Draft contract between state, Seminoles would allow
Vegas-style slots, blackjack in Immokalee
Oct. 15 deadline looms
By Michael Peltier
© 2007 Naples Daily News
Tuesday, October 9, 2007
TALLAHASSEE — With a federal deadline looming, Gov. Charlie Crist is betting that he can reach an agreement with the Seminole Tribe of Florida that will benefit state coffers when the tribe expands its gambling operations.
Last week, state officials released a draft of a 25-year compact between the state and the tribe allowing it to offer “Las Vegas”-style slot machines with higher stakes and opening the door to more games like blackjack and baccarat at seven casinos including the Seminole Casino of Immokalee.
It’s a deal that some say could be an economic catalyst in Immokalee. It’s a deal that others say could be detrimental to pari-mutuel wagering at places such as the Naples-Fort Myers Greyhound Track in Bonita Springs.
Last week, the Interior Department extended until Oct. 15 its deadline to consider giving its permission for the Seminoles to offer Vegas-style slots.
George Lemieux, Crist chief of staff, said the Bureau of Indian Affairs has made it clear that if the state doesn’t make a deal with the tribe, the federal agency will.
“If we don’t’ reach an agreement, and reach an agreement in the short term, (Indian Affairs officials) are going to let the Seminoles provide Class III gaming in the form of slot machines,” Lemieux said. “The state will collect no revenue and have no consumer protection (oversight.)”
The issue has put Crist at odds with some House leaders who oppose any expansion of gambling and contend that it’s up to the Legislature to approve any pact with Indian tribes.
Crist wants to reach an accord that would translate into tax revenue for the state, which would take a cut of the winnings.
The deal between the Seminoles and the state could also have a trickle-down effect on the Naples Fort Myers Greyhound Track.
It could shut out the track of the opportunity to also have slot machines in the near future.
This is what Dan Adkins, chief gaming executive of Mardi Gras Gaming in Hallandale Beach, fears.
He called the current proposal on the table a “bad deal.”
Adkins wants a deal that would allow Vegas-style gambling at all of the state-governed pari-mutuel gambling sites, too.
“Let’s just legalize it,” said Adkins, who successfully spearheaded the efforts to get Class III slots in the Broward race-casinos. “If we are going to make a deal let’s make it across the table where we are all on a level playing field. Let’s do it right the first time and include everyone in this pact.”
Scott Savin, the chief operating officer of Southwest Florida Enterprises, the Miami-based company that manages one of the region’s existing gaming establishments, the Naples-Fort Myers Greyhound Track, wants to make sure the deal protects the pari-mutuel wagering.
“If there isn’t any pronounced details to protect pari-mutuel gaming it could be detrimental to the industry,” Savin said.
Indian gaming laws going back to 1988 generally allow tribes to conduct gambling operations on their sovereign lands. It also allows them to provide games equivalent to those being offered on non-tribal lands.
Broward County voters in 2005 approved Las Vegas slot machines. Tribal leaders have been negotiating with state and federal officials over expanding their own menu of games to include such machines.
Under the draft agreement, the tribe agrees to pay the state an as yet undefined percentage of casino revenue. The Tribe’s attorney, Barry Richard, had previously said that the Seminoles were willing to pay $50 million up front and up to $100 million a year.
This is where Adkins has a problem. Currently, the four casinos in Broward County are taxed at 50 percent. He said the Broward tax bill adds up to $200 million and the Seminoles will be taxed less than 10 percent of their total profits, which is only $15 million per casino.
“The Indians are the ones being greedy here,” Adkins said. “Let’s just bury the hatchet, and that’s not a pun.”
Adkins also worries about all of the outs the deal allows for the Tribe. The Seminoles would stop paying immediately if similar non-Indian casinos spring up outside of Broward and Miami-Dade County, if gambling expands in Broward and Miami-Dade and if their net winnings drop below $1.37 billion, which is now estimated to be the tribe’s annual take.
He also points out that the Tribe casinos would be allowed to have video versions of craps and roulette, which are not allowed at the four Broward casinos.
The Tribe would however have to follow the same state rules for gaming which would only allow them to operate the poker rooms for 12 hours.
Any agreement would have to be approved by the U.S. Department of the Interior, which oversees the Bureau of Indian Affairs.
Crist has argued that if the state doesn’t make a compact, the federal government will and Florida will get nothing from Indian casinos.
