Court may decide if all bets are off in Seminole deal
By Mary Ellen Klas
© 2007 Miami Herald
Thursday, November. 15, 2007
The gambling compact Gov. Charlie Crist signed with the Seminole Tribe on Wednesday is historic. Whether it means blackjack is coming to the tribe's casinos anytime soon is another matter. As soon as the governor and tribal chief Mitchell Cypress triumphantly announced the deal, threats of lawsuits and predictions of doom flew.
Some state lawmakers say the pact violates their right to control the expansion of gambling in Florida. Gambling industry officials say the deal would be a fatal blow to a struggling parimutuel industry that recently added slot machines in Broward County and could soon do the same in Miami-Dade.
Both said their next move may be to a courthouse. House Speaker Marco Rubio, the loudest opponent of the compact, said he has asked a constitutional law expert to ``examine legal options.''
Dan Adkins, president of Mardi Gras Gaming in Hollywood, said he's considering suing because Crist has ''effectively sold out the state.'' He said the deal gives the tribe an unfair advantage, hurts the 26 parimutuel facilities by limiting their potential growth and will lead to a reduction in the taxes they pay the state.
''The good news is, I don't believe it will ever take effect,'' Adkins said.
Under the deal Crist signed with Cypress, the state agrees to allow the tribe to operate Vegas-style slot machines and card games such as blackjack and baccarat at its seven casinos. In return, the tribe will pay the state at least $100 million a year for 25 years, and as much as $1 billion over the first five years.
''This is a very historic day for the state of Florida and the Seminole Nation,'' Crist said. ``Since Florida became a state in 1845, the people of Florida and the people of the Seminole Nation have had a wonderful relationship. They have lived together, sometimes peacefully, sometimes not so peacefully.''
''We have negotiated the terms which we believe will benefit both the tribe, the Seminole tribe and most importantly the people of the state of Florida,'' he said.
Cypress thanked the governor and commended his willingness to negotiate the pact over five months.
FIRST TO LISTEN
''You are the first governor ever who listened to what we wanted to do, and we wanted to [give] a share of our income'' to the state, Cypress said. ``This is a good day for everybody.''
Because the tribe is a sovereign nation, Florida cannot regulate or tax it unless the tribe enters into an agreement like the compact. Under the deal, the tribe has agreed to limit smoking at its seven gambling facilities, including the Seminole Hard Rock Hotel & Casino near Hollywood. It will increase the gambling age from 18 to 21 and will phase out its Class II slot machines, known as video lottery terminals, to operate more lucrative Class III slot machines.
In return, the tribe will be given the exclusive right to operate slot machines outside Miami-Dade and Broward counties, and it will have the only blackjack, baccarat and other card games allowed anywhere in Florida. And if the Legislature were to allow parimutuels outside Miami-Dade and Broward to offer those games, the tribe would stop making payments to the state.
''They get something significant, and the state of Florida gets something in return,'' said George LeMieux, the governor's chief of staff and key negotiator.
The U.S. Department of Interior, which regulates Indian gaming activities, has to bless the deal within 45 days, but the approval appears almost certain. Interior Secretary Dirk Kempthorne said in a statement he's ``pleased that the governor and the chairman were able to negotiate a compact that will serve the interests of both the state and the tribe.''
The Interior Department helped seal the deal by imposing a Nov. 15 deadline and threatening to allow the Seminoles to run Class III slots without requiring them to pay the state if the state blew the deadline.
Under federal law, the tribes are entitled to Vegas-style slots because voters in Broward approved them for the county's parimutuels. But gambling opponents pointed to recent court rulings that raise doubts about whether the Department of Interior could let the tribe have slot machines or impose the deadline.
Florida Attorney General Bill McCollum said Wednesday he believes the federal government doesn't have the authority to force a deadline.
Crist, who said he disagreed with McCollum, said he went along with the deadline because he trusted the federal government.
But he has decided he doesn't trust the Legislature: Despite telling legislative leaders over the summer he would ask them to sign off on the compact, he reneged on the promise Wednesday.
