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False Fears Over Florida Sports Betting Constitutionality Created A Bigger Legal Problem: A Federally Defective Gambling Compact


By Daniel Wallach 

May 14, 2021

One of the main selling points of the new Florida gaming compact—which  gives the Seminole Tribe of Florida complete control over all legal  sports betting statewide (including all bets placed on mobile devices  and at licensed pari-mutuel facilities)—is that it would provide a  “safe-harbor” against any constitutional challenge to sports betting  under Florida Amendment 3.  But it is based on a false premise—that the legalization of sports  betting outside of tribal lands would violate Amendment 3’s prohibition  against non-voter approved “casino gambling.” This unfounded fear—stoked in various media outlets by the proponents of Amendment 3—has led the State down a more legally treacherous path: approving a compact that flouts the federal requirement that all “gaming activity” take place solely “on Indian lands.”


By trying to steer clear of the potential constitutional problem (albeit, one which is greatly exaggerated), the State may be creating an even bigger problem with more far-reaching consequences—i.e., the likelihood that a federal court will reject parts of the compact for noncompliance with the Indian Gaming Regulatory Act (”IGRA”),  thereby triggering the compact’s severability clause which will  guarantee a tribal monopoly over all in-person sports betting, while  eliminating ALL mobile wagering originating off of tribal lands and ALL  pari-mutuel participation in sports betting. This isn’t just a  hypothetical—this is the likely outcome given how the compact  is structured and the existing precedent under federal law. If this  scenario doesn’t undermine the overall intent of the compact, then I  don’t know what does. This is the price that the State of Florida—and  the pari-mutuel industry—will pay for state negotiators shortsightedly  trying to avoid one nonexistent risk for a surer catastrophe under IGRA.


As I have written time and again,  Amendment 3 simply does not apply to sports betting. Yet, the messaging  around this new compact is that funneling sports betting through a  tribal-state compact—and thereby stretching the boundaries of federal  law—is a legal necessity because of Amendment 3. I’m here to tell you—for the third time—that Amendment 3 has no applicability to sports betting. Here’s why:


The two-part “casino gambling” test is expressed in the conjunctive


As expressly defined by Amendment 3,  “casino gambling” means “any of the types of the games typically found  in casinos AND that are within the definition of Class III gaming in the  Federal Indian Gaming Regulatory Act, 25 U.S.C. ss. 2701 et seq (“IGRA”), and in 25 C.F.R. s. 502.4,  upon adoption of this amendment, and any that are added to such  definition of Class III gaming in the future.” (emphasis added)


Importantly, this definitional test is expressed conjunctively. A basic rule of construction recognized by Florida courts is that where the conjunctive word “and” is inserted between two conditions in a statutory or constitutional provision, it means that both conditions must be given effect. This principle is referred to as the “conjunctive/disjunctive” canon of construction. 


Thus, the only acceptable way to read the first sentence of the  definition—and the only one which comports with basic principles of  constitutional interpretation—is that the definition of “casino  gambling” has two distinct component parts. First, the game at issue  must be the type of game that is “typically found in casinos” (measured  as of the date of the adoption of Amendment 3, which was November 6,  2018). Second, the game at issue must be within the definition of “Class  III” gaming under IGRA.


Sports betting was not “typically found” in casinos on November 6, 2018


According to data provided by the American Gaming Association,  there were 40 U.S. states that had legal casino gambling (counting both  commercial casinos and tribal casinos) as of November 6, 2018. Of those  40 states, only six (Nevada, Delaware, New Jersey,  Mississippi, West Virginia and New Mexico) had casinos which included  sports betting as an amenity for patrons. Stated another way, in only 15  percent of the eligible states (i.e., those with legal casinos) could  it be said that sports betting was “found” in a casino. In other words,  not “typical.”