The Seminoles in March filed a federal lawsuit in Miami charging that the state is not negotiating in good faith. The Miccosukee Tribe is also participating in the lawsuit.
Adkins says a deal could result in a financial windfall for a small town such as Immokalee, creating longtime jobs and economic development. But he believes the effect could be doubled if the state agrees to expand gambling to all existing betting places.
“You make it a destination that would bring in billions for the state,” Adkins said, “and then everyone’s a winner.”
Staff Writer Tom Hanson contributed to this report.
Know when to hold, when to walk away
An Editorial
© 2007 Miami Herald Media Company
Tuesday, Oct. 09, 2007
Tourists who visit Florida and want to gamble will find that our state offers many opportunities for them to win or lose money. Gamblers can play poker, the Lottery, bingo, dominoes or the slots. They can bet on horses, dogs or jai-alai. They can even take a nonstate-sanctioned, casino-boat cruise for more serious action. What Florida doesn't allow, though, is Las Vegas-style gambling that many heavy gamblers prefer, which is just fine with us. Florida doesn't need to chase the high rollers.
Tourism is our game
This is the position we urge Gov. Charlie Crist to adopt as he negotiates a gambling pact with the Seminole Tribe. Florida doesn't need to match Las Vegas' allure to gamblers in order to continue attracting tourists. Our state has achieved a reputation as a great destination for a broad spectrum of visitors seeking wholesome fun, including vacationers, families, folks attending conventions or taking cruises, and tourists from everywhere. Gambling is in the mix, but it shouldn't be the main draw.
Gov. Crist should say no to the Tribe's push for adding Las Vegas-style, or Class III, gambling. The Seminoles should be given no more than other gaming operators in the state already have. Florida's Indian tribes should be allowed to expand their operations to include Las Vegas-style slots, which, since a 2005 referendum, have been allowed in the parimutuels of Broward County.
Gambling proponents say that Florida long ago lost the bet to keep gaming out of the state, and, in fact, that Florida aids and abets gambling by sanctioning the Lottery, slots, parimutuels wagering, etc. This is all true. However, acceptance of some gambling doesn't mean that the state now should go all-out for full-throttle gaming.
It is true, too, as some gambling proponents say, that Florida is positioned to negotiate a lucrative deal with the Indians, perhaps worth $100 million a year, for an agreement that includes Las Vegas-style Class III gaming. But the state needn't go that far to get a share of the profits. Florida Attorney General Bill McCollum recently issued an opinion saying that the governor can bargain for compensation for permitting Indians to have the kind of slots authorized in the 2005 vote.
Gambling a reality
House Speaker Marco Rubio says he and the House leadership will fight hard to prevent an expansion of any gambling currently not allowed in Florida. We applaud them.
The fast growth of gambling throughout the country in the past two decades is an undeniable reality. Florida has been a part of that growth, and will continue to be a part of it. But Florida need not stake its reputation on gambling. We have far more to offer -- and too much to lose.
Analyst: Taxes hurting `racinos'
By Amy Driscoll
© 2007 Miami Herald Media Company
Wednesday, October 10, 2007
A 60 percent tax bite and growing competition are hampering Broward County's ''racinos,'' racetracks that offer Las Vegas-style slot machines that so far have generated disappointing profits, an industry analyst said Tuesday. ''With a heavy gaming tax and a lot of competition, it's a big hole to dig out from,'' said Bill Lerner, managing director and senior gaming analyst at Deutsche Bank. ``The tracks are hamstrung.''
Lerner made his assessment during an industry-backed conference, the Florida Gaming Summit, held at the Hard Rock Hotel & Casino near Hollywood to analyze the state's changing gambling landscape.
Slots are spinning at three casinos in Broward -- Mardi Gras Race Track and Gaming Center and at Gulfstream Park and Casino, both in Hallandale Beach, and the Isle Casino at Pompano Park Harness Track in Pompano Beach. A fourth casino, at Dania Jai-Alai, is still in the planning stages.
The so-called ''racinos'' pay a 50 percent tax rate to the state. Combined with local taxes, the rate is nearly 60 percent, an amount track owners say is so high it cuts into their ability to reinvest and market their businesses.
HURTS PROFITS
That, in turn, hurts profits and reduces the amount they pay to the state, they say.
State economists now expect $83 million less in taxes from the Broward slots this fiscal year than they had forecast a few months ago.
The conference also sparked discussion about the tribe's negotiations with Gov. Charlie Crist for an agreement that could allow Vegas-style slots as well as table games like baccarat and blackjack.