''We do not believe [the deal] will require legislative approval,'' LeMieux said. He said the pact intentionally has no provisions infringing on the Legislature's authority, such as directing where the money should be spent or which agency should handle the regulations.
The deal recommends that 95 percent of the money be spent on education and 5 percent go to local governments in cities neighboring the tribe's casinos, but it leaves it up to the Legislature to decide.
To Senate Democratic Leader Steve Geller of Cooper City, it was an unfortunate change of heart.
''I am urging the [Senate] president to file a lawsuit against the governor over this very bad compact, and I am quite confident that the Legislature will win,'' he said. Senate President Ken Pruitt had no comment.
Sen. Dennis Jones, a Republican who heads the Senate committee that oversees gambling, said his committee will study the pact next month but he is concerned. ``I want to make sure we don't sell the state short and make an unlevel playing field.''
MOMENTOUS
Barry Horenbein, the tribe's longtime lobbyist, doesn't expect the deal will go down easily. Moments before the governor and the tribal chief signed the deal, he said he asked himself: ``I wonder how many lawsuits are coming.''
Still, it was a momentous day, he said.
''When I took them [as clients] over 28 years ago, the only income they had was selling trinkets and wrestling alligators,'' he said.
``I said I'll never see a governor sign a compact as long as I live. My son called me today and asked me if I was dying. I hope not.''
Legalized gaming and legal games -- how much expansion?
By Mark Lane
Daytona Beach News-Journal
© 2007 News-Journal
Friday, November 16, 2007
I've been an opponent of casino gambling in Florida from the time anybody first paid me to write opinion. So you might expect I'd be working myself into a churning urn of burning outrage over the state's gambling pact with the Seminole Tribe of Florida signed Wednesday.
And, you'd be wrong.
No, no. I still don't buy the argument that we need casinos to keep Florida tourism competitive. And don't insult my intelligence by telling me it means free, new money for schools. And please, I still hold back a bitter chuckle when I hear people claim casinos will relieve them of all their tax woes.
Nor do I believe those phony "multiplier effects" that the hired economists and corporate spokesmen for gambling interests claim for area economies. Don't even get me started about the kind of low-wage, tip-jar service jobs they create.
Instead, I'm grudgingly OK with this because (1) it's probably the best deal the state could get given its terrible negotiation position. And (2) it could make statewide, opening-in-a-theater-near-you casino gambling difficult. Instead, the new slot rooms would be quarantined on Seminole land in South Florida. (And one site in Tampa.)
Let's start with the boring part of this, which is Reason One. (The time-pressed may wish to jump ahead.)
The state of Florida doesn't have the option of refusing to negotiate with the Seminoles. The state is at the table because the federal government says it has to be. The U.S. Department of Interior made a credible threat to authorize so-called "Class III slot machines," with no cut at all for Florida, if the state did not reach an agreement by Thursday.
Florida could fight this in court but the chances of winning are uncertain at best. Attorney General Bill McCollum says it might work. Gov. Charlie Crist, who was himself attorney general before becoming governor, thinks otherwise. The legal issues are complex -- and they are still separate from the separation-of-powers issues the Legislature could raise in court.
If you believe the federal government knew what it was doing -- an always arguable assumption -- then the only real question for negotiation was how much money would be exchanged for what range of games. There was not much room for the state to maneuver.
(The more time-pressed reader might want to start reading again here.)
The more interesting question, however, is what this means for gambling expansion.
One of the few hard rules of Florida politics is that whenever there's a state budget shortfall, more gambling is proposed.
There was a $1 billion budget shortfall this year and a $1.4 billion shortfall projected for next year. This is the signal for video lottery proposals and casino gambling at pari-mutuels plans to be dusted off and filed anew.
The pact just signed, however, says the state stops getting any casino money from the tribe if it allows additional casino gambling or starts a video lottery. That's not to say the state won't ever be tempted to try, betting it might make more money in the end. But it sure would be a powerful disincentive.
Far from creating a slippery slope for more and wider gambling, this might wall it off in one part of the state. And leave my part of the state alone.
