by: Max Landaw

The process for legalizing sports wagering just got a lot easier.  Recently, and as we discussed in a previous post, the United States Supreme Court denied a petition for certiorari in the case West Flagler Associates v. Haaland, affirming the U.S. Court of Appeals for the District of Columbia’s holding that the compact between the Seminole Tribe of Florida and State of Florida, which legalized sports wagering, did not violate the Indian Gaming Regulatory Act (IGRA).  This decision will potentially allow governors in other states to renegotiate their compacts with Native American tribes in their states to legalize sports wagering, as opposed to going through the lengthier and more burdensome legislative process. 

The decision to deny cert in June ends the Florida sports betting rollercoaster which began when Florida governor Ron De Santis amended Florida’s compact with the Seminole Tribe in 2021, authorizing sports wagering when the servers used to process sports wagers are located on Seminole lands.  The IGRA is a federal law which allows, among other provisions, states to enter into compacts with tribes to allow for gaming which may not otherwise be permissible on non-tribal land.  In Florida’s compact with the Seminoles, the Seminoles were essentially given a monopoly with respect to mobile sports wagering.  This allowed Governor De Santis to bypass legislative legalization of sports wagering.

Soon after execution of the new compact, groups of brick-and-mortar casinos in Florida filed suit in federal district court, stating that the compact allows for gaming outside of tribal lands, violating the IGRA.  The contention, which the district court agreed with, was that since the compact allows for the possibility of Florida residents outside of tribal territory to engage in Class III gaming (sports wagering is within the IGRA category of Class III gaming), such gaming would violate the IGRA, which only allows regulation of tribal gaming inside tribal territory.  In other words, plaintiffs contended that putting servers on tribal land was essentially a loophole to bypass legitimate legalization.

On appeal, the DC Circuit disagreed stating that “The Compact ‘authorizes’ only the Tribe’s activity on its own lands, that is, operating the sports book and receiving wagers.  The lawfulness of any other related activity such as the placing of wagers from outside Indian lands, under state law or tribal law, is unaffected by its inclusion as a topic of the Compact.”  Compacts are allowed to discuss “a litany of other topics” outside of authorizing gaming on tribal lands and what Florida residents may do outside of tribal lands does not per se violate the IGRA.

However, the DC Circuit left the question whether the compact violates state law open, “Whether it is otherwise lawful for a patron to place bets from non-tribal land within Florida may be a question for that State’s courts, but it is not subject of this litigation and not for us to decide.”

So, what does this mean for the rest of the United States with respect to sports wagering?  While more than half of all US states have already legalized sports wagering, the West Flagler decision allows the states that have not yet legalized sports wagering a new and easier path to legalization.  Instead of going through the legislative process, which can be onerous, to legalize sports wagering statewide, according to the West Flagler decision, states can now amend their compacts with the Native American tribes in their states to sanction sports wagering as long as the servers which process such wagering are located on tribal lands.

We saw, for example, in 2022 when California attempted to legalize sports wagering through the referenda process, certain interest groups came out strongly against legalization.  Ultimately, Propositions 26 and 27, which would have legalized sports wagering in California, failed.  With the West Flagler decision, governors have much more unilateral power to renegotiate their compacts with the tribes to effectively legalize sports wagering throughout the state as long as the servers that accept the wagering are on tribal lands.

Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE.