Re-Upping Gambling Deal Crapshoot With State, Seminoles
By Space Coast Daily // November 26, 2014
exclusive rights dries up in July
TALLAHASSEE, FLORIDA – Re-upping a lucrative gambling deal between the state and the Seminole Tribe will be a crapshoot when lawmakers return to Tallahassee next year.
A portion of the agreement, called a “compact,” signed in 2009 giving the tribe exclusive rights to conduct card games at seven of its facilities, dries up in July unless lawmakers and Gov. Rick Scott renew the deal. Insiders working on a new plan say it’s a heavy lift.
“I do not believe it’s as easy as just deciding whether or not the tribe maintains the banked card games. When the issue goes into play, then all of the various interests are going to promote their goals,” said Senate Majority Leader Bill Galvano, a Bradenton Republican who played a major role in crafting the compact five years ago and is expected to take a lead again this year.
“You will end up having a robust discussion if you address this issue. Given that the issue needs to be addressed by the end of session or by July, that means that discussion’s coming.”
Scott was ready to ink a new compact this spring but ran out of time before the end of the legislative session in early May.
And while the governor may be prepared to extend the Seminoles’ exclusive rights to popular card games like blackjack and even allow them to host craps and roulette, getting the Legislature’s required blessing is problematic.
A sweeping gambling proposal crumbled last year when proponents of allowing at least one mega-casino in South Florida put the bill on ice because they lacked the votes for Senate passage.
The prospect is even grimmer this year. Senate President Andy Gardiner, an anti-gambling legislator who frequently says he would scrap the state Lottery if he could, said recently that he doesn’t care if the table games disappear and the state loses the Seminoles’ cash.
Florida stands to lose about $116 million a year if the portion of the compact giving the Seminoles exclusive rights to table games such as blackjack expires, according to the latest estimate from state economists.
Gardiner, who took over the chamber last week, is an Orlando Republican whose district is in the shadow of casino-hating Disney World and who has strong ties to the Florida Chamber of Commerce, another strident opponent of casino gambling.
“I’m one that says, you know, it may be $50 million or $60 million — that’s big money, don’t get me wrong — but as our economy has come back, I don’t feel the pressure to necessarily renew that compact,” Gardiner told The News Service of Florida earlier this month.
“Obviously, the governor will lead the negotiations, but I think everybody needs to take a step back and not assume that this has to be done. I think we have to take a comprehensive look.”
Any “comprehensive look” runs the risk of being weighed down by a kitchen-sink of elements long sought after by the state’s existing pari-mutuels which, depending on where they are located, have agendas not always aligned with each other, and out-of-state casino operators anxious to establish a footprint in South Florida.
And it’s an even thornier endeavor given that, as one former state gambling regulator put it, industry operators are often more focused on keeping their competitors from getting additional perks than on nailing down more benefits for themselves.
Pari-mutuels in Broward and Miami-Dade counties, already allowed to operate slot machines, want a lower tax rate and table games like blackjack so they can better compete with the nearby Seminole Hard Rock Hotel and Casino. They also want “portability” for pari-mutuel licenses so they can move or expand their facilities.
“It’s so competitive down here with the tribe, it’s really very simple. When we ran the campaign for slots, it was called ‘Floridians for a Level Playing Field.’ We created a level playing field for about a week. We need to be able to compete with the Seminole tribe, at least in South Florida where voters have approved it,” said Dan Adkins, vice president of Hartman & Tyner, which owns Mardi Gras Casino Florida in Hallandale Beach.
Adkins said South Florida “racinos,” horse and dog tracks and jai alai frontons that also have slot machines authorized by voters statewide in 2004, want comparable table games, hours of operation and tax rates that the Seminoles now enjoy.
The racinos pay 35 percent taxes to the state on revenues earned from slot machines. The Seminoles’ payments equate to about 16 percent on their revenues, which exceeded $2.2 billion last year, according to state economists.
