The Most Significant Development Since PASPA

The Supreme Court's decision not to hear the Florida sports betting case is the most significant development for the gambling since the Supreme Court overturned PASPA.

The US Supreme Court’s decision not to hear the Florida sports betting case is a significant development, likely the most important development for the US gambling sector since the Supreme Court overturned PASPA. However, unlike PASPA's immediacy, its significance will likely only become apparent over time.

At its core, it hands the Seminole Tribe a legal victory and validates the tribal compact between the tribe and Florida. In the bigger picture, it could fundamentally upend the US online gambling market, providing a model other tribal gaming states can follow.

The SCOTUS decision not to grant cert has sent reverberations through the gambling industry, with no shortage of takes that I would call accurate but, in many instances, overstated. Let’s get through the facts, and then I’ll provide some of my own on the decision.

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The Winning Argument

There is some lingering confusion about the compact’s structure and the legal arguments it used. The opposing side, the West Flagler side, seems better understood.

During a roundtable discussion I hosted for Gaming Law Review (paywall) in 2021, Marc Dunbar, a law professor and attorney representing the Seminole Tribe who helped write the Florida Compact, pointed to tribes offering online horse racing as the blueprint for the mobile betting compact:

“There has not been any question that when a parimutuel wager occurs, it is effectuated based on the law of the host location. That’s been litigated in Florida and has been affirmed. It’s been litigated in lots of states and has been affirmed. Separate and apart from it, federal laws allowed the states to essentially define what wagering is within their jurisdiction.

“There is 140 years of case law that affirms the contract principle, but more importantly, that the wagering activity occurs where the acceptance is. And then you overlay the fact that IGRA allows the state and the tribal sovereign to essentially define the activity, as well as the regulatory aspects of it, which is critical. They essentially are allowed to define where the regulatory jurisdiction occurs.

“That's backed up by the pari-mutuel operations that have been going on since 1931. You have plenty of precedent to protect Interior's opinion that this is allowed under IGRA.”

In simple terms, the argument for the compact is that a state can define gambling and how it is delivered within its borders (a critical bit) in any way it wants, including where the bet takes place.

It Takes Two to Tango

There is also some confusion about what happens next.

The case doesn’t allow tribes with a gaming compact (even one that includes sports betting) to offer statewide mobile betting. For that to happen, several boxes must be checked:

• The state and tribe need to enter into a compact

• The compact must include mobile betting

• The state must legally define mobile bets as taking place at the server

Those boxes require the tribe and the state to be on the same page.

A state can structure the compact to prohibit mobile betting, and even if mobile betting is legal in the state, the state must define mobile betting as taking place at the server location for a tribe to offer it statewide.

I thought James Siva, chairman of the California Nations Indian Gaming Association, perfectly explained the situation this week during The New Normal Webinar Series hosted by Victor Rocha and Jason Giles, saying the decision “opens up some new avenues for us, but our timeline remains the same.”

“I know there’s a lot of excitement over this decision, and it was the right decision, but people think we’re going to start having a push for a new initiative,” Siva said. “We’ll continue on the path we’ve been taking for the last few years, moving carefully and methodically.”

The decision provided tribes with more (and far better) options than they had before, which was to relinquish tribal sovereignty and agree to a commercial sports betting license.

In Seinfeld terms, tribes have hand. The question is, how much?