By choosing to do nothing regarding the Seminole Tribe‘s controversial compact with Florida, the U.S. Supreme Court did A Very Big Thing indeed. The high court declined to re-hear West Flagler Associates‘ challenge to the compact, effectively putting it into law. Subplots to this mean that both Jeffrey Soffer and Donald Trump can proceed with their Miami-area casino plans, which are juiced in by the compact. But both men have much bigger fish to fry right now. All attention will instead be on the Seminoles and what they do with their USDA-approved monopoly on iGaming and online sports betting (OSB) in the Sunshine State.
Only person on SCOTUS seemed aware of the sweeping ramifications of the court’s inaction. That’d be Justice Brett Kavanaugh, the lone vote in favor of hearing the case. (Justice Ketanji Brown Jackson abstained for ethical reasons.) When the Seminole ball came bouncing through SCOTUS the first time along, Kavanaugh and he alone raised concerns about how the compact would de facto rewrite the Indian Gaming Regulatory Act. By extending “tribal lands” to contain all of Florida’s cyberspace, the state and the high court have taken a radically activist approach to Native American gaming rights and, most would say, run a cart and horses through IGRA’s intent. The revered John McCain, father of IGRA, must be rolling over in his grave.
Analysis of this non-decision decision was slow in coming but one Wall Street thinker was quick off the mark. Carlo Santarelli of Deutsche Bank wrote that the non-ruling (and the compact) constituted a “blueprint” for tribes in California to seize the initiative—and sports betting. No longer do they have to go through the costly and extremely adverse ballot-question process, one they’re unlikely to win. Instead, they can simply (well, nothing in compacting is ever simple) amend their contracts with the Golden State to include sports betting in all its forms. Ditto iGaming.
SCOTUS, per Santarelli, has in effect decreed that “as long as the servers accepting the bets are on tribal facilities, online wagering falls within the compact.” Which leaves the private sector on the outside looking in, miserably. Sure, DraftKings, FanDuel and their ilk can contract with individual tribes to be their provider. But OSB providers are exponentially outnumbered by California tribes that have gambling-enabled status. Besides, tribes in Arkansas and (yes) Florida have shown that they can strike forth on their own. If California is suddenly your exclusive online sinecure do you really need Jason Robins? Unless it can persuade the voters otherwise, Big Gaming is about to find itself dealt out of the Golden State pot.
“Much like Florida, however, should the tribes successfully amend the compact, the opportunity for the traditional online operators would remain cloudy,” wrote Santarelli. Those who think the tribal doors will swing open with for the OSB giants are accepting an argument that “lacks an understanding around tribal politics.” At least FanDuel’s Amy Howe and one or two others have made nice with tribes since the 2022 electoral debacle and might get a seat at the table. But again, barring multi-tribe pacts (currently unlikely) they’re going to have to partner with one tribe out of dozens.
Santarelli again: “Moreover, given the sensitivity around the control of gaming in the state, we believe it is naïve to expect the tribes to turn over any element of gaming to outside entities, without a significant and ongoing financial return.” The same holds doubly true for Florida, a more pressing problem. There, the big boys seem to think the Seminoles are going to fork over big chunks of a very lucrative pie out of the goodness of their hearts. Not bloody likely.
West Flagler could gum up the Floridian works until 2026 or so but Seminole iGaming and OSB are now inevitabilities, and 16 million Florida residents are their whale-sized oyster. Thanks to Gov. Ron DeSantis‘ largesse, the Seminoles have an online stranglehold through 2051, so they could hunker down on their tech for the next 27 years or … Hire DraftKings or FanDuel to be their vassal, er, tech provider and still run it themselves. Or they could partner with an OSB mammoth, although it’s presently unclear what the incentive (besides superior tech and brand loyalty) would be. It’s the Seminoles’ ballgame now and everybody else has to pay to play.