The gaming compact between the State of Florida and The Seminole Tribe of Florida may now be in jeopardy after a legal challenge was issued by a Miami-based casino operator last Friday.
Southwest Parimutuels, the parent company of the Bonita Springs Poker Room and Magic City Casino located in Miami, filed a lawsuit last week in the US District Court that alleges the pact between Florida and the Seminoles does not adhere to current federal regulations.
The point of disagreement is the inclusion of mobile sports betting applications and how they will be dealt with in the Sunshine State.
As currently written, the compact allows for legal sports betting in Florida via mobile sportsbook apps as of October 15th of this year.
Any sports betting that is not taking place on Native American lands is in dispute, and if these Tribal casino-based online sportsbooks take flight in mid-October, wagers will be taking place from every square inch of the state on phones and PCs by 21+ gamblers.
While the stance of the litigants would seem to be based on legal ethics, there are hundreds of millions of dollars at stake by their racinos missing out on the online sports gambling market.
Sure, in-person domestic sportsbooks are able to generate a moderate amount of profit on sports betting revenues, but nothing when compared to the profits that are raked in by online wagering.
Human beings are big fans of convenience, and when betting on the NFL from the beach is an option, patrons will certainly choose that route over traveling several miles to a retail sportsbook.
Just glance at the state-by-state sportsbook revenue totals and compare the handle, hold, and revenues in the regions that allow for mobile sports betting to the ones that do not.
The proof is in the numbers. Mobile and online sports betting simply generate more revenue while also creating a scenario where brick-and-mortar venues become an afterthought.
With Florida’s racetrack casinos cut out of the online sports betting action, all of the proceeds will be directed to the Seminole Tribe of Florida.
The racino conglomerate is citing the Federal Wire Act to support their legal challenge. The Act was installed in 1961 to prohibit monetary transactions over the phone for the purposes of gaming, but is now is mostly used to stop online financial transfers for interstate gambling.
Basically, because the online sportsbook servers will be located on Native American lands, it would constitute an interstate transfer of funds via electronic means.
The compact is still under the 45-day review process from the US Department of Interior, whose judgment will further clarify the legalities of online sports betting in Florida.
If the 45-day deadline passes without a judgment from the feds, the compact becomes active by default. Considering the fiscal magnitude in play, we expect that this compact was placed at the front of the line and that a decision will be rendered on it in the coming days.
That outcome will likely make or break Southwest Parimutuel’s lawsuit.
