Feds Say Judge Should Toss Florida Gambling Law Challenge

Owners of Magic City Casino in Miami-Dade County and Bonita Springs Poker Room in Southwest Florida contend in the lawsuit, filed against the federal agency that oversees tribal gambling, that the sports-betting plan violates federal laws and will cause a "significant and potentially devastating" impact on their businesses.

The Havenick family, which has owned both facilities for more than five decades, filed a similar lawsuit in July against the state in federal court in Tallahassee.

The gambling agreement, signed in April by DeSantis and Seminole Tribe of Florida Chairman Marcellus Osceola Jr. and later ratified by the Legislature, opens the door for the first time to sports betting in Florida. Under the agreement, known as a compact, the Seminoles will serve as the host for sports betting and contract with pari-mutuels that would get a cut of online bets placed using the pari-mutuels' mobile apps.

In seeking dismissal of the lawsuit that names U.S. Department of the Interior Secretary Deb Haaland and her agency as defendants, the federal government's lawyers argued that the plaintiffs lack standing because they failed to "adequately allege an actual or certainly impending injury that derives from the compact becoming effective by operation of law."

"At most, plaintiffs identify highly speculative, hypothetical injuries that turn in part on plaintiffs' own decision whether to participate in the online sports betting program to which they object. Such contentions fail to establish standing and thus this suit must be dismissed," the Biden administration lawyers wrote in a motion filed Tuesday.

The compact allowed the tribe to offer online sports betting beginning Friday, but the Seminoles haven't launched the operation. It's unclear when sports betting will be available to Florida gamblers.

The "hub-and-spoke" sports-betting plan would allow gamblers throughout the state to place bets online, with the bets run through computer servers on tribal property. The compact says bets made anywhere in Florida "using a mobile app or other electronic device, shall be deemed to be exclusively conducted by the tribe." The tribe is ultimately expected to pay billions of dollars to the state because of sports betting and other parts of the compact.

But calling Florida's sports-betting model a "legal fiction," the pari-mutuels' lawsuits maintain that federal law does not authorize bets that occur off tribal lands.

"Through this fiction, the compact and implementing law seek to expand sports betting outside of Indian lands to individuals located anywhere in Florida so long as they have a computer and internet connection --- subject only to the tribe's monopoly," lawyers for the pari-mutuels wrote.

The federal Bureau of Indian Affairs, which Haaland oversees as part of the Department of the Interior, in August allowed a 45-day review period to elapse without taking action on the gambling agreement.

The motion filed this week said the lawsuit should be dismissed because, under federal law, a compact that goes into effect without action "shall be considered to have been approved by the secretary, but only to the extent the compact is consistent with the provisions" of the Indian Gaming Regulatory Act, or IGRA.

"In any event, if plaintiffs are correct that certain provisions of this compact are contrary to IGRA, then under their own theory, those provisions are not actually deemed approved. As a result, the secretary could not have made the allegedly unlawful approvals" that the legal complaint alleges, the motion said.

The pari-mutuel operators challenging the compact argued that the sports betting system will "cannibalize" their customer base, causing them to lose money.

But Haaland and her agency brushed aside that concern, arguing that the plaintiffs "appear to assume … that if online sports betting becomes available, it will have an instantaneous and transformative impact on the Florida gaming market to their detriment."

Evidence submitted by the plaintiffs, including a survey of customers, "fails to show that plaintiffs will suffer any concrete or certainly impending injury" from the introduction of online sports betting in the state, the federal government lawyers argued.

According to the pari-mutuel operators, the survey demonstrated that customers would spend less on pari-mutuel wagering at their facilities once sports betting comes online. But the motion said the survey had numerous flaws and called the plaintiffs' expert's analysis of it "unreliable."

"Plaintiffs' assertion that once online sports betting is offered by the tribe, they will forever lose those customers finds no support in the survey results, and plaintiffs offer no other basis for this court to make such an assumption," the government lawyers wrote. "Plaintiffs have not offered any evidence about how online sports betting would fare in Florida, and they ignore information that calls into question plaintiffs' assumption that its introduction in the state would result in immediate and transformative changes in the gaming market writ large."

The lawsuit also alleged that the sports-betting part of the compact violated the plaintiffs' equal protection rights because it established a "statewide, race-based monopoly."

But Haaland's lawyers urged the court to reject the allegation, saying "the Equal Protection Clause does not protect plaintiffs from increased market competition."

The U.S. Supreme Court repeatedly "has repeatedly rejected arguments that … federal laws singling out tribes and tribal members draw suspect racial classifications," the government lawyers wrote.

The plaintiffs have asked Washington, D.C.-based U.S. District Judge Dabney Friedrich to issue a preliminary injunction blocking the compact,

But the government's lawyers urged the judge to reject the request, saying the plaintiffs "have not, and cannot, demonstrate irreparable harm."

Gov. Ron DeSantis also has filed a motion to dismiss the pari-mutuels' lawsuit filed in Tallahassee.

In addition to the legal challenges filed by the pari-mutuels, two prominent South Florida businessmen and the group No Casinos filed another lawsuit in Washington.

The lawsuit accuses Haaland and her agency of violating federal law by allowing the compact to go into effect and failing to consider a 2018 Florida constitutional amendment that requires statewide voter approval of gambling expansions.

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