Feds, Seminole Tribe Invoke IGRA ‘Jurisdiction-Shifting’ In Bid To Revive Online Sports Betting in Florida

In their latest court filings, the Seminole Tribe and the United States Department of the Interior have articulated a novel, if not legally dubious argument, for reinstating the Tribe’s new gaming compact with the State of Florida. That compact – which became effective for a brief period of time in 2021 – granted the Tribe the exclusive right to operate online sports betting throughout Florida and decreed that all online wagers would be “deemed” to occur “exclusively” on tribal lands where the computer server processing the bet is located, regardless of the bettor’s physical location.

After a federal district judge rejected that proposed structure as a “fiction” designed to “evade” IGRA’s requirement that all gaming activity “authorized” by a compact take place “on Indian lands,” the Tribe and the Department of the Interior began pushing a new narrative. In appellate briefs recently filed with the D.C. Circuit, both entities are asserting that the compact did not “authorize” online sports betting at all. Rather, they insist that the compact authorized only in-person betting on tribal lands and that the online sports betting component was authorized solely by Florida state law. As described by the Department of the Interior – and similarly asserted by the Tribe – the sports betting provisions of the compact “reflect a permissible hybrid approach, wherein gaming activity that occurs off of the Tribe’s Indian lands is authorized under state law, and gaming activity that occur on Indian lands is authorized by IGRA pursuant to the Compact.”

Doubling down on this creative re-invention of the compact, the Tribe and the Department of the Interior maintain that the compact’s allowance of online sports betting – and its “deeming” of all online wagers placed throughout the State of Florida as occurring “exclusively” on Indian lands – is simply an “allocation of civil jurisdiction” permitted by section 2710(d)(3)(C)(i)-(ii) of IGRA. In their view, the compact’s “deeming” language does not “authorize” online sports betting so much as it transfers regulatory jurisdiction over such wagers from the State to the Tribe.

According to the Department of the Interior’s Opening Brief, “the ‘deemed’ language can be read to describe how the State and the Tribe will treat [online] bets as a matter of state and tribal law for purposes of allocating regulatory jurisdiction.” As the Tribe further elaborates in its amicus brief, “[b]ecause the jurisdiction over the placement of any wager occurring off of Indian lands would normally fall to the State, the compacting parties used IGRA’s jurisdiction allocation provisions to allocate the State’s jurisdiction over that specific aspect of the online sports betting transaction to the Tribe for regulatory purposes . . . so that the Tribe can regulate the [entire online sports betting] transaction from start to finish under the terms of the 2021 Compact. . .”

This is yet another ‘fiction’ advanced by the very same parties who had previously maintained that the compact ‘authorized’ online sports betting – that is, until it was rejected by a federal judge last year. Now, under the guise of an “allocation of jurisdiction” – which is meant to cover civil lawsuits and other adjudicatory actions — the Seminole Tribe and the Department of the Interior are seeking to completely eviscerate IGRA’s strict “Indian lands’ limitation and convert gaming that originates “off of Indian lands” into gaming that occurs “on Indian lands” through pure sophistry.

Allocation of jurisdiction is confined to ‘Indian lands’

A closer look at the IGRA statute reveals the fallacy of their “allocation of jurisdiction” argument. The relevant provision, section 2710(d)(3)(C)(i)-(ii), states that “[a]ny State-Tribal compact negotiated under subparagraph (A) may include provisions relating to . . . (i) the application of criminal and civil laws and regulations of the Indian tribe or the State that are directly related to, and necessary for, the licensing and regulation of such activity; [and] (ii) the allocation of criminal and civil jurisdiction between the State and the Indian Tribe necessary for the enforcement of such laws and regulations.” 25 U.S.C. § 2710(d)(3)(C)(i)-(ii) (emphasis added). Read together, subsections (i) and (ii) allow compacts “negotiated under subparagraph (A)” to shift jurisdiction between States and Indian Tribes for the enforcement of laws and regulations directly related to, and necessary for, the licensing and regulation of “such activity.”

The key words are “subparagraph (A)” and “such activity.” The cross-reference to subparagraph (A) incorporates section 2710(d)(3)(A), which provides the reference point for the meaning of the phrase “such activity” in subparagraph (C). The only “activity” mentioned in subparagraph (A) is “Class III gaming activity” conducted “on Indian lands.” See 25 U.S.C. § 2710(d)(3)(A) (“Any Indian tribe having jurisdiction over the Indian lands upon which a Class III gaming activity is being conducted, or is to be conducted, shall request the State in which such lands are located to enter into negotiations for the purpose of entering into a Tribal-State compact governing the conduct of gaming activities.”).

The next clause – subparagraph (B) – likewise refers to “gaming activities on Indian lands.” 25 U.S.C. § 2710(d)(3)(B) (“Any State and any Indian tribe may enter into a Tribal-State compact governing gaming activities on the Indian lands of the Indian tribe . . . .”). In fact, the terms “gaming activities” and “Indian lands” are mentioned together a total of 13 times in section 2710(d).

