TAMPA — They’ve got it mostly figured out in the Bible Belt. Mississippi, Arkansas, Tennessee and other red-blooded states have already legalized sports betting. They’re pretty much set in New England, too. When Vermont recently passed legislation, the entire Northeast corner was on board with gambling.
In fact, if you’re looking to put money down in-person at a betting window in the United States, you could hit up operators in as many as 35 states. And if you’re not inclined to leave your couch, half the nation also permits mobile wagers via betting apps.
Since the Supreme Court unlocked the gates for sports betting in 2018, Americans have rushed to wager more than $270 billion on various events, according to research by the Legal Sports Report.
So why is Florida still tiptoeing its way around the casino floor? Why is sports betting only now making a limited return after a two-year absence? And why is there still uncertainty about its future?
In a word, it’s complicated. Besides the bitter rivalry between the Seminole Tribe and the pari-mutuel industry, there’s the voter-mandated constitutional amendment that was designed to keep gambling in check but was sidestepped by the governor. There are still legal battles pending in federal and state courts, including a debate whether a bettor with a smartphone and an app 100 miles from a Seminole casino can be interpreted as wagering on tribal land.
Not to mention, the rest of the nation seems to think Florida cost itself hundreds of millions in tax revenues by handing the tribe a 30-year monopoly in a rapidly growing industry.
“The path chosen by the state was the one most riddled with litigation obstacles while depriving consumers of reasonable choices,” said Daniel Wallach, a South Florida attorney whose practice focuses exclusively on sports betting. “And, oddly, it deprived the state of the largest tax revenue base that could have been captured in a multioperator market.”
Complications were inevitable
To be fair, no matter what path the state chose, this was never going to be an easy lift. Too much money at stake, too many conflicting opinions about the potential side effects of gambling in communities, too many arguments about legal technicalities.
To set the stage on where we are today:
Once the Supreme Court ruling came down in May 2018, states across the nation scrambled to set up partnerships with mobile betting sites such as FanDuel, DraftKings, BetMGM and Caesars Sportsbook. Betting apps are insanely popular and, judging from advertising expenditures, soon to be as lucrative. Massachusetts, where sports betting became legal 15 months ago, already has eight different operators offering mobile wagering, and two more have licenses but are not yet online.
In Florida, the equation was more convoluted because the state already had an agreement — known as a compact — with the Seminole Tribe to operate casinos. The tribe guarantees the state a minimum flat rate in exchange for exclusivity in certain types of gaming.
With that in mind, and also considering voters had passed an amendment that required ballot approval for any expansion of casino gambling in the state, Gov. Ron DeSantis signed a new compact with the Seminoles in 2021 that gave the tribe exclusive rights to sports betting (and also added craps and roulette to their casinos, as well as approval for three new casinos in Broward County) in exchange for a $500 million annual payment to the state for the first five years of the deal, with the potential for bigger payouts down the road.
The sports betting component constitutes about $50 million of that compact payout.
Massachusetts, which has about a quarter of the population of Florida, has been averaging close to $10 million a month in taxes on sports betting, which suggests Florida could be leaving hundreds of millions on the table every year by not courting, and taxing, outside operators.
DeSantis later said the deal with the Seminoles was his best option to maneuver around the constitutional amendment.
“I can only negotiate with the tribes,” he said in 2021. “I cannot do any gambling outside of that per the amendment that passed in 2018.”
Other paths may have worked
That opinion was not unanimous among state legislators. Nor was it viewed kindly by pari-mutuel operators who have been in a constant battle with the tribe to keep their doors open with poker rooms and whatever other options are not deemed proprietary to the Seminoles.
Former state Sen. Jeff Brandes of St. Petersburg proposed legislation in both 2020 and 2021 that would have set up sports gambling operations through the Florida Lottery with annual license fees of $100,000 and including a 15% tax rate. The bills died in committee.
