Judge Dabney L. Friedrich of the U.S. District Court in the District of Columbia said that the tribe has not shown that it will be irreparably injured if it is not allowed to keep taking bets as it appeals the decision. Friedrich ruled on Monday that the 30-year gaming compact reached between Gov. Ron DeSantis and the Seminole Tribe last spring violated federal Indian gaming law.
Although the sports betting operation was declared unlawful, the tribe has continued to operate its online betting app throughout the week. It was unclear late Wednesday whether the denial of the request for a stay of the ruling would change that. A spokesperson for the tribe was not immediately available for comment. Bets were still being processed through the app early Thursday morning.
In her Monday ruling, Friedrich concluded that because the compact authorizes online sports betting outside of Indian lands, and because federal law requires that any gambling occur only on tribal land, the compact should never have been approved by U.S. Secretary of the Interior Deb Haaland.
Under the agreement, known as a compact, the tribe agreed to pay the state at least $2.5 billion over the first five years in exchange for having control over sports betting in the state and being allowed to add roulette and craps to its casino operations.
To get around a state law that prohibits any expansion of gambling without voter approval unless it is authorized as tribal gaming, the governor and tribe agreed to give the tribe a monopoly on online sports betting in Florida by having all wagers go through the tribe’s servers. But the court said that provision violated federal Indian gaming law.
On Tuesday, the tribe filed a notice of appeal and a “motion for stay pending appeal,” that would allow it to continue operating its gambling app as the appeals process plays out.
It argued that without a stay the ruling will cause “irreparable harm” to its sovereignty and economic interests. The lawyers said that the tribe would “lose substantial revenue” from online sports betting and that those revenues are “used in part to fund important programs for the tribe.”
In a statement filed with the court, Marcellus W. Osceola, chairman of the tribe, said that the tribe has already made two $37.5 million revenue-sharing payments to the state under the compact, “hired scores of employees,” and spent over $25 million to develop the online sports book.
But in a four-point rebuttal rejecting the request on Wednesday, Friedrich said the tribe had no guarantee of success on the merits of the case and could not show that it was irreparably injured without a stay.
Moreover, she said, granting a stay “would injure the plaintiffs,” which include the owners of Magic City Casino and Bonita Springs Poker Room, who, Friedrich said, “have shown that the compact’s operation causes them an ongoing competitive injury.”
Lawyers for West Flagler Associates, which owns the parimutuels, testified that the first day the tribe’s sports betting app went live, Magic City Casino experienced a 35% decline in revenues.
Friedrich said that “because there are economic losses on both sides of this case, the court is hesitant, while sitting in equity, to transfer those losses to the party that prevailed at law.”
Finally, she said, a stay goes against the public interest because it would perpetuate “unlawful agency action.”
The next step is for the tribe to formally file its appeal with the District of Columbia Circuit Court of Appeals. The court late Wednesday gave the tribe until Dec. 27 to file documents in the case.
Friedrich gave several reasons for rejecting the tribe’s arguments to stay her own ruling.
“Although the tribe invokes an interest in preserving the status quo .... online gaming under the compact began only on November 1, 2021, and the tribe previously represented that it would not begin until November 15,’’ the judge wrote.
She noted that the governor and Legislature included a provision in the compact that allowed for the casino provisions to be severed from sports betting, which the governor conceded this week was “an unsettled legal issue.” By allowing for the potential that sports betting could be disallowed, that “suggests that such disallowance will not be especially disruptive,” Friedrich wrote.
She added that the state, the tribe and the Department of the Interior “can mitigate the effects of this court’s decision by approving a new, lawful compact in short order...
“The court’s decision did not foreclose other avenues for authorizing online sports betting in Florida, including a citizen’s initiative,’’ she concluded. “Those avenues cut against considering the general costs and benefits of online sports betting in this posture.”
Friedrich said the remedy to the invalidated compact was to reinstate the tribe’s prior gaming compact, which took effect in 2010, agree to a new compact with the tribe that doesn’t violate federal law, or Florida voters could authorize sports betting across the state through a citizens’ initiative.