Pari-mutuels say Florida sold
itself short with gambling compact
By Linda Kleindienst and John Holland
Staff Writers
Copyright © 2007, South Florida Sun-Sentinel
Sunday, November 18, 2007
TALLAHASSEE: Florida's ailing pari-mutuel industry says the state sold out for much less than it could be getting when Gov. Charlie Crist last week signed a gambling compact with the Seminole Tribe.
The state will be guaranteed a $100 million annual minimum from the tribe, which now is allowed to offer Las Vegas-style slots as well as card games like baccarat and blackjack at its seven casinos across the state, including Hard Rock casinos in Hollywood and Tampa.
In stark contrast, legislative economists earlier this year projected Florida could collect as much as $1 billion a year by allowing the state's 26 pari-mutuel facilities to offer video lottery.
But the state has given the tribe exclusive rights to expanded gambling outside Broward and Miami-Dade counties. If the Legislature violates that guarantee, the Seminoles won't have to pay the state a dime.
"The state wants to give the Indians a monopoly, which will hurt jobs across the state," said Jack Cory, who lobbies for the Florida Greyhound Association, which represents dog breeders and trainers. "Rather than give the Indians an exclusive, let's let everyone compete. The numbers [in the compact] are too low for what the state could be getting."
In May, the Legislature briefly considered legalizing video lottery to provide property tax relief by using revenue from those games to offset reduced school taxes. Legislative staff estimated the bingo-like machines, defined as "electronic games of chance" that can include traditional card games and poker, would raise $1 billion to $2 billion a year. The plan was rejected by legislative leaders unwilling to dramatically expand gambling.
On Friday, the tribe started a statewide media campaign to tout the benefits of the compact, which the U.S. Department of Interior has 45 days to approve or reject.
"This is really an education effort. The tribe feels that the compact is a complex issue and wants to take it to the people of Florida to provide a better understanding of what it means," said Gary Bitner, a spokesman for the tribe.
The tribe also has set up a Web site, FairShareForFlorida.com, with information about the accord.
Opponents of the deal counter that the financial benefits heralded by the Seminoles and Crist don't take into account the potential loss of tax dollars from non-Indian horse and dog tracks and jai-alai frontons that will be competing with the Seminole casinos.
"In its creative accounting, the Governor's Office has neglected to factor in the loss of taxes that are currently being paid by its pari-mutuels," said Jim McClellan, who represents the Florida Fair Deal Alliance, a group of track owners. "Neither has it studied the economic impact of the loss of thousands of jobs and an estimated $100 million payroll in the communities where these tracks and frontons operate."
The breeding, training and racing of Florida's thoroughbreds is a $3.5 billion-a-year industry with 51,700 employees.
Dick Hancock, executive vice president of the Florida Thoroughbred Breeders and Owners Association, said he expects the compact to especially hurt Gulfstream Park and Calder Race Course.
"Are we on a level playing field to compete with the Hard Rock? No," he said. "I'd like to see if the Seminole nation has enough land to put a race track on it and then sit down and visit with them."
Florida's pari-mutuels have been hurt by plummeting attendance during the past decade. Ten years ago, the pari-mutuels boasted a paid attendance of more than 7.6 million people and gave the state nearly $71.5 million in tax revenue. Last year, those totals fell to 2 million people and $35 million in tax dollars to the state.
"The industry is not doing well. It's not in the government's interest to make us do well, but when they make the market almost impossible to [compete in], that's not good," said Brian Ballard, who represents the Palm Beach Kennel Club.
Unable to compete with the Seminole's Tampa casino, the Tampa Greyhound Track this summer ended 75 years of live racing. Izzy Havenick, vice president of the company that runs the Naples/Fort Myers Dog Track, worries that an Indian casino less than 40 miles away will do the same to him.
Calling the compact a "slap in the face of entrepreneurial spirit," he promised a fight to save the business established by his grandfather.
Three of Broward's pari-mutuels — Dania Jai-Alai, Mardi Gras Race Track and Gaming Center, and Gulfstream Park in Hallandale Beach — are in state Sen. Steve Geller's legislative district. So is the Seminole casino.
"They are barely making it," said Geller, D-Cooper City, who has been a major proponent of video lottery. "Then you come in and give their competitors huge additional [advantage]. Of course the existing facilities will start losing money. How long do you expect businesses can stay in business when they're losing money every year?"
Linda Kleindienst can be reached at lkleindienst@sun-sentinel.com or 850-224-6214.