“We just want a business plan that’s equal so that we can compete. Right now the tribe just runs us all over. If I give away a motorcycle, they give away a fleet. If I give away $1,000 in bonus play, they give away $10,000 in bonus play. It’s not just me. It’s all of us,” Adkins said.
Dog and horse tracks and jai alai frontons in other areas of the state want slot machines and also the option of ending live races or jai alai games altogether.
Under the five-year agreement with the state, the Seminoles agreed to pay a minimum of $1 billion over five years in exchange for exclusive rights to table games. The deal allows the Seminoles to halt the payments if slot machines exist anywhere outside of Broward and Miami-Dade counties, excluding those operated by other tribes.
The tribe can also reduce its payments if the South Florida pari-mutuels are allowed to have banked card games, or if slots are authorized at any facilities that weren’t already operating in Broward or Miami-Dade, except for Hialeah Race Track, when the deal was signed.
Under the five-year agreement with the state, the Seminoles agreed to pay a minimum of $1 billion over five years in exchange for exclusive rights to table games. The deal allows the Seminoles to halt the payments if slot machines exist anywhere outside of Broward and Miami-Dade counties, excluding those operated by other tribes. The tribe can also reduce its payments if the South Florida pari-mutuels are allowed to have banked card games, or if slots are authorized at any facilities that weren’t already operating in Broward or Miami-Dade, except for Hialeah Race Track, when the deal was signed.
As in the past, the elements of any new deal hinge on the tribe’s exclusive rights to have certain games, even if only in specific geographic areas, and revenue paid to the state. Federal law requires any revenue-sharing agreement with the state to include something of value for the tribe, and the feds have to sign off on any compact struck between Florida and the Seminoles.
“They’re hopeful to renew the table games provision and come up with a program that’s best for the state,” Seminole spokesman Gary Bitner said.
Out-of-state casino operators are banking that this is the year the Legislature will finally sign off on “destination resorts” — combining gambling with hotel, retail and possibly convention space — in South Florida.
“To garner the votes to ratify a new compact will be a balancing act. But I’m confident that whatever passes will have a competitive bid for a destination resort contained therein. I feel very confident about it,” said Nick Iarossi, a lobbyist who represents Las Vegas Sands Corp.
Entities on both sides of the issue have dropped a total of more than $17 million in campaign contributions to candidates and political parties in Florida over the past two years.
Sheldon Adelson, chairman and chief executive officer of the Las Vegas Sands Corp., which includes casinos such as The Venetian on the Las Vegas Strip, contributed $7.6 million to campaigns — including $5.5 million to an effort to kill Amendment 2, a medical marijuana proposal opposed by Gov. Rick Scott, and $1.5 million to the Republican Party of Florida.
Disney World and affiliated entities contributed nearly $5 million. And the Seminoles dropped more than $2 million, including $500,000 to “Let’s Get to Work,” a political committee backing Scott.
In addition to expanding their games to include craps and roulette, the Seminoles are especially eager to protect their Hard Rock casino in Tampa, one of the largest casinos in the world.
And it’s unclear whether the Seminoles will have to actually stop running the card games, according to Barry Richard, a Tallahassee lawyer who represents the tribe.
Federal law allows Indian tribes to conduct the same types of gambling permitted elsewhere in a state. Florida gambling regulators have authorized a type of slot machine now in use that simulates blackjack and uses live “dealers” who deal electronic “cards” to players.
“The only difference between that and a regular table is that instead of handing you an actual card, the dealer pushes a button and a card appears before you on a digital screen. So the argument is that since that’s been approved, therefore the tribe can continue,” Richard said.
If the Legislature fails to renew the compact, the state also runs the risk of being tied up in drawn-out litigation with the Seminoles, who, according to the terms of the current agreement, have 90 days to shut down the card games.
“The tribe really doesn’t want to be in an adversarial situation with the state. The card games have been very successful for the tribe and the state. Nobody’s been upset with them,” Richard said.