DeSantis may need Biden to rescue $2.5B gambling deal

TALLAHASSEE — Gov. Ron DeSantis may need help from his number one adversary: President Joe Biden.

A federal court ruling late Monday night scuttled a $2.5 billion dollar gambling deal DeSantis negotiated with the Seminole Tribe of Florida earlier this year. The ruling could halt sports betting in the nation’s third largest state amid questions over what can be done to salvage the endeavor.

The fate of the deal could depend on whether the U.S. Department of Interior, which was responsible for approving the compact, decides to appeal the decision by U.S. District Judge Dabney Friedrich, an appointee of former President Donald Trump. The tribe tried to intervene in the ongoing legal challenge but the judge turned down their request, although lawyers for the tribe on Tuesday evening appealed that decision as well as the entire ruling.

Right now the department isn’t commenting. DeSantis himself did not know about the decision until asked about it by a reporter at an early morning press conference in Fort Lauderdale on Tuesday.

But it puts the governor — who routinely rails against Biden and is caught in legal clashes with the administration over vaccine mandates, cruise ships and immigration — in a very awkward spot.

“We are reviewing the court’s perplexing ruling, which certainly contains appealable issues,” said Christina Pushaw, a spokesperson for DeSantis. “Because neither the Seminole Tribe nor the state of Florida are parties to the case, it is unclear what if any immediate impact the ruling has in Florida. We look forward to working with the tribe to ensure the future success of the compact.”

The tribe isn’t waiting to see what the Department of Interior does and filed its own notice of appeal. Lawyers for the Seminoles also asked that Freidrich’s ruling be placed on hold while they pursue the appeal.

“The tribe’s economic and sovereign interests will be irreparably injured if a stay is not issued pending resolution of the serious legal issues posed on the tribe’s appeal,” states the motion. “Any harm to other parties is still speculative at best, and the public interest weighs in favor of maintaining the public benefits of the 2021 Compact and preserving the status quo, which is to allow an activity approved under federal, state, and tribal law to continue pending the outcome of the appeal.”

Marcellus Osceola Jr., chair of the Seminole Tribal Council, said in an affidavit accompanying the motion has hired more than 200 employees and spent millions expanding its operation and launching sports betting. He said the tribe has spent $25 million on sports betting so far and has already paid more than $70 million in payments to the state.

Florida lawmakers in May handed DeSantis a significant win when they approved the 30-year compact, giving the tribe control over sports betting in Florida — including through a mobile app that would allow someone to make a wager regardless of where they were in the state.

That same agreement also let the Seminoles adds craps and roulette to their existing casinos, as well as build new additional casinos on tribal-owned land in South Florida. The deal was designed to replace an earlier deal that fell apart amid acrimony and finger-pointing.

Gambling rivals as well as long-standing gaming opponents objected to the deal and, in a pair of lawsuits, sued the Department of Interior over its approval of the compact because the agency allowed the compact to become law back in August. Their main argument: The deal violated federal Indian gaming laws because it allowed gambling outside of tribal lands. Backers had asserted such an arrangement could withstand legal scrutiny because the actual bet was handled administratively on tribal property.

Freidrich, however, sided with opponents and said “this court cannot accept that fiction. When a federal statute authorizes an activity only at specific locations, parties may not evade that limitation by ‘deeming’ their activity to occur where it, as a factual matter, does not.”

Freidrich also maintained that sports betting could not be allowed outside of tribal lands because the state’s voters did not approve it. Florida voters in 2018 had approved a citizen initiative that required future expansions of casino gambling to go on the ballot — although the mandate does not apply to tribal lands.

John Sowinski, president of No Casinos, which opposed the compact, called the ruling a “vindication” that echoed what gambling opponents had told legislators.

“It’s what we said from the beginning — it doesn’t pass the sniff test to say a bet made in downtown Orlando or downtown Miami or downtown Jacksonville takes place on tribal lands,” Sowinski said.

DeSantis on Tuesday said he knew that the argument over sports betting was an “unsettled legal issue” but he defended including it in the final deal. He said it “made sense” because voters would have likely approved it if it went before them.

State Rep. Randy Fine, a Brevard County Republican who helped steer the gambling legislation earlier this year, predicted on the House that the sports betting portion of the compact would get struck down by the courts. But Fine was incensed that Freidrich wiped out the other parts of the deal, such as adding roulette to the Seminole’s casinos. Legislators had included a clause that said other parts of the agreement could go ahead even if sports betting was ruled illegal — but the Department of Interior did not point that out to the judge.

“I don’t know if Joe Biden is intentionally screwing Florida, but this didn’t have to happen,” said Fine, a frequent critic of the Biden administration. “Their failure to argue it is inconceivable and unacceptable … Joe Biden owes the state of Florida $500 million a year forever.”

Yet who exactly is to blame is still a point of contention. Daniel Wallach, a gaming and sports betting attorney based in Florida, said that responsibility didn’t rest with the Interior department.

“It’s not their compact, it’s not their fight,” said Wallach, who instead put the blame on the Seminoles because they sought to intervene in the case without trying to defend the entire compact.

Wallach predicted that the department could wind up appealing the ruling, but said the chance of winning was low.

“The better path for the state and Seminole tribe is go back and approve a new compact,” Wallach said.

One possible solution is to have state legislators — who have struggled to balance competing gambling interests against each other — get back into the fray. Friedrich in her ruling suggested that legislators could go back and authorize sports betting at tribal casinos only, or that voters could authorize it at the ballot box.

In a joint statement, state House Speaker Chris Sprowls and Florida Senate President Wilton Simpson sidestepped any questions of what they may do next. The two Republican legislative leaders said that the ruling “addresses novel and complex legal issues. We believe the case will be appealed to the DC Circuit, and perhaps ultimately, the Supreme Court of the United States. In the meantime, we will be watching.”

Voters in 2022 could also have the final verdict when there could be two constitutional amendments on gambling on the ballot — if organizers can gather up the nearly 900,000 signatures they need by February. One amendment — pushed by Las Vegas Sands — would allow new casinos at existing cardrooms if they are located more than 130 miles away from Seminole casinos.

Gambling companies DraftKings and FanDuel are bankrolling an initiative that would authorize sports betting throughout the state and not just through the Seminole Tribe. The two companies have already put $32 million into the effort. The group sponsoring the amendment — Florida Education Champions — said Tuesday they have already have collected more than 500,000 signatures and their focus remains on continuing that effort.

“Our effort was always mutually exclusive from the compact,” said Christina Johnson, a spokesperson for Florida Education Champions. “Now is the time for all entities to come together so we may provide a competitive legal sports betting market for Floridians, while generating the expected hundreds of millions of dollars in annual revenues for the Florida Educational Enhancement Trust Fund.”