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As uncertain as the future of the Seminole Compact may be, this historic gambling agreement in Florida marked the end of tribal ambivalence toward sports betting and the consequences for both Indian and commercial gaming promise to be seismic.
Three years after the U.S. Supreme Court opened the door for regulated sports betting in the United States, gaming tribes have finally realized they can no longer afford to allow aggressive operators like DraftKings and FanDuel to dominate a sector so vital to the gaming industry's future.
"The Seminole Compact was remarkable, given the expected size and prominence of Florida's market. No other state of even close to comparable size had adopted a single source model (for sports betting)," said Behnam Dayanim, a gaming attorney in the Washington, D.C. office of the Paul Hastings firm.
That single source would be the Seminole Tribe, which would enjoy a monopoly not only on sports betting at its six casinos in Florida, but online wagers processed from all over the state at computer servers on the tribe's land.
Of course, it should be noted the Seminole Compact currently is null and void after being struck down last month as a violation of the Indian Gaming Regulatory Act (IGRA) of 1988 by a federal judge in Washington, D.C.
But it would be difficult to find any respected gambling executive who believes the Seminole Compact is just going to go away.
The consensus in commercial and Indian gaming seems to be the genie is already out of the bottle for online betting by tribes — on and off their reservations.
Attorneys for the Seminoles and Hard Rock International, which the tribe owns, are appealing the ruling by U.S. District Judge Dabney Friedrich rejecting the compact.
Friedrich also denied the tribe's appeal to continue sports betting operations until a final resolution of the case.
A three-judge panel on the D.C. Circuit Court of Appeals voted 2-1 this month to affirm Friedrich's denial.
These court rulings have provoked a discussion among gaming tribes about lobbying Congress to amend IGRA — a once-forbidden notion — to enable online wagering on servers on tribal lands.
Chris Stearns, a tribal gaming attorney in Seattle and a former chairman of the Washington State Gambling Commission, goes so far as to say sports betting could be a "harbinger" for a renaissance in Indian gaming.
"The adoption of regulated sports betting was really the first time in ages that we saw the rollout of a new gaming product on a national basis," Stearns said.
"I'd say that 2021 was the year when Indian gaming fully embraced sports betting," he added.
During the year, new markets for tribal sports betting were launched in ten states — Arizona, Connecticut, Florida, Indiana, Louisiana, North Carolina, North Dakota, Washington, Wyoming and Wisconsin.
Watching closely from afar, gaming tribes in California are honing their sports-betting propositions for the November 2022 ballot based, in part, on developments in Florida regarding the scope of mobile sports betting under IGRA.
As a sports-betting ballot war between the Seminoles and DraftKings and FanDuel over the latter pair's proposal to open up the Florida market to commercial operators continues to escalate, the potential for a truce before the November 2022 election appears increasingly remote.
DraftKings and FanDuel are more optimistic of reaching an agreement on sports betting with one or more of the myriad gaming tribes in California.
Steve Light, a political science professor at the University of North Dakota, said gaming tribes are concerned about commercial operators gaining ground in states where tribes previously were the major or only gaming operators.
"2021 is the year when tribes that took a wait-and-see approach to pursuing sports betting felt the pressure to operationalize sports betting as quickly as possible, and tribes that already had operationalized sports betting were working to expand into mobile and/or compete with commercial operators — both in-state and in bordering states," said Light, co-director at the Institute for the Study of Tribal Gaming Law & Policy at the University of North Dakota.
Light's co-director, University of North Dakota law professor Kathryn Rand, said the Seminole Compact is a win-win for the tribe and the state of Florida.
"In other states, the legalization of sports betting has created an environment in which tribes and commercial operators will compete head-to-head, particularly in mobile wagering," Rand said, referencing the likes of Arizona and Michigan.
"Whether those markets will result in win-win outcomes for tribes, states and commercial operators, or instead will result in rapid market saturation with some winners and some losers, remains to be seen."
As gaming tribes continue their forays into the sports-betting market, all that is certain is that the future is uncertain.
"States do not seem to have settled on a uniform approach, instead tailoring their legalization measures to address local constituencies, political pressures and market need," said Dayanim, the Paul Hastings attorney.
"I fully expect that to continue," he said.
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