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Judge finds Florida gaming compact violates federal, state law

According to court documents, U.S. District Judge Dabney Friedrich sided with casino operator West Flagler Associates.

WASHINGTON D.C., DC — A federal judge ruled Monday evening that Florida's recent gaming compact, which allows online sports betting across the state, is in violation of both federal and state law. The decision may spell a brief end to Florida's short-lived sports betting era.

According to court documents, U.S. District Judge Dabney Friedrich sided with casino operator West Flagler Associates. The group filed its lawsuit against the U.S. Secretary of the Interior since it’s the federal body that signs off on Indian gaming deals.

According to Friedrich, the Secretary of the Interior, Deb Haaland, received a copy of the gaming compact in June. However, since they took no action in 45 days, they automatically defaulted and approved the compact.

"Sports betting and all gaming in encompassed under the compact is invalidated. Meaning there will be no online sports betting any longer," said Daniel Wallach, the founder of Wallach Legal.

Now, months after the compact's approval, and weeks after the Hard Rock Sports Betting app went live, the judge is now saying both federal and state laws are being violated. 

That federal law is the Indian Gaming Regulatory Act, which does not allow bets to be placed off tribal land even if the servers processing those bets are on tribe property.

"In-person sports betting will not be able to launch and the other authorizations for additional casinos, craps, roulette, all of that is stricken because the federal government did not preserve that part of the argument relating to the other types of gambling above and beyond online sports betting," Wallach said. 

"At its core, this decision addressed whether internet sports betting could be found to have occurred solely on Indian land just because the server is located on Indian land."

The sports betting law is also in violation of the state's own constitution, according to Friedrich. The law violates amendment three of the state constitution, which voters passed in 2018. It gives Floridians the right to vote on issues related to gambling that occurs off tribal land. 

Friedrich says it's not the end, however. 

Florida lawmakers could come up with a new gaming compact that allows online gaming solely on Indian lands. Alternatively, Floridians could also authorize online sports betting if the topic is placed on the ballot in next year's election. 

"It will really be up to the Florida Legislature early next year to try to come up with a different approach. But, any different approach that overrides or circumvents voter approval will be met with another lawsuit," Wallach said. 

"In the end, the most viable path for sports betting legalization be it in person and online sports betting has to be through the voter approval process. DraftKings and FanDuel have already formed a political action committee and are gathering signatures to try to place that issue before the voters in November 2022."

If a measure is on the ballot by the next election and is passed with support from 60 percent of Floridians or more, Wallach says the soonest online sports betting can start again is January 2023.

For now, he's encouraging anyone who placed bets over the last few weeks to withdraw their money and seek a refund. 

"If you're a customer and you've deposited money in the face of this litigation risk, I guess you bear some level of culpability. But, the ultimate responsibility lies with the Seminole Tribe to now refund all that money promptly. There's no good reason why a customer withdrawal or refund request shouldn't be granted promptly, swiftly and immediately," Wallach said.

Gov. Ron DeSantis addressed the ruling during a press conference Tuesday saying his administration anticipated that this could happen given the unsettled hub and spoke legal issue — meaning where a person can place a bet anywhere and not only on casino property.

“We structured the compact so that the compact is preserved for the casinos and the other stuff. So, we’re gonna still be getting revenue, obviously, we’ll get less revenue from sports betting if they’re not able to do hub and spoke. I would imagine that’s gonna be appealed.”

The governor added that the state is prepared to do whatever it can to validate the current compact.