Can Florida Sports Betting Expansion Help Seminoles?

Now that everyone can be sure Florida sports betting isn’t going anywhere, attention has started shifting to another topic: Market expansion.

As it stands, the Seminole Tribe owns a monopoly over sports betting in Florida. Residents of The Sunshine State can place wagers at one of the tribe's Florida sportsbook locations. They can also use the Seminoles’ Florida online sports betting app. This Florida mobile betting site operated in partnership with Hard Rock Bet. And after the Supreme Court of the United States elected not to pursue the lawsuit brought by West Flagler Associates, a gaming operator in the region, the Seminole Tribe sports betting app can be accessed anywhere inside The Sunshine State. And yes, this includes off-site wagers.

Of course, many initially wondered whether West Flagler might continue to pursue action against Florida sports betting. However, they recently struck an agreement with the Seminole Tribe. And by doing so, this collaboration effectively ends any litigation.

Still, the future of Florida sports betting is far from settled. The market, for starters, is barely a year old. The Seminole Tribe launched sports betting in Florida more than three years ago. But they almost immediately had to repeal it. Now, it’s been a little over a year since their relaunch.

Beyond market infancy, though, the Florida gaming compact with the Seminole Tribe is unique. It does not just prohibit other online sportsbooks in the United States from entering the market. The agreement is also decades in length. And that means the Seminole Tribe is positioned to maintain their Florida sports betting monopoly for 40 or 50 years—if not more.

Overall, it is tough to see why the Seminoles would allow commercial sportsbooks to enter Florida. But, according to one company, there might be a real incentive for them to permit expansion.

Here’s How Florida Sports Betting Expansion Could Make Money for the Seminole Tribe

On its face, the idea of Florida sports betting expansion seems like it would cost the Seminole Tribe a good deal of revenue. As of now, they control the entire market share. And because their Florida sports betting site can be accessed from anywhere, this theoretically eliminates the need to broaden their reach.

Yet, analysts from Regulus partners recently predicted the opposite. Here is more from Steve Schult of PlayFL:

“Analysts from Regulus Partners told the Earnings + More newsletter that a strategic partnership with one or two of the larger commercial sportsbooks would increase the total addressable market of Florida sports betting. In other words, Hard Rock would still take the lion’s share of the Florida sports betting market. But the addition of FanDuel and/or DraftKings could make it a larger pie to take from. ‘If Hard Rock can clip the revenue of a competitor at the right amount to grow the regulated market to its own benefit, then this is a shrewd move,’ the Regulus team told Earnings + More.’”

This logic can be tough to understand at first glance. It would be different if the Seminoles could only offer their Hard Rock sports betting app on physical tribal property. But again, it can be accessed off-site, from anywhere in Florida. Even if they are receiving a fee from commercial online sportsbooks, how can they expect to turn larger profits by increasing their own competition?

Well, the key is choosing the right sportsbook. FanDuel and DraftKings, specifically, have resources and reach the Seminole Tribe does not. Their brand awareness alone is off the charts. Select customers may be more likely to sign up with them than at Hard Rock Bet, simply because DraftKings and FanDuel are more recognizable names.

Would Sportsbooks be Interested in Entering an Expensive Partnership with the Seminole Tribe?

By opening the market to commercial sportsbooks, then, the Seminole Tribe would theoretically tap into a client base to which they don’t currently have access. And getting, say, 40 percent of that business is better than 100 percent of nothing.

Framed this way, it paints Florida sports betting as a no-brainer. And perhaps it is—for the Seminole Tribe. The Hard Rock CEO even said Florida sports betting expansion has value for the tribe. But it may be a different story for top online sportsbooks in the USA.

Paying 40 percent of their gross gaming revenue to the Seminole Tribe is a hefty share. It is even steeper if they are required to pay a separate tax—say, 15 percent—to The Sunshine State. Overall, commercial sportsbooks in Florida could take home less than half of what they actually make.

It is not immediately clear whether these companies will consider that a worthwhile endeavor. The size of the Florida sports betting market helps. The Sunshine State will likely rank inside the top three. But online sportsbooks in the U.S. previously considered assessing surcharges to customer transactions in higher-tax locations. While they ultimately backed off that idea, the very notion proves these corporations aren’t yet sure whether high-overhead regions provide enough bang for their buck.

That makes this a topic to monitor in the coming years. If online sportsbooks in New York, as an example, fare well over the next half-decade, it could be proof of concept. The Empire State currently taxes those operators at a 50ish percent clip.

So while Florida sports betting expansion is certainly possible, it does not seem like an imminent endeavor. Rather, it’s something that will like be considered and debated for years before reaching fruition—assuming it ever does.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: