Miami business leaders Codina, Braman sue to stop Seminole Tribe gambling expansion

A second federal lawsuit aimed at stopping sports betting in Florida was filed Monday in the District of Columbia, this time with the backing of two of Miami’s most outspoken critics of gambling, developer Armando Codina and auto retailer Norman Braman.

The lawsuit against U.S. Secretary of the Interior Deb Haaland alleges that the federal government “improperly allowed the State of Florida to circumvent” the state Constitution when it approved the gaming compact between the state and the Seminole Tribe of Florida and illegally authorized off-reservation sports betting in violation of federal law.

In addition, the lawsuit states that Gov. Ron DeSantis and the Florida Legislature violated federal Indian gaming law and the federal Wire Act “by authorizing gambling outside of Indian lands and by allowing the use of the Internet or interstate payment transmissions where sports betting is illegal.”

Finally, the lawsuit asks the court to block the compact, claiming that it violates the federal Indian Gaming Regulatory Act because by allowing the tribe to enter into partnerships with parimutuels to handle their sports books, it unlawfully “sought to ‘enrich non-tribal’ interests rather than ‘protect the sovereign rights and interests of Native American Tribes and Peoples.’ ”

Under the deal signed by DeSantis and approved by the Florida Legislature, anyone in Florida over age 21 can start placing and collecting online wagers on sporting events “via the internet [or] web application” from anywhere in Florida beginning on Oct. 15. In exchange, the tribe has agreed to guarantee payments to the state of at least $2.5 billion in revenue sharing over the first five years of the 30-year agreement.

The compact allows sports bets at six of the tribe’s reservations, but also permits Florida’s existing racetracks and jai-alai frontons to develop their own mobile apps and to conduct off-reservation sports bets if they are chosen by the tribe as its partners. The parimutuels are allowed to take 60% of the proceeds from each bet with the tribe receiving the remaining 40%.

Unless the courts block the deal, the Seminole Tribe’s Hard Rock casinos in Broward and Hillsborough counties will also be allowed to become full Las Vegas-style casinos with the addition of roulette and craps.

Especially alarming for Codina and Braman is a provision in the compact in which the Seminole Tribe waives its right to object to any new casino license outside an 18-mile boundary of its Hard Rock Casino near Hollywood.

Both the Fontainebleau hotel and resort in Miami Beach and Trump’s National Doral Miami golf resort have indicated they would like to see a new law that allows them to transfer a gambling license from an existing parimutuel to their properties.

The compact “clearly telegraphs their intent for casinos in Miami Beach and Doral by getting the Seminoles to waive their right to object beyond the 18-mile boundary stated on the bill,’’ Codina said in a statement on Monday. “It doesn’t take a rocket scientist to see how this movie is ending. We don’t want to wait to see the white of their eyes, so this is our first step.”

Tribe spokesman Gary Bitner indicated that the Tribe has no intention of slowing progress on gambling expansion.

“The Seminole Tribe and Seminole Gaming continue to move forward with hiring and training hundreds of new team members for the authorized launch of sports betting, craps and roulette – games now legal in Florida,’’ the Tribe said in a statement late Monday. “The new Gaming Compact was negotiated by the Seminole Tribe and the Governor of Florida, as spelled out in the Indian Gaming Regulatory Act. The Florida Legislature voted overwhelmingly in favor of the new Gaming Compact, which was then approved by the U.S. Department of the Interior. It has the support of two-thirds of Floridians. It is law.”

Bypassing state law at issue

Although the Florida Constitution requires that any expansion of gambling be approved by voters in a statewide referendum, the compact gets around that requirement by allowing sports betting to be controlled by the Seminole Tribe with all bets going through a server on tribal property.

Federal law prohibits any expansion of Class III gambling unless it is authorized in state law, and for expanded gambling to be legal in Florida, it must be approved in a statewide referendum. But legislators and the governor justified the 30-year deal with the Seminole Tribe without a statewide vote by creating a so-called “hub and spoke” model that had all sports bets passing through internet servers on tribal land.

The lawsuit follows two other challenges filed by West Flagler Associates, the owners of Magic City Casino in Miami and Bonita Springs Poker Room, which are also asking federal courts to block implementation of online sports betting.

On Monday, West Flagler filed a motion for summary judgment in federal court in the Northern District of Florida, asking the court to block the tribe’s launch of its online sports betting operation, expected on Nov. 15.