Under the last antecedent rule of statutory construction, the word “such,” when used in a statute, must, in order to be intelligible, refer back to some antecedent, i.e., “something previously spoken of, something that has gone before, something that has been specified.” Consequently, the use of the phrase “such activity” in subparagraph (C) necessarily refers to and means the “activity” specified in the preceding two subparagraphs, which is “gaming activity on Indian lands.” But even without considering the last antecedent rule, subparagraph (C)’s express reference to and incorporation of subparagraph’s (A)’s “Indian lands” language yields the same result – that all clauses under subparagraph (C) are tethered to IGRA’s “Indian lands” limitation. But everything in IGRA is anchored to the fundamental proposition that compacted gaming activities must occur on Indian lands. Indeed, as Justice Kagan aptly put it in Michigan v. Bay Mills Indian Community, “[e]verything – literally everything – in IGRA affords tools . . . to regulate gaming on Indian lands, and nowhere else.”

The use of IGRA’s ‘allocation of jurisdiction’ provision to allow compacted gaming outside of ‘Indian lands’ would violate well-settled principles of statutory interpretation

It is a well-established interpretive rule that terms within a statute are to be interpreted in a consistent manner throughout the statute. Consistent with its treatment throughout IGRA, the phrase “such activity” – as used in section 2710(d)(3)(C)(i)-(ii) and clarified by the incorporated subparagraph (A) – refers to gaming activity conducted on Indian lands only. To read section 2710(d)(3)(C)(i)-(ii) as permitting the transfer of regulatory jurisdiction over all gaming activities regardless of geographic location – even those occurring hundreds of miles away from tribal lands – would render the phrase “such activity” in subsection (C)(i) completely meaningless and nullify subparagraph (A)’s reference to “gaming activities on Indian lands.”

This would violate the “the longstanding canon of statutory construction” that “terms in a statute should not be construed so as to render any provision of that statute meaningless or superfluous.” Courts are “to avoid interpreting a statute in such a way as to make part of it meaningless.” As the Supreme Court has instructed, “[s]tatutes must be interpreted, if possible, to give each word some operative effect.” Indeed, “[i]t is a fundamental principle of statutory construction that ‘effect must be given, if possible, to every word, clause and sentence of a statute’ so that no part will be inoperative or superfluous, void or insignificant.”

The case-law interpreting IGRA reinforces this point. In Bay Mills, the Supreme Court observed that “[u]nder well-established principles of statutory construction, statutory language is to be interpreted in such a way as to give it meaning – Congress is presumed not to include meaningless verbiage in a statute,” referring to the “elementary rule of construction that effect must be given, if possible, to every word, clause and sentence of a statute.” Citing this bedrock principle, the Supreme Court declared that “Congress would not have included [any] language in [IGRA] unless Congress intended that the language would have real meaning.”

Likewise, in Navajo Nation v. Dalley, which interpreted a related clause in § 2710(d)(3)(C), the Tenth Circuit stated that “[t]he canon against surplusage indicates that we generally must give effect to all statutory provisions, so that no part will be inoperative or superfluous – each phrase must have distinct meaning.” As the Court noted, this principle was described as follows by the late Justice Scalia and Bryan Garner: “If possible, every word and every provision is to be given effect . . . None should be ignored. None should needlessly be given an interpretation that causes it to duplicate another provision or to have no consequence.”

The Tribe’s and Department of the Interior’s expansive reading of section 2710(d)(3)(C)(i)-(ii) would do violence to this fundamental principle of statutory construction. To read clauses (i) and (ii) as allowing for the transfer of civil regulatory jurisdiction over all online sports wagers initiated from outside of Indian lands would nullify the words “such activity” (from clause (i)) and “gaming activity on Indian lands” (from the incorporated subparagraph (A)), rendering them inoperative. See CSX Transp., Inc. v. Ala. Dep’t of Revenue, 562 U.S. 277, 291 (2011) (“[A] statute should be interpreted so as not to render one part inoperative.”).

Such an expansive reading would also be contrary to the Supreme Court’s guidance in Bay Mills. In Bay Mills, the Court explained that the term “gaming activities” in the section 2710(d)(3)(C) context is to be narrowly construed: it “means just what it sounds like – the stuff involved in playing class III games.” As the Court stated, it refers only to “what goes on in a casino – each roll of the dice and spin of the wheel”— and not to any “off-site” activities.

IGRA’s legislative history likewise refutes the claimed ‘allocation of jurisdiction’

IGRA’s legislative history also confirms that the “allocation of jurisdiction” language in section 2710(d)(3)(C)(ii) extends only to gaming activities taking place on Indian lands. The Senate Select Committee’s 1988 Report accompanying IGRA declares that IGRA installs a “framework for the regulation of gaming activities on Indian lands which provides that in the exercise of its sovereign rights, unless a tribe affirmatively elects to have State laws and State jurisdiction extend to tribal lands, the Congress will not unilaterally impose or allow State jurisdiction on Indian lands for the regulation of Indian gaming activities.” (Sen. Rep. 100-466, 100th Cong., 2d Sess. at 5-6 (1988)). The legislative history further elaborates that the “mechanism for facilitating the unusual relationship in which a tribe might affirmatively seek the extension of State jurisdiction and the application of state laws to activities conducted on Indian land is a tribal-State compact.” (Id. at p. 6).

