ATLANTIC CITY, NJ - In an interview last week at the East Coast Gaming Congress, Hard Rock CEO Jim Allen hinted at the possibility that other commercial operators might eventually enter the Florida sports betting market.
Currently, the Seminole Tribe of Florida holds a near-monopoly on sports betting in the state, thanks to a 2021 gaming compact negotiated with Governor Ron DeSantis.
Florida’s sports betting service was relaunched on November 7 through the Hard Rock Bet app, exclusively for existing customers. However, West Flagler Associates is challenging the Seminole compact, taking their case to the US Supreme Court.
Allen is open to discussions on market expansion
Allen discussed the potential for market expansion with LSR on Thursday at the East Coast Gaming Congress. However, he noted that any revenue-sharing framework is “premature.”
“I don't think we've ever stated that we wouldn't work with other companies, whether it be Caesars, BetMGM, DraftKings, or FanDuel. We’ve always been open to that conversation,” Allen told LSR.
“It would be premature to figure out the mechanics of that until we know where we end up in the legal process. But there is no limitation on discussing skins or other arrangements. It's a step-by-step process.
“In the early days, these companies were spending significant amounts of money to block any potential move in Florida. I'm not saying those days are completely behind us, but there is now a much better relationship from a communication standpoint.”
Revenue allocation structure for totalizators
Following the sports betting relaunch in late 2023, Allen informed the Naples News that Hard Rock was actively collaborating with 16 of Florida's 32 pari-mutuel operators.
According to the 2021 Seminole Compact, these partnerships allow the pari-mutuel operators to receive 60% of the profits they generate through the Hard Rock Bet app, while the Seminole Tribe retains the remaining 40%.
Significance of a sports betting case in Florida
Allen emphasized the importance of having informative discussions with the American Gaming Association about the potential industry ramifications of the case.
The Seminole Tribe offers legal online sports betting through a model where bets are placed via cellphones and computers, with servers located on tribal land.
"Frankly, if we lose this case - and we might, right? We're not arrogant enough to think it's a slam dunk. But the language is virtually identical to that of New Jersey. The servers must be in an Atlantic City casino and geographically placed. We used the exact same language," Allen explained. "So if it's deemed illegal, then the industry has a big problem. However, I'm sure every company would love to be in Florida, and we respect that."
The volume of sports betting in Florida is "good"
After offering Super Bowl and March Madness betting, Allen was asked how Florida has performed relative to Hard Rock's expectations.
"I would say that we're very cautious about the scope. There are two pending Supreme Court cases, one with the United States and one with the state of Florida. So far, those rulings have allowed us to continue moving forward. It’s crucial to respect the judicial process," Allen said.
"As for volumes, they are good. Tom (Reeg) and I have discussed this extensively. Saturating the airwaves with advertising is not beneficial for our industry. We haven't been overly aggressive in marketing. We're candidly taking it one step at a time to see how the legal process unfolds, whatever direction it may take."