Seminole Tribes' gain is Florida's loss
© 2007 Miami Herald
Sunday, November 18, 2007
The only thing Gov. Charlie Crist got right about the gambling deal he signed with the Seminole Tribe last week was calling the agreement ''historic.'' But the deal is ''historic'' for all the wrong reasons. The compact is a terrible deal, and a major expansion of gambling in Florida.
With this deal, Gov. Crist has reversed the decisions that Florida voters have made at the ballot on at least four occasions since the 1980s. Voters have consistently said No to serious, statewide gambling. Gov. Crist said Yes. He authorized Las Vegas-style gambling, including card games such as baccarat and blackjack, at seven Seminole facilities across Florida.
Pressure from Interior
Gov. Crist said he made the deal on behalf of Florida residents, ensuring that they get a cut of the profits to the tune of at least $100 million a year for 25 years. He said he felt compelled to make a deal because of pressure from the federal Interior Department to meet a Nov. 15 deadline and because federal regulations that say the Tribe has to get something of value from the deal. Neither reason, as we see it, justifies the compact.
Florida Attorney General Bill McCollum said he didn't believe the Interior Department could enforce the deadline. And in a recent opinion, he wrote that Florida had to give the Tribe something of value, but not necessarily more than what other pari-mutuels and other gambling concerns have. Mr. McCollum has it right.
Others, too, see flaws in the deal and the process. House Speaker Marco Rubio faults the governor for making a ''major public-policy decision with no public discussion, review or debate.'' Rep. Rubio believes Gov. Crist over-stepped his duties as chief executive and encroached into the Legislature's policymaking responsibilities. He is considering a lawsuit. He should file it. Owners of the state's 26 pari-mutuel facilities also are upset. They believe the deal will limit their potential growth and could lead to a reduction in taxes they pay to the state. They also are considering a lawsuit. They should go forward with it.
The economic consequences of the compact are significant. With Las Vegas-style card games and other attractions, the Seminoles now have a product that can be marketed nationally and internationally. The combination of card games and Florida's many tourist-oriented amenities can put the Seminoles on better competitive footing to go after serious gamblers.
In addition to these concerns, the deal also raises other issues:
It may be unconstitutional. Article X, Section 7 of the Florida Constitution prohibits gambling ''other than the types of pari-mutuels pools authorized by law.'' In 1984, voters approved an exception for the Lottery, and in 2004, they gave permission for slot machines in Miami-Dade and Broward counties.
It probably violates state law. Chapter 849 of Florida Statutes prohibits casino gambling and other forms of gambling.
It may encroach on legislative authority. Mr. Rubio has a valid point. This deal makes new policy, a legislative prerogative.
It puts existing gambling at a competitive disadvantage by granting an exclusive franchise the Seminoles, a sovereign entity that Florida has limited ability to control.
It is so lopsided that if pari-mutuels and other gambling concerns get the same deal, the Seminoles won't have to pay Florida a dime.
With this single act, negotiated in secret, Gov. Crist has put at risk much of the hard-earned good will he has with voters across Florida. That makes this a bad deal for Mr. Crist, too.
Governor may have overplayed his hand
A Times Editorial
© 2007 St. Petersburg Times
Sunday, November 18, 2007
Given the open hostility in the Legislature toward Indian gaming, Gov. Charlie Crist had reason to want to avoid a showdown that could leave Florida empty handed. But the compact he has now signed with the Seminole Tribe allows for games that are otherwise illegal, and the governor cannot make law. While there are differing legal opinions, it seems this agreement could require the approval of the Legislature.
While we continue to oppose the expansion of gambling, the deal itself has some merit. Crist tried to avoid the mistake made by the late Gov. Lawton Chiles, who refused to negotiate only to see the Seminoles build casinos without state oversight or revenue sharing. So he agreed to let the Tribe upgrade to high-stakes slot machines, which are now allowed in parimutuel facilities in Broward and Miami-Dade after local voters approve. Crist also granted some exclusivity for payments to the state that would begin at a modest $100-million the first year but are tied to gaming revenues and could rise toward $500-million in the future. Equally important, the compact provides a strong disincentive for any future expansion of gambling: The tribe no longer would be required to share its revenues with the state if gambling beyond the scope of this agreement is permitted.
The problem is that the governor may have exceeded his authority in approving the agreement with the Legislature's consent. State law, written in the wake of a narrowly approved 2004 constitutional amendment, allows only for high-stakes slots. All other forms of so-called Class III casino gambling, including the blackjack and baccarat games Crist approved exclusively for the seven Seminole Indian facilities, are forbidden.