No, that's not a victory for those who'd like to hold the line on gambling, but it's less of a defeat and leaves us with defendable borders.
State's gaming deal a winner, experts say
The Seminole pact may deliver over time.
By Steve Huettel
Times Staff Writer
© 2007 St. Petersburg Times
Friday, November 16, 2007
Is the state's deal to expand gambling at casinos owned by the Seminole Tribe of Florida a jackpot or bust for taxpayers?
The initial payoff looks like a pittance compared with revenues in big Indian gaming states like California and Connecticut. Florida parimutuels scoff that the $100-million minimum the first year won't even offset the state's tax losses as tribal casinos cut into their business.
But Indian gaming experts say that considering their weak bargaining position, state officials cut a fair deal this week that should pay off if the tribe aggressively expands its casinos to leverage new slot machines and card games like blackjack.
The 25-year deal puts Florida "in the same league as the biggest states," said Steven Light, co-founder of the Institute for the Study of Indian Gaming Law and Policy at the University of North Dakota. "You can't just look at the immediate future. It's a very lucrative deal for the state in the next few years."
Florida would get at least $100-million for the first year, half of which would come when the Interior Department approves the agreement, called a "compact." The state would receive minimum payments of $125-million in year two and $150-million the following year.
Last year, Connecticut received $430-million as its cut of $2.5-billion in revenue from the Foxwoods and Mohegan Sun casinos. Under a 1994 compact, they pay the state 25 percent of slot revenues for exclusive rights to run a full range of casino games.
With nearly 60 tribal casinos that collected $7.7-billion in revenue in 2006, California is far and away the largest Indian gaming state. With new compacts that require tribes to pay 10 percent to 25 percent of revenue, the state expects to collect more than $400-million next year.
Florida's compact has the same percentage range after the second year. The Seminoles would pay 10 percent of "net win" -- money wagered less payouts -- on the first $2-billion annually. Revenue above that would be taxed on a sliding scale that reaches 25 percent of revenue over $4.5-billion a year.
That could take a long time, even with the new slots and card games. The tribe now generates $1.2-billion a year at its seven casinos, including the Seminole Hard Rock Hotel & Casino in Tampa, mostly from bingo-based gambling machines.
Florida officials were negotiating from a weak position, said Indian gaming expert Alan Meister of Analysis Group, financial consultants in Los Angeles.
The Interior Department was threatening to unilaterally give the Seminoles Las Vegas-style slots -- and cut Florida out of any money -- if officials didn't sign a compact by Thursday. And the tribe had a thriving gambling business without Florida's help. "I don't think the state had a lot to work with," said Meister.
Still, the state stands to make $1-billion over the first five years and as much as $500-million annually over the remainder of the 25-year compact, said George LeMieux, chief of staff for Gov. Charlie Crist. "We got ourselves a very competitive deal," he said.
Q&A: State currently limits cards, Vegas-style slots
By Steve Huettel
Times Staff Writer
© 2007 St. Petersburg Times
Thursday, November 15, 2007
What kinds of casino games are legal now in Florida?
Poker is allowed at parimutuels (horse and dog tracks and jai alai frontons). Three Broward County racetracks got Las Vegas-style (Class III) slot machines after county voters approved a local option referendum in 2005.
The Seminole and Miccosukee Indians have bingo-based Class II machines and poker.
Florida-based gambling boats offer table games such as blackjack and roulette outside state waters, but they are illegal in the state.
What's the difference between Class II and Class III machines?
Class II machines look like a regular slot but actually show the results of a bingo game between gamblers located near each other, with the casino taking a cut of the pot. Players bet against the casino on Class III machines. Experts say this generates more revenue than bingo machines and therefore more expensive payouts.
Would the compact announced Wednesday lead to expanded gambling outside Indian casinos?
Not likely. Parimutuel owners argue that the deal, particularly the addition of new card games, will give the Seminoles an unfair competitive advantage. Some state lawmakers are talking about legislation to give them new games, like video lottery terminals. But House leaders oppose expanded gambling, and the Seminoles could cut off payments to the state if the devices are sanctioned.
How big a cut will Florida get from the new games?
