Analysis: Even more questions than answers for mobile sports betting in Florida
On Friday we got a little glimpse under the hood of the possible setup for Florida Sports betting.
We saw the state of Florida and the Seminole tribe believe their newly signed contract that would govern FL sports betting could work.
The Florida Legislation has published a question-and-answer document on the contract on its website.
The document, which addresses a number of fundamental issues, such as: Indian Gaming Regulatory Act (IGRA)also goes into greater detail on the FL mobile sports betting aspects of the proposed arrangement.
Does Amendment 3 affect mobile betting?
This is the question posed on page seven of the top 14 pages Document.
Amendment 3 was an electoral measure passed in 2018 to curb the expansion of the Games in the state.
The answer to the question begins with the contract and its by-laws stating that a bet will be made where a server is located and that all servers would be on tribal land.
Support for this argument
In order to support this argument, the document refers to two precedents.
One is New Jersey. The document states that under New Jersey law, a wager should be placed wherever a server is located, which is located in authorized casinos and on racetracks. The document correctly indicates that this is also the case elsewhere.
New Jersey offers commercial sports betting, of course, so the issue of where to place a bet is largely viewed as a matter of state law.
The other example is from Oklahoma. The document cites a case of arbitration between the state of Oklahoma and the Iowa tribe of OklahomaThat document states that the Iowa tribe was able to offer games covered by their contract over the Internet without offending IGRA.
Despite the title of the sub-heading, the answer does not go directly to Amendment 3, but rather focuses on what is probably the bigger problem: whether IGRA allows mobile betting.
The document relates to a 2016 arbitration that was upheld by a federal court. This arbitration took place and was subsequently negotiated in 2016.
What was it about?
The case occurred between the Iowa tribe and Oklahoma after the tribe sent the state a letter stating their intention to play Internet gaming as a covert game under the state’s model compacts.
The state responded by stating that it would like to seek arbitration on the matter.
The question that the referee had to resolve was:
Whether the use of the Internet (World Wide Web) to play a covered game (free and for real money) when the players are outside the boundaries of the state of Oklahoma / USA and its territories during the entire game transaction is authorized under the Covenant.
About a month after the arbitration, the arbitrator has a lawyer from a reputable Oklahoma City Law firm, made its award in favor of the tribe. This was stated by the federal court in the Western District of Oklahoma, Whoever ordered the arbitration will be certified.
The tribe planned to start an online poker site, PokerTribe.com, and secured a license from the Isle of Man Gaming commission, although it is not clear if the site was ever launched.
What did the court case not address?
While it may appear that there is a helpful arbitration award for the state of Florida and the Seminole tribe, the trial itself did not address whether IGRA allowed online wagering.
The trial only effectively checked whether the state of Oklahoma needed to accept the award, which they did. The scope of the IGRA was not within the review area of the district court.
Any implication that the federal court approved or rejected the arbitrator’s decision is not contained in the court opinion. Instead, the opinion explicitly addresses the validity of the arbitration provision within the contract that the court has confirmed.
The United States wants a word
As has been widely documented, the leading case in the matter appears to be the Ninth Circle Court of Appeals in the case of California versus Iipay Nation from Santa Ysabel.
The Iowa Tribe matter precedes the decision, and it appears that the Iipay Nation of Santa Ysabel tried to use the arbitration award in support of their arguments against California and its co-plaintiff, the federal government, which the United States in their Response immediately attacked letter at the district court level.
The tribal defendants’ arguments in relation to “Means of Access Out of Reservation” begin with numerous references to the trial of an Oklahoma District Court case, Iowa Tribe of Oklahoma v State of Oklahoma. In particular, the Tribal Defendants do not rely on an Iowa Tribe court order because the Iowa Tribe District Court only upheld an arbitration award without factual comment or analysis.
Instead, the tribal defendants cite the underlying arbitration award itself as support for the thesis that “the use of the Internet to connect remote gamers to the game servers. . . Indian countries [is] banned neither against IGRA nor by UIGEA. “However, your confidence in the award is misplaced for several reasons (internal quotes omitted).
The problem with arbitration
Arbitration has many advantages over litigation, but some of those advantages can also turn into severe disadvantages depending on which side of a problem you are on.
One of those drawbacks is that it is not a priority. This means that it is not binding on any court or any other arbitral tribunal. It is also often private, which means that the arbitration record can sometimes only be available to the parties (although this is not the case here.)
While the citizens of Florida apparently hope that the Gaming Pact will allow them to use mobile sports betting, the arbitration decision cited in the document related to the location of customers outside of the United States, according to the federal government’s response:
… The Iowa tribe suggested using the internet to play games on servers in their country that only international customers outside of the US who are lawful to gamble on can access.
The United States letter to Iipay Nation refers to the arbitrator’s analysis as “fleeting at best”. The letter concluded its criticism with the following words:
“The arbitrator’s conclusions on IGRA and UIGEA are simply not of analytical value.”
Another way for Florida sports betting?
The question of whether Florida sports betting fans will have mobile betting because of the upcoming pact remains unclear.
On closer inspection, however, the arbitration case to which the legislature is referring in support appears less accurate than is likely to be desirable for the parties involved.
In addition to the challenges of relying on an arbitration award, there is the fact that there is an appeal court decision that deals with similar issues and comes to a very different conclusion that was more recent than the award.
This, along with various federal guidelines on the matter, raises significant concerns about the survival of the mobile component of this agreement without triggering signals at the federal level.