Supreme Court Inaction Opens the Door for Tribal Gain

In June, the United States Supreme Court declined to hear a challenge to the Seminole Tribe’s agreement granting the exclusive right to sports betting within the state of Florida under their Hub-and-Spoke model, part of the compact agreement between the Tribe and the state. The only true online sports betting application or site that is legal within the state is the Seminole’s Hard Rock Bet.

The Hub-and-Spoke model means that online bets placed by individuals across the state of Florida, not physically made on tribal lands, are still considered to be made within reservation territory because the servers receiving the bets are on Seminole land. Physical casinos within Florida sued in federal district court to find that the Hub-and-Spoke model violated the Indian Gaming Regulatory Act ("IGRA"). While the district court found that this model violated the IGRA, the D.C. Circuit Court of Appeals, on appeal, came to the opposite conclusion, finding that this model did not violate the IGRA. And as a result of the Supreme Court’s inaction, the D.C. Circuit's decision on this issue became final.

With the Supreme Court’s decision not to decide the matter, Florida bettors can place online sports bets anywhere within the geographical bounds of the state. This is massive news for the Seminole Tribe, as there is much greater potential capital than the alternative where bettors would have to be physically on tribal lands to place such a bet. By 2030, the prediction is that the monopoly could generate $4.4 billion for the Seminole Tribe.

Daniel Wallach, a Florida sports betting legal expert who filed an amicus brief asking for Supreme Court review, looked toward the future potential for other Native American groups around the country to try to replicate what transpired in Florida for their own benefit. Wallach states, “Tribes in other states stand to benefit from this decision because now they have a clear roadmap that has cleared judicial review.”

This blueprint compact agreement is only one of the reasons for a rise in tribal groups expanding into the sports betting market, according to Kathryn Rand from the University of North Dakota Institute for the Study of Tribal Gaming Law and Policy. Rand indicates that COVID-related casino closures and an increasingly diverse market of competitors in online sports betting have alerted tribal leadership across the country to the lucrative expansion possibility. With tribal lands often in rural areas of states, she finds that models like the Hub-and-Spoke can “ope[n] up a market previously unavailable to tribal casinos” with activity from consumers across the state.

Kansas is a favorite to be the next state to adopt an approach like that seen in Florida. Due to a compact between the state and the Prairie Band Potawatomi Nation, sports betting is legal within Kansas. Nick Covek and Zack Flagel, Associates in the Sports and Entertainment Group at Foley & Lardner LLP, explain that Kansas and other states, such as Wisconsin, Washington, and North Dakota, “may be inclined to amend their tribal compacts and state laws to embrace the Hub-and-Spoke model. Doing so would expand the geographic scope of sports betting from just tribal lands to the entire state geographic boundary.”

Brendan McLaughlin, rising 2L at St. John’s University School of Law. He can be found on LinkedIn at Brendan McLaughlin.

Sources:

https://apnews.com/article/florida-sports-gambling-seminole-tribe-b5d18262d8d25e38fde260fc013a9f33

https://www.forbes.com/betting/legal/is-online-sports-betting-legal-in-florida/#:~:text=Sports%20betting%20is%20legal%20in,betting%20began%20in%20December%202023.

 https://www.sportsbusinessjournal.com/Articles/2024/05/28/oped-28-covek-flagel

https://www.vixio.com/insights/gc-tribal-casinos-find-more-pros-cons-sports-betting