Continuing to link the “allocation of jurisdiction” language with activities taking place on tribal lands, the Senate Select Committee noted “the strong tribal opposition to any imposition of State jurisdiction over activities on Indian lands” (Id. at p. 13) and clarified that the Committee “does not intend that compacts be used as a subterfuge for imposing State jurisdiction on tribal lands” (id. at p. 14). The Senate Select Committee added that it does not “view the concession to any implicit tribal agreement to the application of State law for Class III gaming as unique and does not consider such agreement to be precedent for any other incursion of State law onto Indian lands.” (Id.).

These multiple references throughout IGRA’s legislative history to the imposition of state jurisdiction over activities conducted on tribal lands are to be sharply contrasted with the absence of so much as a single reference to the inverse situation of an Indian tribe being empowered by a Class III gaming compact to exercise jurisdiction over activities occurring on non-tribal state lands.

IGRA case-law makes clear that ‘jurisdiction-shifting’ is focused on Indian lands only

In its amicus brief, the Seminole Tribe cites just three cases as ostensibly supporting IGRA ‘jurisdiction-shifting’ to gaming outside of Indian lands. But none of those cases involved any off-reservation gaming – or even gaming at all. Instead, they concerned attempts to extend state jurisdiction over activities unrelated to gaming and which arose solely on tribal land – attributes which are the polar opposite of the off-reservation gaming activities that the Tribe and Department of the Interior are attempting to shoehorn into section 2710(d)(3)(C)(i)-(ii).

For example, in Dalley, the Tenth Circuit considered whether a personal injury tort claim arising out of a casino patron’s “slip and fall” on a wet bathroom floor inside a tribal casino could be heard in a New Mexico state court. Similarly, in Pueblo of Santa Ana v. Nash, the issue was whether a state court could hear a personal injury lawsuit arising out of the alleged negligent serving of alcohol inside a tribal casino. The last case cited by the Seminole Tribe – Chicken Ranch Rancheria of Me-Wuk Indians v. California – is even more disconnected from gaming. There, the dispute was over whether the State of California could demand the inclusion of compact provisions relating to family law, environmental regulation, and tort claims that were unrelated to the operation of gaming activities on Indian lands.

As the Ninth Circuit recognized in Chicken Ranch Rancheria, such subjects fell “far outside the bounds of permissible negotiation under IGRA.” The Tenth Circuit’s decision in Dalley also makes clear that IGRA jurisdiction-shifting extends only to gaming activities conducted on Indian lands. “Put another way,” the Court explained, “if individuals are not participating in Class III gaming activities on Indian land – as Bay Mills understands them – . . . we are hard-pressed to see how . . . claims arising from their activities could be ‘directly related to, and necessary for, the licensing and regulation’ of Class III gaming activities.”

The simulcast wagering example is a poor choice

Not surprisingly, the Seminole Tribe and the Department of the Interior were unable to cite even one example – in the more than 30-year history of IGRA – of a gaming compact being used to grant an Indian tribe regulatory jurisdiction over gaming activities occurring on non-tribal state lands. Both entities could only identify one prior instance of a compact allegedly permitting gaming outside of Indian lands. But that case – involving simulcast horse race betting authorized under the compacts at issue in Cabazon Band of Mission Indians v. Wilson, 124 F.3d 1050 (9th Cir. 1997) – provides no support for their position.

In Cabazon Band, while the horse races may have been run on tracks located outside of Indian lands, the bettors themselves were physically located within Indian lands at the tribe’s simulcast wagering facilities when they placed their bets. It is no different than a tribal retail sportsbook patron placing a bet on a Major League Baseball game. In both situations – the actual gaming activity – i.e., the placing of the bet – occurs on tribal lands. It is merely the underlying sporting event – i.e., the baseball game or the horse race– which takes place off tribal lands.

Ironically, the Cabazon Band case undercuts the appellants’ argument. Far from standing for the proposition that Class III gaming compacts can shift regulatory responsibility to Indian tribes over gaming activities occurring outside of Indian lands, Cabazon Band makes the exact opposite point. The compacts at issue in that case granted the State of California civil regulatory jurisdiction over the tribes’ simulcast wagering facilities located on Indian lands. While this key detail was not included in the court’s decision, it was disclosed by the tribes in their appellate brief filed with the Ninth Circuit. (1997 WL 33634217, Brief of Plaintiff-Appellee Tribes, at *37-38 & n.27 (filed on Jan. 2, 1997)). Therefore, the lone supposed example of a compact authorizing off-reservation gaming and granting a tribe regulatory jurisdiction over such gaming does not hold up to even cursory scrutiny.

If this is their best argument on appeal, Floridians may be waiting several more years for the return of legal online sports betting.