Abstract
On June 30, 2023, a panel of three judges on the U.S. Court of Appeals for the District of Columbia Circuit—the nation's most important court behind the U.S. Supreme Court—voted 3–0 to “keep intact” the 2021 sports betting compact between the Seminole Tribe of Florida and the State of Florida. Narrowly, the 24-page ruling penned by Judge Robert L. Wilkins and joined by Judge J. Michelle Childs and Judge Karen LeCraft Henderson teed up legalized sports wagering to return to the Sunshine State in the near future. More broadly, the decision bolsters sports gambling exclusivity rights for tribes entering into duly-authorized compacts under the Indian Gaming Regulatory Act (“IGRA”).
The underlying case—formally titled West Flagler Associates, et al. v. Haaland—involved Florida-based private sector casinos suing Debra A. Haaland in her capacity as secretary of the U.S. Department of the Interior. The plaintiffs challenged the Interior Department's authority to approve the Seminole Tribe-Florida compact and its online sports betting provisions. The plaintiffs contended that the compact “impermissibly authorizes gambling outside of Indian lands, violating IGRA” (p. 3) (emphasis in original). The plaintiffs also argued that the compact “violate[d] the Wire Act, the Unlawful Internet Gambling Enforcement Act (“UIGEA”), and the Fifth Amendment…” (p. 3). At the district court level, the plaintiffs prevailed with the judge concluding that the compact “‘attempts to authorize sports betting both on and off Indian lands[,]’ in violation of ‘IGRA's ‘Indian lands' requirement’” (p. 3).
The appellate court unanimously reversed. In relevant part, the court reasoned:
The District Court erred by reading into the Compact a legal effect it does not (and cannot) have, namely, independently authorizing betting by patrons located outside of the Tribe's lands. Rather, the Compact itself authorizes only the betting that occurs on the Tribe's lands; in this respect it satisfied IGRA. 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 the subject of this litigation and not for us to decide.
The last sentence of the preceding excerpt is key. The court effectively punted on the precise question permeating the entire case: Does online sports wagering take place on Indian lands if the computer servers are on-site but the customers are not? 1 The answer to this yet-to-be-resolved question looms large. For the time being, the recent decision by the U.S. Court of Appeals for the District of Columbia Circuit provides a stamp of approval for the Seminole Tribe-Florida compact. As a result, sports betting—online, in-person, or both—could re-appear in Florida soon.
The appellate court rationalized its IGRA-specific conclusion by looking to precedent. The court cited the Supreme Court's Michigan v. Bay Mills Indian Community case for the finding that the IGRA “regulate[s] gaming on Indian lands, and nowhere else” (p. 4). 2 This “core teaching” of the case permeated the appellate court's discussion of how the IGRA expressly permitted the compact to address a myriad of sports betting topics (p. 10).
As to whether the compact's underlying language was ambiguous on the “off-site” issue, the court looked to its prior decision in Papago Tribal Utility Authority v. FERC for the proposition that “a contractual provision should, if possible, be interpreted in such a fashion as to render it lawful rather than unlawful” (p. 11). 3 Indeed, the court pinpointed the non-online sports betting content in the compact, including “in-person sports betting at the Tribe's casinos” (p. 15). The court ended its IGRA-related discussion by emphasizing its “narrow conclusion” and effectively telling the plaintiffs to file a follow-up lawsuit in state court to tackle the dispositive “location” issue (p. 17).
The court of appeals disposed of the plaintiffs' other claims in quick order. First, the court concluded that “[t]here is no support for the novel and sweeping argument that the Wire Act poses such a broad obstacle to an Indian tribe's ability to offer online gambling on its own lands” (p. 19). On the plaintiffs' UIGEA argument, the court left the door open: “How the Tribe and Florida ultimately implement the Compact in practice, and whether that implementation is consistent with UIGEA, may be the subject of a future lawsuit, but the Compact does not as a facial matter violate UIGEA” (p. 20). Finally, as to the plaintiffs' Fifth Amendment equal protection clause claim, the court found such claim to fail as a matter of law given the constitutionality of promoting economic development of federally-recognized tribes (p. 20–21). 4
With West Flagler Associates, et al. v. Haaland now having an appellate-level ruling, the losing plaintiffs could appeal for a rehearing en banc or file a cert petition to the U.S. Supreme Court. If the plaintiffs opt for the latter, they will likely posit that the new ruling created a “circuit split” with a 2018 decision: California v. Iipay Nation of Santa Ysabel, et al. 5 At the same time, the U.S. Court of Appeals for the Ninth Circuit—the largest appellate circuit in the nation and covering the entire western portion of the country—also has a related case percolating. In Maverick Gaming LLC v. United States, 6 the Ninth Circuit will be tasked with deciding many of the same issues presented in the West Flagler case.
The Seminole Tribe offered online sports betting in the state of Florida for about a month in late 2021. As a result of the new appellate court ruling, mobile sports wagering could potentially return two years later.