Florida could have a full-featured online gambling market by 2025 if the current tribal compact survives legal challenges

New Florida Tribal Compact Authorizing Sports Betting Also Promises iGaming Negotiations Within 36 Months

Florida looks like it will be among the states getting legal sports betting this year. Perhaps more interestingly for Online Poker Report readers, online casino and poker might be coming too, sometime before the year 2025.

The Sunshine State’s current gambling industry is largely run by its Indian tribes, particularly the Seminoles. That tribe has negotiated a new compact with the state, which Gov. Ron DeSantis signed on Friday. The new deal clocks in at 75 pages. Once ratified, it will change several aspects of gaming in the state. Naturally, the provisions for the debut of tribal sports betting have received the most attention.

Buried in the Miscellaneous section at the end of the new compact, however, is a clause which begins:

The State and the Tribe agree to engage in good faith negotiations within thirty-six (36) months after the Effective Date of this Compact to consider an amendment to authorize the Tribe to offer all types of Covered Games online or via mobile devices to players physically located in the state (…)

Here, “Covered Games” refers to all other sorts of gaming described in the compact. That includes everything the Seminoles currently offer at their land-based casinos. They have therefore secured a promise from the state to negotiate terms for online casino games, including poker, by 2024 at the latest.

There has been considerable discussion about whether sports betting is likely to serve as a spearhead for other types of gambling expansion, in states that have allowed it. That certainly seems, for instance, to be the way things will go this year in Illinois, which launched its sports betting market last year. This is the first time, however, that a sports betting arrangement has included an explicit promise to follow up with iGaming at a later date.

How will Florida sports betting work?

The compact doesn’t lay out all the details for the new market. Instead, it specifies that the Seminole Tribal Gaming Commission will establish its own rules, with the following criteria:

  • Betting will only be available to individual aged 21 and older,
  • Standards must be equal for direct tribal sports betting and that conducted in partnership with one of the state’s commercial partimutuel betting operators,
  • Servers for online betting must be located on tribal land,
  • Sportsbooks must conduct Know Your Customer checks and maintain a list of those prohibited from betting, and
  • The state may request restrictions on types of bets deemed to be at high risk of manipulation or corruption.

In setting out its rules, the STGC is required to consult with the “State Compliance Agency.”

This isn’t a specific agency which exists at the moment. Rather, one of the requirements of the compact is for the state to establish such a body to oversee mobile sports betting and, eventually, iGaming.

One thing that the compact does cover explicitly, is payments to the state. These will be in the amount of 10% of net win for skins using the branding of a commercial parimutuel partner, and 13.75% otherwise.

All of that is assuming that the sports betting effort succeeds, which is far from certain. Although amending the compact is a major step, it isn’t sufficient in and of itself. Neither are the remaining steps mere formalities. Experts on gambling law have predicted legal challenges ahead, based on the state’s constitution and unresolved questions about where the law considers bets to have been placed are another.

The new compact also allows for craps and roulette at tribal casinos, construction of new gaming facilities on the Seminoles’ Hollywood reservation, and modified terms for revenue sharing.

Why is a promise to negotiate necessary?

All tribal gaming in the US hinges on compacts between tribes and the states in which they reside. Tribes are sovereign nations, which are generally subject to federal but not state authority. However, goings-on in the state impact life on the reservations heavily, and vice versa. Thus, federal law contains provisions to facilitate deal-making between tribes and the states in whose borders they reside.

One such law is the Indian Gaming Regulatory ActThis requires states to enter into good faith negotiations for casino gambling compacts when requested by the tribes. Given that fact, one might wonder why the pre-commitment to negotiate iGaming is necessary.

For one thing, federal courts have decided that they can’t actually compel states to negotiate with the tribes. Instead, what happens in the absence of good faith from the state is that the Department of the Interior steps in and allows the tribes to conduct gaming on terms it decides instead.

That can take time, however, so it’s better for the Seminoles to have received a firm commitment to negotiate within a deadline. More importantly, however, the IGRA predates the modern internet. There are many as-yet-untested legal questions surrounding whether and how it applies to online channels. There’s a good chance that the DOI would refuse to intervene without a costly legal battle to answer those questions. Naturally, no tribe wants to be the one to have to pay for such a battle.

Overall, it makes perfect sense to use sports betting both as a weather balloon to test the potential legal issues around internet gambling, and to pencil in an appointment to discuss next steps.

What’s next for Florida?

With the compact signed, the ball is now in the Florida legislature’s court. Both the House and Senate have agreed to hold a special session the week of May 17 to ratify the compact and send it to the DOI for approval.

There will still be a bill required. Senate President Wilson Simpson previously announced legislation to establish a Gaming Control Commission, which would fill the role of the “State Compliance Agency” described in the compact. He expects to reintroduce that bill, and another related to gaming expansion, during the special session.

Legislating a new form of gambling can be a long process, as can the road from legalization to launch. Fortunately, having a compact in place beforehand should streamline the process. Sports betting is also a bit less complicated than iGaming in this regard.

If there were to be no legal challenges, we could expect retail sportsbooks to start taking bets within a few months of a law passing. Mobile betting apps would probably follow before the end of the year. That’s a big “if,” however. In all likelihood, there will be more twists to this story before Florida gets legal sports betting, while online poker rooms and casinos remain far off and hypothetical for the time being.

- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for Online Poker Report, he has been writing about poker and the online gambling industry in various capacities since 2014.
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