Like the Codina and Braman lawsuit, West Flagler alleges that online sports betting violates the federal Indian Gaming Regulatory Act and the Wire Act and the Unlawful Internet Gambling Enforcement Act.

“We are making the same arguments, but we have a different agenda,’’ said Eugene Stearns, lawyer for Codina and Braman.

The state responded on Monday saying West Flagler waited too long to file its lawsuit, and the motion should therefore be dismissed.

Claiming harm to their businesses

Braman, a billionaire who lives in Indian Creek, and Codina, a multi-millionaire real estate developer who developed Downtown Doral, are both Republicans who have left their mark on gambling opposition for years in South Florida as lawmakers have considered allowing resort casinos into Miami and Miami Beach.

They opposed the Genting Group’s plan to use the Miami Herald’s former Biscayne Bay property to build a resort casino and hotel and, most recently, have openly resisted proposals being considered by DeSantis and legislative leaders to preempt local governments that oppose casino expansion in South Florida.

Also joining the lawsuit is Monterra MF, LLC, a Cooper City senior living center known as The Residences at Monterra Commons, owned by Codina’s development company; James Carr, a longtime partner with Codina; and No Casinos, a Florida 501(c)(4) organization that pursued Amendment 3, approved by voters in 2020, which required voter approval of gambling expansion.

The complaint alleges that the Monterra development, which is 2.5 miles from the Seminoles’ Hard Rock Casino near Hollywood, would be adversely impacted by the arrival of expanded casino games as would Braman’s many properties in the Edgewater neighborhood of the City of Miami, near the Magic City Casino that also would seek to engage in sports betting activities.

Their properties “will be adversely affected by, among other things, increasing neighborhood traffic, increasing neighborhood congestion, increasing criminal activity, reducing open spaces, and reducing property values. Plaintiffs have also lost the opportunity to oppose such expansion of gambling through the constitutionally required citizens’ amendment process,’’ the lawsuit states.

No Casinos effort

Codina and Braman both helped finance the No Casinos effort to require voters to approve any gambling expansion in Florida, and they recently worked with Miami Beach Mayor Dan Gelber in his opposition to talk by Republican leaders in Tallahassee of allowing casino owners to transfer gambling licenses to venues in locales that have banned gaming and preempting local restrictions.

The cities of Miami Beach and Doral have passed city ordinances prohibiting casino gambling unless voters approve.

Miami Beach officials are primarily concerned by the Fontainebleau, the hotel and resort owned by Jeff Soffer, who has sought for years to establish gaming rights. Codina and Braman are also concerned about reports that the Trump Organization is lobbying aggressively for legislation in Tallahassee to allow for a casino license to be transferred to the Trump National Doral Miami golf resort.

Codina said the Florida Legislature’s decision to preempt voter approval on other issues, such as the vote by Key West citizens to limit large cruise ships in their port, is an ominous development.

“If they attempt to also preempt the will of the cities and local voters, any legislator that votes for preemption, should be run out of office,’’ he said.

Braman said Amendment 3 to the state Constitution passed overwhelmingly by Florida voters and “gives to the citizens of our state the decision to expand gambling, not the politicians.”

“Unfortunately, this right was taken away by the legislation passed early this year in Tallahassee,’’ he said.

The lawsuit argues that although the compact attempts to set up so-called “geo-fencing to prevent wagers by players not physically located in the state,’’ there is so much readily-downloadable software and apps available that people with a mobile phone can easily bypass the geo-restricted sites “by faking a specific geographic location,’’ while people living close to the Florida border in Georgia and Alabama where sports betting is illegal, may have IP addresses listed in Florida.

The lawsuits have come as no surprise to the Tribe or legislators.

Knowing that the compact would likely face legal challenges, the governor and Tribe included a severability clause that provides that in the event a court invalidates one provision of the agreement, the remaining provisions shall remain in force. The Tribe would then reduce its revenue sharing payments commensurately.

Under the deal signed by the governor and approved by the Legislature, anyone in Florida over age 21 can start placing and collecting online wagers on sporting events beginning on Oct. 15. However, the Tribe has told West Flagler it will not implement online sports betting at any of its sites until Nov. 15, 2021.

The federal court has scheduled a Nov. 5 hearing date to hear oral arguments on the West Flagler motion for summary judgment with the goal of blocking the launch of online sports betting in Florida.

Mary Ellen Klas can be reached at meklas@miamiherald.com and @MaryEllenKlas