In exchange, the state would receive a cut of the tribe's profits.
Currently, the tribe pays no state taxes and offers only Class II, or bingo-style, slot machines.
The Broward casino owners worry that a compact giving the tribe exclusive rights to table games would create even greater inequality in the marketplace.
''A lot of the future of gaming in Florida is going to depend on the current negotiations with the compact,'' said Allan B. Solomon, executive vice president and general counsel for the Isle of Capri, which owns the Pompano Beach track.
``We have no problem with the compact so long as the Broward parimutuels were to receive the same product together with a reduced tax rate.''
Miami-Dade parimutuels -- which include Flagler Dog Track and Entertainment Center, Calder Race Course and Miami Jai-Alai -- are also in the mix, because they hope to win a referendum in January that would allow them to offer Las Vegas-style slot machines.
Miami-Dade voters previously rejected the idea in 2005 while Broward voters approved the referendum.
BROWARD A MODEL
This time, Miami-Dade's parimutuels hope they can benefit from Broward's experiences. They hope to ''educate the people about the positives coming out of Broward,'' said Isadore Havenick, vice president of business development for Flagler Dog Track.
But the road ahead may be rocky, several analysts and industry insiders said.
Gaming players wrestle over till
Florida prospects are vast,
but few can agree on how it will play out.
By Steve Huettel
Times Staff Writer
© 2007 St. Petersburg Times
Wednesday, October 10, 2007
HOLLYWOOD, Fla. - It's been a landmark year for the gambling business in Florida.
But darned if Wall Street analysts, industry experts and the race track and casino operators gathered for a conference at the Seminole Hard Rock Casino on Tuesday could reach consensus on where gambling is going in the Sunshine State.
"Gambling could go everywhere," said Robert Jarvis, a professor of gaming law at Nova Southeastern University in Fort Lauderdale, at the program attended by more than 200 industry professionals. Commercial and Indian casinos might cluster in South Florida, he said, or the Seminole Tribe of Florida might end up as the state's only major player.
The future hinges in large part on the ongoing negotiations between the tribe and state officials over a deal to expand gambling at seven Seminole casinos, including the Hard Rock in Tampa. The agreement would bring the first legal table games such as blackjack and baccarat to Florida, making gambling a draw for high-roller tourists, said Dennis Farrell, a senior analyst for Wachovia.
"Table games would have a dramatic impact on the market from a visitation standpoint," he said. "The impact would be substantial, greater than 10 to 15 percent" more in revenue for the tribe. The Seminole casinos now take in more than $1-billion annually.
That prospect has alarmed race track owners in South Florida and the Tampa Bay area, who are calling for state to give them the same deal the tribe receives.
"All we're asking for is a level playing field," said Eric Lemerand, vice president of Gulfstream Park, a Broward County horse track with 1,200 slot machines. "Then we'll compete on our merits."
Gulfstream and two other Broward tracks opened the first state-sanctioned slot machines in the past year, but the results have been disappointing. They expected to collect about $350 daily for each machine, but so far the take has ranged from $71 at Gulfstream to $200 at the Isle Casino and Racing at Pompano Park.
Track officials and financial analysts largely blame the 50 percent tax, plus regulation fees, on slot revenue imposed by the state. That's limited how much the "racinos" can spend on marketing.
"Imagine being a business and losing more than half your revenue before paying your employees," Farrell said.
The Semionle Tribe's Broward County casinos saw revenue fall by 12 percent during one quarter this year, said James Allen, CEO of gaming for the Seminoles. He blames the addition of 5,000 gaming machines between three racinos and tribal casinos but expects revenues will rebound.
"The market needs to absorb those devices," he said.
The Seminoles and representatives of Gov. Charlie Crist have traded several proposed versions of a gambling compact since August. The drafts would let the tribe offer the card games and replace current bingo-based machines with Las Vegas-style slots. The Seminoles would reportedly pay the state about $200-million annually.
"It's our goal to get a compact that, No. 1, benefits the Seminole Tribe and benefits the state," Allen said. He declined to discuss specifics.
The talks are closely watched by the Department of the Interior. A top official last month gave Crist a deadline of Monday to reach a deal or else his agency would allow the tribe to have new gaming - likely upgraded slots.
So far, Interior officials have held off on intervening as long as it appears the two sides are making progress. Steve Huettel can be reached at huettel@sptimes.com" or 813 226-3384.