To put an even finer point on it, there were more than 500 Native  American casinos in the United States as of November 6, 2018. But only  three tribal casinos – the Avi Resort & Casino in Laughlin, Nevada, Santa Ana Star Casino & Hotel in Santa Pueblo, New Mexico, and the Golden Moon Hotel Resort and Casino, in Choctaw, Mississippi–  or less than one percent of all tribal casinos in the United States –  had sports betting as an amenity on that date. This is not even a close  call.


The key words are “typically found.” The word “typically” means  “commonly”, “generally”, “naturally”,” normally”, “ordinarily”, or  “usually”, according to the Merriam-Webster Online Dictionary. 


Under this plain-language definition, which would likely be  utilized by a Florida court should the scope of Amendment 3 ever be  litigated, it cannot credibly be asserted that sports wagering was the  type of game “typically found” in casinos, when only a small percentage  of U.S. casinos offered it as of November 6, 2018. 


In fact, it wouldn’t even require a trial, it’s that clear-cut.


Substantive differences between sports betting and casino gambling


Beyond the fact that sports betting was not typically found in  casinos on November 6, 2018, it is also a different species of gambling  altogether. There are several fundamental distinctions between sports  betting and casino gambling. First, the “location” of the underlying  contests distinguishes the two activities. In sports wagering, the  athletic competitions or sporting events on which the bets or wagers are  placed usually occur and are decided at locations beyond the casino’s  four walls. By contrast, casino games (such as banked card games, dice  games, and slot machines) are played—and their outcomes are  determined—within the four walls of a casino. 

A second fundamental distinction between casino gambling an

d sports  betting centers on the essential character of the underlying activity.  Casino-style games (such as those included within the definition of “casino gambling” in Amendment 3)  are classified as “games of chance” under most states’ laws (including  Florida law) because the element of chance (or luck) predominates over  skill. Courts have consistently recognized that “casino-style” games  such as blackjack, craps, roulette, baccarat, and slot machines are  games of chance. This proposition is so well-engrained in the law that one California appellate court even took judicial notice of the fact that casino-style games, such as  those offered at Nevada casinos, “consist[] primarily of ‘games of  chance’ insofar as the law is concerned, i.e., games which by definition are contests in which chance predominates over skill.”


By contrast, wagering on sporting events is widely considered to be  a contest of skill. As New York’s Attorney General put it, sports  betting involves “substantial” (not ‘slight’) skill” including  “the exercise of a bettor’s judgment in trying to select the winners or  losers of such contests, and to figure [out] the point spreads.” 


Similarly, West Virginia’s attorney general concluded that “the amount of skill involved in sports betting places this form of gambling outside the parameters of a lottery,”  adding that “those who bet on sports usually take into consideration  past records, who has the home field advantage, and a myriad of other  factors that may influence the outcome of the event.” Furthermore, the  attorney general added, “statistics  and other materials pertinent to sporting events are readily available  for those who wish to study them and then place an informed bet using  reason and judgment.” Drawing upon this data, “[t]he person making the bet is utilizing his knowledge about the sporting activity in order to enhance his chances of winning.” The use of such knowledge, the attorney general declared, “is the employment of skill.”


The “skill vs. chance” dichotomy is reflected in the illustrative examples of “casino gambling” provided in the text of Amendment 3.  All of those examples—including baccarat, blackjack, roulette, craps,  keno, and slot machines—are quintessential games of chance played  entirely within a casino. By contrast, the gambling activities excluded from the definition of “casino gambling” in Amendment 3——“pari-mutuel  wagering on horse racing, dog racing, and jai alai exhibitions”—are  widely recognized as contests of skill. And, just like with sports  betting, the underlying performances associated with pari-mutuel betting  on horse racing, greyhound racing and jai alai exhibitions take  place—and the outcomes are determined—entirely outside of a casino  environment.


Under the principle of statutory interpretation known as ejusdem generis (latin for “of the same kind”), general  expressions such as “including, but not limited to” which precede a  specific list of included items should not be construed in their widest  context, but apply only to things of the same general kind or class as  those specifically mentioned in the list of examples. 


