TRIBAL GAMING
Procedural history – the West Flagler parties push back Just five days after the 2021 Compact went into effect, two Florida pari-mutuels — West Flagler Associates, Ltd., which then operated Magic City Casino in Miami, and Bonita–Fort Myers Corp., operator of Bonita Springs Poker Room (together, West Flagler) — sued Interior in the U.S. District Court for the District of Columbia. A Florida anti-gambling expansion group called No Casinos led another lawsuit against Interior. The court considered the two suits together, with West Flagler Associates, Ltd. v. Haaland (West Flagler) as the lead case. West Flagler argued the 2021 Compact’s online sports betting provisions were invalid not only under IGRA, but also under the Interstate Wire Communications Act (Wire Act), 9 the Unlawful Internet Gambling Enforcement Act (UIGEA), 10 and Fifth Amendment equal protection principles. Therefore, West Flagler asserted, Interior’s deemed approval of the agreement violated the Administrative Procedure Act. By attacking the 2021 Compact in this circumspect manner, West Flagler attempted to avoid naming as defendants the actual parties to the agreement — i.e., the Tribe and the State, each cloaked in sovereign immunity. 11 The Tribe sought to assert its sovereign immunity, seeking to intervene for the limited purpose of moving to dismiss the case. Meanwhile, as permitted by the 2021 Compact, the Tribe prepared to launch online sports betting, which went live through the Tribe’s Hard Rock Bet platform on November 1, 2021. On November 22, 2021, Judge Dabney Friedrich of the D.C. District Court ruled in favor of West Flagler and denied the Tribe’s motion as moot. 12 Deriding the “deeming” language in the 2021 Compact and Implementing Law, Judge Friedrich determined that an IGRA compact could not include off-
(the 2021 Compact), agreed to in conjunction with State law amendments ratifying and implementing the agreement (the Implementing Law). 8 Together, the Implementing Law and the 2021 Compact authorized the Tribe to conduct new forms of gaming with substantial exclusivity, including a first-of-its-kind arrangement for the Tribe to conduct statewide online sports betting operated from servers based on the Tribe’s Indian lands. In exchange, the Tribe agreed to resume and increase its revenue sharing payments, with US$2.5 billion guaranteed to the State over the first five years. Because the Secretary did not affirmatively approve or disapprove the agreement within 45 days, the 2021 Compact took effect by operation of law, or “deemed approval,” on August 11, 2021. The Implementing Law was a necessary component of this online sports betting model, sometimes called a “hub-and- spoke” model, in which the bettors — users placing wagers from mobile devices physically located throughout the State — are the “spokes,” and the Tribe — where those wagers are received and processed by the Tribe’s servers, physically located on Indian lands — is the “hub.” In the hub-and- spoke model, IGRA, which can only authorize gaming on Indian lands, authorized the “hub” activities of receiving and processing wagers, while the Implementing Law authorized the “spoke” activities of placing those wagers off Indian lands. Further, both the 2021 Compact and Implementing Law deemed the “spoke” activities —placing wagers — to occur on Indian lands for regulatory purposes. Using IGRA, this then shifted regulatory jurisdiction over the “spoke” activities to the Tribe, allowing the Tribe to regulate both the “hub” and “spoke” activities — meaning, the entire online sports wagering transaction — from start to finish. This allowed the Tribe to apply its Indian gaming expertise as the primary regulatory authority for its online sports betting operations.
8 Codified at Fla. Stat. § 285.710. 9 18 U.S.C. §§ 1081–1084. 10 31 U.S.C. §§ 5361–5367.
11 West Flagler’s separate suit over the 2021 Compact against the Governor and other state officials was dismissed. W. Flagler, Assocs., Ltd. v. De- Santis , 568 F. Supp. 3d 1277 (N.D. Fla. 2021), voluntarily dismissed on appeal sub nom. W. Flagler Assocs., Ltd. v. Governor of Fla ., No. 21-14141, 2021 WL 7209340 (11th Cir. Dec. 20, 2021). 12 W. Flagler Assocs., Ltd. v. Haaland , 573 F. Supp. 3d 260 (D.D.C. 2021).
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IMGL MAGAZINE | MARCH 2025
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