Seminole Tribe Warns Florida Legislators That DFS Bill May Violate Compact

Posted on: December 9, 2017, 11:00h. 

Last updated on: December 9, 2017, 11:33h.

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Expertise: Commercial Gaming.

The Seminole Tribe of Florida has sent a letter to members of the Florida legislature, warning them that a bill to legalize daily fantasy sports (DFS) without regulation would violate the compact between the tribe and the state.

The Seminoles operate several casinos throughout Florida, and do so under a compact that gives the tribe the exclusive right to offer several casino games in the state.

That agreement requires the tribe to pay the state hundreds of millions of dollars each year, something the Seminoles say could stop if the bill becomes law.

At question are a pair of bills that would expressly make fantasy sports in general legal, while exempting such games from gambling regulations.

One of those bills has been introduced by Representative Jason Brodeur (R-Sanford), while a similar piece of Senate legislation comes from Senator Dana Young (R-Tampa).

Letter Serves as Warning of Potential Issues

The letter, signed by Seminole Tribe General Counsel Jim Shore, served more as a warning of unintended consequences than an immediate threat. Shore outlined some of the tribe’s concerns, including potential exclusivity issues.

“By providing this notice, the Tribe hopes to avoid a situation where the State enacts legislation that inadvertently violates the Tribe’s exclusivity,” the letter reads. “Federal law requires that any reduction in the Tribe’s exclusivity must be balanced by some additional consideration from the State. Without such an agreement, the 2010 Gaming Compact would allow the Tribe to cease all revenue sharing payments to the State based on the expanded gaming contemplated by these bills.”

The tribe also expressed concern about the broad nature of the legislation being proposed, saying it lacked focus.

“The Tribe also is concerned about the substance of the bills and the lack of any form of regulation for an entire class of gaming activity,” Shore wrote. “While it is premature to list all of the issues now, the Tribe believes that the scope of permitted games and the appropriate regulatory structure are issues that should be addressed in detail before this legislation moves forward.”

Young Says Tribe’s Criticism is Off-Base

When told of the concerns over her bill, Senator Young said she was surprised, given that the issue is not a new one.

“This issue has been around since 2015 and this is the first time the Tribe has raised the Compact as it relates to fantasy sports,” she said.

Young added that fantasy sports, including daily contests, are not gambling but rather contests of skill. To back up her position, she referred to a legal opinion issued in February on behalf of DraftKings by former Florida Supreme Court Justice Ken Bell.

In that opinion, Bell argued that a bill allowing DFS and other fantasy sports contests shouldn’t impact the state’s agreements with the Seminole Tribe.

“Fantasy sports competitions, such as those sponsored by DraftKings, should not be classified as internet gambling [as] they do not constitute an online bet or gamble,” Bell wrote.

Fantasy sports have lived in an unusual space in Florida law since 1991, when the state’s attorney general issued an opinion saying that fantasy football leagues were a form of illegal gambling.

While that did little to stop friendly leagues from flourishing, it has complicated the DFS landscape: while DrakftKings and FanDuel accept players from Florida, Yahoo does not.