohibits the entry of any new commercial casino establishments in Florida.
Furthermore, as part of the deal, the Seminoles also gave the go-ahead to launch a mobile sportsbook to serve the entire state under their Hard Rock brand. This provision also allows the tribal nation to forge partnerships with any of the numerous pari-mutuel facilities in The Sunshine State.
Third-party sportsbook companies will be allowed to enter the state via the pari-mutuel partnership, but there’s a huge caveat here. For one, the third-party sportsbooks will effectively be operating as subsidiaries of the tribe. Secondly, 40% of the profits that the said parties garner will have to be paid back to the tribes.
Additionally, the new tribal-state gaming compact also has a clause that compels the Seminal Tribe to enter “good faith negotiations” for sports betting partnerships with three or more pari-mutuel operators in Florida. Should the Seminoles achieve this, then the 15.75% they are supposed to pay the state from their sports betting revenue will be granted a 2% tax waiver to 13.75%.
In return, the Sunshine State will get a guaranteed $2.5 billion from the tribe over the next five years. On top of that, the state will also be receiving at least $500 million each year over the 30-year period. Should things go as planned, and the Department of the Interior gives the new compact a thumbs up (or says nothing), Florida sports fans could enjoy mobile and retail sports betting as soon as October 15th.
After the ratification of the new compact, the Chairperson of the Seminole Tribe of Florida, Marcellus Osceola Jr, released a statement on behalf of the tribe’s 4,300 members saying:
Quote“Today, all the people of Florida are winners, thanks to legislative approval of the Gaming Compact between the State of Florida and the Seminole Tribe of Florida. It is a historic and mutually-beneficial partnership between the State and Seminole Tribe that will positively impact all Floridians for decades to come.”
Osceola Jr also extended his gratitude to the tribe’s gaming Chief Executive and the state governor, along with Florida’s legislative team involved in the approval process. He added:
Quote“The Seminole Tribe wants to express our sincere thanks to Governor Ron DeSantis, Senate President Wilton Simpson, House Speaker Chris Sprowls, as well as to minority leaders Sen. Lauren Book and Rep. Evan Jenne, who have all worked hard to make this opportunity a reality. I must also thank our entire team for such a meaningful outcome, and specifically Seminole Gaming CEO Jim Allen for leading the negotiations.”
Looming Legal Hurdle for Florida's Tribal-State Gaming Compact
Many industry observers have pointed out that the restrictive nature of Florida’s sports betting regulations may scare potential third-party sportsbook operators. But that isn’t the biggest hurdle that lies ahead for the compact.
According to some antagonists of the new tribal-state gaming compact, the agreement directly violates a 2018 Amendment 3. Voters okayed the amendment to prohibit gambling expansion without a voter referendum. Opposers of the compact plan to take the matter to court on those grounds hoping it will be nullified.
On the other side of the coin, backers of the compact insist that the agreement doesn't violate any laws. The deal's supporters say it falls within the exemption set for tribal gaming under federal law and therefore is not subject to voter participation. Until the court settles how the compact should be interpreted, there's no saying whether Floridians have a guarantee of enjoying sports betting before the end of 2021.
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