Five pari-mutuel operators have signed marketing agreements with the sovereign nation that owns Hard Rock International and holds a Class III gaming compact with the state. They are: the Palm Beach Kennel Club, Hialeah Park Casino, Ocala Gainesville Poker and Ocala Breeder’s Sales, Tampa Bay Downs, and TGT Poker and Racebook in Tampa.
Those are the first “spokes” in a “hub-and-spoke” concept detailed in the compact that was amended earlier this year. It includes retail and mobile sports betting statewide, new casinos, and the introduction of roulette and dice table games at its tribal casinos.
Seminole Gaming CEO and Hard Rock International Chairman Jim Allen said in a statement that the Seminoles are committed to working with pari-mutuel operators as partners in sports betting.
They are an important component for the coming launch of sports betting throughout the state of Florida,” he said. “We have already exceeded the Compact’s requirement for a minimum of three pari-mutuel agreements and we look forward to developing more relationships with pari-mutuels around Florida.”
The amended compact required the Seminoles to increase its payments to the state by 2 percent to 15.75 percent of net win if it did not secure three pari-mutuel partners within three months of its federal approval.
Florida is expected to receive $2.5 billion in revenue from the tribe’s gaming operations over the next five years, and up to $6 billion overall by 2030. Earlier this month, the Seminoles made the first payment of $37 million to the state.
“The Gaming Compact is a mutually-beneficial partnership between the State and Seminole Tribe that positively impacts all Floridians,” Seminole Tribe of Florida Chairman Marcellus Osceola Jr., said. “In addition to our revenue sharing contributions, we are hiring hundreds of Floridians and investing millions of dollars in the state.”
Federal Officials Question Hub-and-Spoke
Under the hub-and-spoke agreement, the pari-mutuel operators will market sports betting to their customers and retain 60 percent of the profits generated from their facilities. They will serve as retail sports betting outlets, along with the Seminole Gaming casinos, which are located on tribal lands.
The US Department of the Interior announced in August that it deemed the compact approved when it took no action after a 45-day review. However, that approval is only “to the extent that the compact is consistent with the” Indian Gaming Regulatory Act.
In the letter, Principal Deputy Assistant Interior Secretary Bryan Newland specifically pointed out that the federal government did not endorse the hub-and-spoke model. That’s because it raised questions about whether the Seminoles maintained “sole proprietary interest” by sharing such a high percentage of the revenue.
Federal officials were also concerned with a provision in the compact that gave Florida jurisdiction over patron disputes. Newland said in the letter that that part of the compact was likely not enforceable.
Florida Compact Attracts Lawsuits
The statewide partnership with pari-mutuels, and the statewide mobile sports betting portions of the compact, have also attracted lawsuits in federal court.
The Magic City Casino and the Bonita Springs Poker Room, two pari-mutuel operators owned by the same company, filed two suits. The first was in July in a Florida federal court against Florida Gov. Ron DeSantis and Secretary of Business and Professional Regulation Julie Brown. The second came a month later against the US Interior Department and Interior Secretary Deb Haaland in DC federal court.
Last week, a Florida federal judge moved to dismiss the case, claiming the pari-mutuels lacked standing to sue state officials. Judge Allen Winsor gave the pari-mutuel operators seven days to amend their complaint, and after that passed without a new filing, Winsor dismissed the case without prejudice. That means the plaintiffs could refile again at any point.
Meanwhile in the DC courts, Haaland and the Interior Department have moved to dismiss the case against them as well, also claiming that the plaintiffs have no case against them.
The compact has attracted another lawsuit as well, also in the DC federal court. Last month, No Casinos, a Florida anti-expanded gaming group, and others who opposed the compact filed suit against Haaland and the Interior Department. The plaintiffs in that case claim the federal government, by approving the Seminole compact, allowed the state to circumvent a constitutional amendment that requires Florida voters to approve any efforts to expand gaming.