Brandes argues that the growth of sports betting has been so rapid nationally, there is no telling how much more money Florida could have made by taxing independent operators instead of accepting a flat rate from the tribe.
“We’ve essentially given the tribe a monopoly on sports betting for the next (30) years,” Brandes said. “(I’m) a Republican who believes in free and open markets, and at the first opportunity we decided to go away from free and open markets. This was the short play. It resolved other issues that the state just didn’t want to take on with the tribe. This was the carrot that they gave the tribe without a lot of thought and definitely without a lot of review of the finances.”
Giving the tribe the exclusive rights means bettors cannot shop around for the best odds among competing online sites, and it also takes away the bonus bets and other enticing deals offered by rivals to attract customers.
And, as it turned out, the new compact still opened the state up to ongoing lawsuits that delayed the introduction of sports betting and have already deprived Florida of at least two years of potential revenues.
Pari-mutuel operators in South Florida have sued in both state and federal court, arguing that the government allowed the Seminoles to overstep their limitations by offering mobile betting off tribal land, and that the new compact violates the constitutional amendment requiring voter approval of casino expansion.
A judge initially agreed with the federal lawsuit — saying the argument that mobile bets were technically still made on tribal land because that’s where the computer servers are housed was “fiction” — and the Seminoles shut down sports betting just weeks after it began in 2021. A federal appeals court later reversed the ruling and the U.S. Supreme Court refused to block the appeals court decision last month.
That led the tribe to announce on Nov. 1 that in-person sports betting would begin Dec. 7 at its three South Florida casinos and Dec. 8 at the Hard Rock Hotel & Casino in Tampa. Days later, the Hard Rock relaunched its mobile app on a limited basis. The app is available for those who initially downloaded it in 2021 and for members of the casino’s loyalty program. The Hard Rock is also taking names for a waiting list and is poised for a major online expansion once the pending court cases are resolved.
The Hard Rock is ramping up interest with its X (formerly Twitter) account, sending out daily examples of gambling paydays, including one bettor who recently put down $500,000 on a four-leg parlay that turned into a $5.5 million winner when the Houston Texans kicked a last-second field goal to beat the Cincinnati Bengals.
“The Hard Rock app has actually gotten a lot of good reviews. The odds are competitive, the app is very user-friendly,” said Bill Speros, a senior betting analyst at Gambling.com Group. “It doesn’t have nearly the variety that DraftKings has in terms of parlays or other exotic wagers, but for someone who is a casual bettor or even a heavy player, it’s very easy to use. And the fact that the Supreme Court refused to grant a stay means the app isn’t going anywhere, at least for a while.”
Questions still remain
Based on the latest maneuvers, neither the federal nor the state cases are expected to be resolved until sometime in 2024. That means sports betting in Florida likely will continue unmolested in the near term.
Is there a chance either lawsuit could eventually prevail and send Florida back to the starting line? Wallach, the South Florida attorney, said the current state Supreme Court has been presented with 14 lawsuits seeking the same type of relief that the pari-mutuel organizations are seeking, and the justices have ruled in favor of DeSantis and the state every time. The federal suit has a better chance at success, but there’s no guarantee the U.S. Supreme Court will agree to hear it.
In the meantime, the Seminole Tribe is forging ahead and Florida is now the largest state in the nation with legalized sports betting. Whether you celebrate the arrival of sports betting or bemoan the way it was rolled out, the fact remains that Florida is poised to become a gambling mecca.
“We’re talking about over 100 million unique visitors to the state, combined with what is already the third-most-populous state and hundreds of miles of pristine beaches with warm weather,” Wallach said. “This is sort of a perfect storm that would transform Florida into the No. 1 sports betting market in the country in terms of wagering transactions, operator revenues and state tax collections.
“However, in this instance, the state has left a lot of money on the table by taking such a low revenue share in exchange for granting the Seminole Tribe a monopoly.”
John Romano can be reached at email@example.com. Follow @romano_tbtimes.