At least $100-million the first year, $125-million in the second year and $150-million in the third year. But the state's take could be about $230-million in the third year and $400-million in the fourth year, says James Allen, chief executive of the tribe's gaming operations.
When will the new games be available to play?
Too soon to say, according to Seminole officials. But it's unlikely it would happen before 2008. The Department of the Interior has 45 days to ratify the compact.
What could prevent that from happening?
Various groups, including the state Legislature and the attorney general, have threatened legal action. The Legislature maintains it has the right to approve the compact. It's unclear whether those suits, if filed, could delay approval by the federal government.
Fla. Tracks Fret About Indian Compact
By David Royse
Associated Press Writer
© 2007 The Associated Press
Thursday, November 15, 2007
Houston Texas Chronicle
TALLAHASSEE, Fla. — The odds may be getting longer for dog and horse tracks in Florida.
An industry already hit heavily in recent decades by competition for the entertainment dollar is worried that a compact signed this week that gives the Seminole Indian tribe the nearly exclusive right to expanded gambling in much of Florida could hasten the demise of other forms of betting.
"I think it will probably put the nail in the coffin on this thing," said Richard B. Winning, one of the owners of the Derby Lane track in St. Petersburg and president of the American Greyhound Track Operators Association. "They never once came to the pari-mutuels and spoke to us."
The Seminoles and Gov. Charlie Crist signed an agreement Wednesday that allows the tribe to add Las Vegas-style slots and card games including blackjack at seven casinos on tribal land.
The state gets at least $100 million annually from the deal. The Seminoles get a situation in which it's unlikely any other expansions of gambling will occur in Florida outside of Miami-Dade or Broward Counties. If lawmakers do allow new forms of gambling in the rest of the state, the Seminoles will no longer have to give the state the money.
Among the tribe's casinos that will now be able to add full Vegas-style slots and new card games is the Seminole Hard Rock Hotel & Casino in the Tampa area. It's already been blamed for poor attendance 10 miles away at the Tampa Greyhound Track, which ended live racing in August after 75 years.
Izzy Havenick, vice president of the family-run Naples-Fort Myers Dog Track, said he is deeply troubled by the compact, fearing that patrons will shun the track for a Seminole casino 37 miles away in Immokalee.
He called the deal between Crist and the tribe "a slap in the face of the entrepreneurial spirit of Florida," and to the hundreds of employees of the track in Bonita Springs.
Opponents of the move _ which also include those simply opposed to expanding gambling in the state _ are pinning some hopes on the Legislature, where there is also opposition to the agreement, particularly in the House. Speaker Marco Rubio, R-West Miami, has suggested lawmakers may sue to try to block the compact from going into effect.
Havenick said the racing industry is also trying to figure out how they might be able to help fight the deal.
Winning said the state could have raised more money than it gets from the deal if it had allowed the heavily taxed pari-mutuels to add slot machines.
While pari-mutuel facilities _ horse and dog tracks and jai-alai frontons _ in Broward County will still be able to add slots, some officials of those facilities also feel slighted, because they pay more of their take to the state than the Indians. Those facilities also aren't allowed to have expanded card games like blackjack or baccarat that are now permitted in the Seminole facilities.
Crist's chief of staff, George LeMieux, said negotiators in the governor's office did take into account the concerns of non-Indian gambling operations in Broward County, where voters have approved slot machines, noting three tracks there have already spent money to add slots. The state Constitution also would allow slots in Miami-Dade County, if voters approve it, though so far they have not.
"There's nothing in this agreement that prevents them from having more gaming," at pari-mutuel facilities in those two counties, said LeMieux.
But in other counties, the inability to push for more gaming adds to anxiety by track officials that theirs may be a business heading down the backstretch toward its end.
The Melbourne Greyhound Park cut most of its racing program this year, although it continues to host poker, which has proved very popular. The three tracks in the Jacksonville area have consolidated racing at one venue, and tracks in Orlando, the Miami area and Key West have all closed in the last couple decades.
(Associated Press Reporter Mitch Stacy in Tampa contributed to this report.)