Supreme Court Clears Path for Tribal Online Sports Betting in Florida, Shakes American Gaming Landscape

In a pivotal decision this Monday, the United States Supreme Court refused to hear an appeal that would contest Florida’s authorization for the Seminole Tribe to conduct online sports betting from computer servers based on tribal land. This was not only a game-changer for the Hard Rock International, the gaming division of the Seminole Tribe, but a significant milestone in the American gaming industry.

With the Supreme Court stepping back, the way forward seems clear for Hard Rock to uphold an exclusive digital sports betting franchise in Florida, the nation’s third-largest state, till 2051. The ruling might also pave the road for other states where native Tribes govern gaming but presently do not authorize online sports wagering, including the vivid and vibrant – California.

Echoing this sentiment, Deutsche Bank analyst Carlo Santarelli, in a note to clients on Monday, suggested that the Supreme Court’s decision to refrain from hearing the West Flagler appeal could provide a strategy for California and other states with tribal gaming. However, he also noted that the avenue for traditional online operators might remain uncertain, even in Florida, should the tribes amend the compact successfully.

With the Florida decision now setting the precedent, the California Tribes could potentially renegotiate their gaming agreements with the state, sans the expense of a ballot initiative seeking citizen’s approval. A similar initiative put forth by several large Tribal casino operators was clearly defeated in 2022, suggesting the state’s voters are not soon inclined to revisit the issue.

However, the weight of the Supreme Court’s decision fell heavily on the prospects of online sports betting (OSB) operators – specifically in California. Though the decision didn’t impact sports betting equities with companies such as DraftKings and FanDuel parent Flutter Entertainment rallying, it may reflect an impending challenge for operators in California.

California’s gaming scene is different from that in Florida. The Golden State boasts multiple Tribal gaming entities, many of which are significant, as opposed to Florida, which is majorly dominated by Hard Rock. Therefore, even though California’s abundance of tribal gaming entities may hint at potential partnerships with out-of-state entities like DraftKings and FanDuel, Santarelli believes this perspective overlooks the complexities of tribal politics.

Commercial gaming firms have already stumbled in California, as evident from their endorsement of a 2022 online sports betting ballot initiative bypassing Tribal entities. The initiative was soundly defeated courtesy of the Tribes, who channelized tens of millions to secure this victory.

Santarelli believes that even if California Tribes joined hands with commercial entities, the ensuing financial contracts would heavily favor the Tribes, dimming the prospects for commercial operators. He further noted that it would be naïve to expect gaming Tribes to allow outside entities to seize control of gaming activities without assurance of significant and continuing financial returns.

Rebuffing the West Flagler appeal, the Supreme Court essentially corroborated that Tribes could host online sports betting provided the servers are situated on Tribal land. This legitimizes the strides that gaming Tribes are making specifically in politically active California and reduces the necessity for mediators.

In Florida, the Supreme Court ruling has solidified the Seminole Tribe’s decades-long hold on online sports betting. The domination is all set to extend to iGaming, which might receive legal approval in 2026. According to Santarelli, there is virtually no scope for external operators to yield profits in Florida.

In conclusion, the Supreme Court’s ruling vividly portrays that both California and Florida – the largest and third-largest states respectively, are essentially no-go zones for commercial sports betting entities – a situation they will have to learn to grapple with.