Applying this interpretive canon, the omitted activity of sports  betting is clearly of a “different kind or class” than the  casino-focused games of pure chance enumerated within the Amendment 3  definition of “casino gambling.” To be sure, sports betting has much  more in common with the other “skill-based” wagering activities—such as  pari-mutuel betting on horse racing, dog racing, and jai alai—that occur  outside of a casino environment and are expressly excluded from the definition of “casino gambling” in Amendment 3.


Federal law also treats sports betting and casino gambling as separate and distinct categories of gambling


Federal law also differentiates sports betting from casino gambling. For example, the federal regulations governing gambling on Indian lands—which are part of the Indian Gaming  Regulatory Act (“IGRA”)—treat sports betting as a separate and distinct  form of “Class III” gaming, mentioning it in a different subparagraph  than house-banked card games, casino games (such as roulette, craps, and  keno) and slot machines. In addition, the federal Wire Act,  which generally prohibits bets or wagers from being placed across state  lines, applies only to bets or wagers placed on sporting events, and  does not reach other forms of gambling, such as casino gambling. To  similar effect, the federal excise tax on wagering applies to wagers placed on sporting events, but casino-style games  (including slot machines, banked card games, dice games, and roulette)  are specifically exempted from the application of the tax.


Gambling studies commissioned by the federal government likewise  distinguish between sports betting and casino gambling. For example, the  1999 Final Report of the National Gambling Impact Study Commission,  which was established by Congress to “conduct a comprehensive legal and  factual study of the social and economic implications of gambling in  the United States,” characterized the gambling industry as being  “composed of relatively discrete segments,” specifying “Casinos (commercial and tribal)” and “sports wagering” as separate and distinct categories of gambling. 


A similar proposal introduced in 2016 expressly included sports betting


Amendment 3’s failure to expressly include sports betting within  the definition of “casino gambling” is to be sharply contrasted with a  similar proposal introduced at roughly the same time that was designed  to give voters control over gambling.


In March 2016, former Florida Representative Jose Diaz (D.  Miami)—who was then the Chair of the House Regulatory Affairs  Committee—introduced House Joint Resolution 7113 (also  referred to as PCB RAB 16-03), which proposed an amendment to the  Florida Constitution to require that “any expansion of gambling” be  authorized only by a constitutional amendment proposed by a citizen’s  initiative petition and then approved by Florida voters.


It was strikingly similar to Amendment 3—except in two critical respects.


HJR 7113 was broader than Amendment 3, which only addresses casino gambling.


Under HJR 7113, a citizen’s initiative petition would be required for any expansion of “gambling,” not just those that could be categorized as “casino gambling.”

It broadly defined “gambling” as all Class III gaming. 


And, here is the money shot. In contrast to Amendment 3—which does not mention “sports betting”—HJR 7113 specifically  delineated “sports betting” as among the Class III games for which a  constitutional amendment would be required. It stated that  term “Gambling” means “any of the types of games that are within the  definition of class III gaming . . ., including, but not limited to, . .  . sports betting.”


HJR 7113 is far from an outlier. In Arkansas, for example, voters approved a constitutional amendment in 2018 to allow “casino gaming” at four casinos.


Under the Arkansas ballot measure, the definition of “casino gaming” specifically included “accepting wagers on sporting events.”


It wouldn’t have been terribly complicated for the proponents of  Amendment 3 to have included sports betting within the definition of  “casino gambling” (similar to both of the above measures), particularly  when they already went to the trouble of referring to every other species of Class III gaming in the proposed ballot measure.


That should pretty much end the debate over whether Amendment 3  (now Article X, Section 30 of the Florida Constitution) prohibits the  legislative authorization of sports betting. 


If the proponents of Amendment 3 had intended to include sports  betting within the ambit of the constitutional amendment, they could  have gone to the trouble of mentioning it somewhere in the text—just as they as they did with every other form of Class III gaming. 


Their failure to do so—particularly given the exacting level of  specificity and precision which they accorded to every other form of  Class III gaming—speaks volumes here.


This article was originally published in Forbes.com on May 14, 2021. 

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