By Dr. Justin L. Davis, Ph.D., M.B.A., Professor of Strategic Management and Entrepreneurship, University of West Florida
A recent case in Florida has involved Rodrigo Duarte filing a lawsuit against Kirk Taboada, seeking repayment of a promissory note that was linked to a gambling debt. The case has gained attention because the promissory note concerned the repayment of gambling debts that were incurred through a sports betting account. However, under Florida law, such a contract would be considered void and unenforceable. Specifically, Florida law prohibits any enforcement of contracts related to gambling debts, even in cases where the gambling occurred in a state where it was legal.
Initially, a lower court granted summary judgment in favor of Duarte, accepting his argument that Taboada’s actions in a previous case (where he sought attorney’s fees) triggered judicial estoppel, thus preventing Taboada from contesting the validity of the promissory note. However, upon appeal, the Third District Court of Appeal in Florida reversed the decision. The appellate court ruled that the promissory note was indeed void under Florida’s gambling-related contract laws, and judicial estoppel did not apply because the issue of the note’s validity had not been conclusively determined in the earlier proceedings. The case was sent back to the lower court for further proceedings, with the appellate court emphasizing that a contract based on gambling debts cannot be enforced in Florida.
The Taboada v. Duarte case is especially interesting given the setting in Florida, where sports gambling is currently legal. There are several important, potential legal implications that could result from the outcome of the case, particularly regarding contract enforceability of gambling-related agreements. As the case currently stands, the ruling has reinforced Florida’s prohibition on enforcing contracts based on gambling debts. Florida law voids any contracts tied to gambling, reinforcing the state’s stance on avoiding legal recognition of gambling obligations.
From a contract standpoint, this sets a clear precedent that contracts involving repayment of gambling debts in Florida will likely be deemed void and unenforceable in Florida courts. From a practical standpoint, this case is very timely in Florida. While the gambling debts that occurred took place prior to the initial case filing in 2018, Florida has seen quite a bit of progress in gambling law and availability since then. In 2021, a compact between the state and the Seminole Tribe allowed for a brief period of online sports betting before being suspended by a federal court. However, in 2023 a federal appellate court reversed that decision, effectively reinstating the compact and enabling sports betting to resume in the state. By the end of the year in 2023, the Seminole Tribe’s Hard Rock Bet app was available statewide and has drawn strong interest from Florida bettors. In fact, estimates indicate that Florida’s legal sports betting market could reach upwards of $10 billion in annual wagers in just its first three years of operations. While the case of Taboada v. Duarte does not appear to have any influence on sports betting legalization or operations directly, it could indirectly support arguments for maintaining stringent regulatory standards and oversight of gambling activities in the state.
