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Seminole Tribe Would Reduce Revenue Share Without FL Mobile Betting

Seminole Gaming CEO Jim Allen said Hard Rock Digital could be ready to launch both legal and mobile state-wide sports betting in Florida when the practice becomes officially legal on Oct. 15.

But if a series of lawsuits filed in state and federal court by other gambling companies take away their ability to offer mobile sports betting, Allen said, the Seminoles will reduce the amount they are scheduled to pay the State of Florida annually.

As part of that 30=year compact, the Seminole Tribe is scheduled to pay $500 million yearly for the right to offer retail and mobile sports betting and adding roulette and craps to its casino offering.

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Specific Florida betting model coming under legal pressure for Seminole foes

Retail sports betting is not the issue.

At issue is a so-called hub-and-spoke model which would allow the Seminoles, through their Hard Rock Digital brand, to offer state-wide mobile betting with servers housed on tribal lands. This provision is unprecedented in previous compacts with states and their native tribes and has come under legal scrutiny. A former National Indian Gaming Association vice-chair on Monday deemed it “kind of vulnerable.”

Allen was asked about possible next moves by his company specifically if hub-and-spoke was invalidated, but answered in terms of the entire compacted being stricken.

“Let’s assume the whole process is struck down,” Allen said on Wednesday at the Global Gaming Expo in Las Vegas. “Then obviously the compact is no longer valid. We would discontinue our revenue share to the state of Florida. And then we would certainly look at our options going through a constitutional amendment or referendum process.”

Allen noted that the State of Florida and the Department of the Interior were the parties being sued.

The Department of the Interior gave its tacit approval in neither rubber-stamping nor striking down the deal in the approval process in August. But lawsuits were subsequently filed by West Flagler Associates, which owns a South Florida poker room and pari mutuel outlet, seeking to stop the launch of mobile because they claim it violates the Indian Gaming Regulatory Act. Other suits have followed.

“We went through the process, we obtained full approval from the House, Senate and governor of the State of Florida,” Allen said. “We submitted to the Secretary of Interior. Not only did we receive the approval, but we actually received a 14-page letter that defined why it’s legal.”

In his summation, Bureau of Indian Affairs assistant secretary Bryan Newland noted that tribes should be allowed to explore avenues not specifically excluded by IGRA.

The deal could provide a lifeline for the state pari-mutuel industry, even the one suing the state and the Department of the Interior to stop the deal. Allen said the owners of the Magic City Casino and Bonita Springs Poker Room have negotiated with the Seminoles to serve as one of their sports betting “spokes” while litigating.

“They wanted to make sure they don’t lose their opportunity,” Allen said. “So yes, they responded. Yes, they called. We said, ‘We’re happy to talk to you.’ … And then they had a lawyer say, ‘Well, even if they lose, they want to make sure they’re not losing their opportunity.’ And, of course, we said, fine. I mean, it’s childish, right? Childish.”

Allen theorized that the process of deciding the legality of the hub-and-spoke system could take “years.”
“I guess if someone takes it all the way there, the Supreme court, it could go,” Allen said.

Withholding revenue share no hollow threat for Seminoles

The Seminoles have cut off revenue share payments before. In 2019, they stopped $350 million yearly payments when the state failed to enforce its exclusivity on certain banked card games.
Allen mentioned a voter referendum as another possible avenue to legal sports betting in Florida off tribal lands, even though in 2018 the Seminole Tribe and Disney underwrote most of the funding for a successful constitutional amendment to limit the expansion of gambling in the state. Allen deferred comment on Disney’s current thoughts on sports betting, although ESPN might have sportsbook aspirations.
The current Seminoles compact was spearheaded by Gov. Ron DeSantis and won broad support among state legislators. Allen hopes that could be reflective of a change in voter opinion, too.
“In today’s environment, with a topic is like gambling, I mean, where do you see that type of bipartisan support?,” Allen asked. “I think we’ve done a really good job of educating the governor, both parties, that the long-term partnership with us is a good one.
“We’re not afraid of constitutional amendments. We’ve done them in the past and we’ve been successful. I certainly wouldn’t do that without talking to the State of Florida. We would work with them. They’re our partner.”


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