As the Supreme Court nears summer recess, the clock is ticking on a decision that may determine the future of the Florida sports betting market for the next decade and beyond.

On Thursday, the nation’s highest court held a conference to discuss whether to take up a petition filed by a Florida parimutuel four months ago. The petition, filed by West Flagler Associates (WFA), asks the Court to decide on the legality of a 2021 gambling compact between the Seminole Tribe of Florida and the state. Within the compact, Florida granted the tribe exclusivity on mobile sports wagering throughout the state, a provision that is being challenged by the parimutuel.

West Flagler filed a writ of certiorari in February to petition the Court for review. According to Supreme Court procedure, at least four of the nine justices must vote to grant certiorari to take up the case. Last month, the U.S. Department of the Interior filed a response, outlining why it believes the Court should not hear the matter.

The justices convened on Thursday for a private meeting to discuss a series of cases and vote on numerous petitions for review. The case, West Flagler Associates, Ltd., et al. v. Deb Haaland, et al., has been distributed for Thursday’s conference, according to the Court.

The Court’s decision may serve as a proxy for the application of mobile sports betting on tribal lands across the nation.

A Hub-and-Spoke Model

Approximately three years ago, the Florida Legislature and the Seminole Tribe agreed on a new compact that gave the tribe the ability to accept wagers on sports for the first time. Under the 30-year compact, the tribe will pay the state about $20 billion, including roughly $2.5 billion over the first five years. The compact enabled the tribe to establish a “hub-and-spoke” model, where Floridians could place online sports wagers anywhere inside the state through mobile servers located on tribal lands.

The compact then went to the Interior Department (DOI) for approval. But instead of signing off on it, Secretary Deb Haaland took no action after a 45-day waiting period. By doing so, Haaland essentially allowed the compact to be “deemed approved.”

Months later, WFA prevailed in U.S. District Court when Judge Dabney L. Friedrich ruled that the compact violated the Indian Gaming Regulatory Act (IGRA), a statute enacted by Congress in 1988. In her decision, Friedrich ruled that the plaintiffs faced “competitive injury” since the compact essentially granted the tribe a monopoly on mobile sports betting in the state. The DOI appealed to the U.S. Circuit Court for the District of Columbia, which unanimously reversed the decision last June.

Off-Reservation Tribal Gaming

The compact, according to the petitioners, enables the tribe to offer sports betting over the internet to gamblers located in Florida, including locations that are not on tribal lands. Furthermore, the compact allows the activity by “deeming” mobile wagers placed off tribal lands to be made on the properties through the servers. In a 39-page petition filed in February, WFA questions whether IGRA authorizes the approval of a compact to allow for a gambling monopoly throughout the state and off-tribal lands.

The question has precedence. In 2003, the Ninth Circuit Court of Appeals ruled, in Artichoke Joe’s California Grand Casino v. Norton, that the IGRA only applies to Indian lands, tribal self-government, and tribal status of federally recognized tribes. In another case, Michigan v. Bay Mills Indian Community, SCOTUS examined jurisdictional issues on gambling violations of IGRA that take place on off-tribal lands. In the opinion, Justice Elena Kagan wrote that while a state can forbid tribal gambling in violation of a compact, it cannot prohibit the activity in off-tribal areas. Hamish Hume, an attorney for West Flagler, argued that the D.C. Circuit reversal presents a conflict with the Supreme Court’s ruling in Bay Mills.

This Court’s decision in Bay Mills adopted a strict construction of IGRA that refused to use an operational linkage between activity on and off Indian land to apply IGRA to gambling activity off Indian lands. The Circuit Opinion does the opposite by using the provisions of section 2710(d)(3)(C)(vii) to conclude that it is permissible for the Secretary to approve a compact that provides for gambling off Indian lands.

West Flagler Associates, Petition for Writ of Certiorari, P. 21, paragraph 2 — February 8, 2024

Hume did not immediately respond to a request from Sports Handle for comment. If you placed a wager on the NBA Finals on Wednesday from a sportsbook inside the Seminole Hard Rock Hollywood, the bet is considered to be on tribal land. The same wager placed on your phone from Las Olas Beach in Ft. Lauderdale is considered off-reservation.

The DOI Response

Last month, the DOI responded in a 31-page filing written by the Justice Department. In making a states’ rights argument, the department responded that the IGRA largely leaves compact issues to the tribe and the state that negotiated it. Ultimately, the DOI believes there should be a three-pronged test when assessing the validity of the compact in the case.

• Does the compact violate the Indian Gaming Regulatory Act?
• Does the compact violate the Unlawful Internet Gambling Enforcement Act?
• Does the approval of the compact violate the equal-protection component of the Fifth Amendment’s Due Process Clause?

If the compact does not violate any of the three, it should remain in place, the department argued. The DOI does not believe a violation occurred and recommends that the Court not hear the case.

The Seminole tribe launched a new incarnation of Hard Rock Bet in Florida last November. The tribe initially rolled out a sports betting platform in 2021, but took it offline after 34 days. While the compact allows parimutuels to offer sports betting, the companies must do so through the Seminoles’ servers. The parimutuels are also required to pay the tribe a revenue-sharing fee of 60% on all winning wagers. At the moment, none of the parimutuels statewide offer sports betting.

A spokesman on behalf of Hard Rock did not immediately respond to a request for comment.

Based on the Supreme Court’s internal guidelines, the Court will grant certiorari if a lower court’s decision is “in conflict” with other federal court decisions on the “same, important matter.” SCOTUS may also hear a case if the decision conflicts with its own precedence. Finally, the Court may grant certiorari if a consequential question of federal law has not been resolved.

The Supreme Court could issue a decision on whether it will grant certiorari as early as June 17th. If a decision is not released then, the Court could wait another week until June 24th. Typically, the Court only grants certiorari on about 5% of all petitions each year. If granted, the Court could hear the case at some point next year.