The governor's chief of staff says that federal law governing the sovereign Indian lands requires only that the U.S. Interior secretary and governor approve gaming compacts. But that's misleading at best. The Indian Gaming Regulatory Act provision for tribal compacts refers only to the approval of the "state" and never uses the word "governor." In other words, the state gets to decide who issues final approval and nothing in current law or the Florida Constitution appears to specifically grant Crist such authority.
The governor walked an admittedly fine line as he sought to limit Indian gaming without losing the opportunity for the state to regulate and profit from it. As he tried to bargain in good faith, he also faced public attacks from legislators who promised to fight any agreement. Parimutuel operators who had persuaded voters to let them have high-stakes slot machines in Broward were livid at the prospect of what they viewed as unfair competition.
In the end, Crist dropped his "preference" to work with the Legislature. He may have negotiated an agreement with the Seminoles that could result in neither a dramatic expansion in gambling nor extraordinary profit for the state. But he most certainly threw the issue into the courts by acting alone.
Public voice missing on casino deal
An Editorial
© 2007 Ft. Myers News-Press
Saturday, November 17, 2007
We're happy the Seminole Tribe of Florida has the green light for expanded Las Vegas-style gambling at its casinos on tribal land, but whatever happened to the voice of the people on this issue?
Indians have long had special gaming privileges on tribal lands. It's a reasonable privilege, given that the whole country was taken from them.
But without realizing it and with no public debate or say-so, Florida has just taken a potentially momentous step. We think the state Legislature and the U.S. Senate, in its constitutional advise-and-consent role on treaties, should have a say in this matter. House Speaker Marco Rubio is suggesting a lawsuit unless the Legislature gets to ratify the deal.
Even though this change is limited for now to tribal lands, we can expect significant expansion at the seven tribal casinos liberated under the pact. It could mean a huge increase in gambling in this state, in bankrupted gamblers and their families and perhaps in unsavory organized crime influences. Expect racetracks, already surviving on limited gambling revenues, to seek the right to offer the new games. There is a tribal casino in Immokalee and a dog track in Bonita Springs.
Casino gambling has been bitterly contested whenever it reached the ballot in Florida, and has been rejected several times. In 2004, voters statewide allowed Broward and Miami-Dade voters to approve advanced slot machines at existing pari-mutuel sites. They said yes in Broward, no in Miami-Dade. The Broward vote opened the door for the Seminoles. Under federal law, they can offer what's allowed elsewhere in a state.
Gov. Charlie Crist knew federal approval was on the way. He acted so the state would get a cut of the money and some say in the way the casinos are run.
Under the compact announced this week, the Seminoles get the right to offer card games such as blackjack and baccarat banked by the casino, meaning bigger jackpots. The tribe can also upgrade its slot machines from the bingo-style ones to the more interesting and lucrative Vegas-style machines.
Resistance to casinos may be hypocritical in a state otherwise riddled with racetracks and state lottery games, but people have always rightly seen heavy-duty casinos as a whole different level of gambling.
There's no reason to deal the people and their elected representatives out of this game.
Given bad set of options, best bet is on Seminoles
An Editorial
Palm Beach Post
Monday, November 19, 2007
A fight already is breaking out over the agreement Gov. Crist and the Seminoles signed last week to expand gambling at seven tribal properties in Florida. But the odds of finding a true "good guy" in this fight are slim.
Usually, those who want less gambling would be the obvious good guys. But this time, those people are either naive or greedy.
House Speaker Marco Rubio, R-West Miami, falls into the naive category. He thinks that the Legislature might be able to block the governor's deal with the Seminoles. The legal dispute is whether Gov. Crist has the authority to make the deal on his own. The governor says the Legislature has the legal right to say how the state will spend the $100 million to $150 million Florida will receive from the tribe every year. But he insists that legislators don't have the authority to stop the expanded gambling on tribal lands.
If Rep. Rubio did block Gov. Crist's agreement, the Interior Department likely would cite federal law and allow the Seminoles to add high-stakes slot machines. They wouldn't get exclusive rights to the card games - blackjack and baccarat - that Gov. Crist used to sweeten the state's offer, but they wouldn't have to pay a share of profit to the state, either.
So Rep. Rubio wouldn't stop much additional gambling; he just would prevent Florida from getting a cut. That makes no sense, given new projections that state revenue will be short another couple of billion dollars over the next two years.
The others who don't like the Seminole agreement aren't opposed to gambling; they're opposed to more competition for their own gambling operations.
Because of a 2004 constitutional amendment and follow-up local vote, horse and dog tracks and jai alai frontons in Broward County can offer Vegas-style slots. They're angry that the Seminoles also can offer the card games at three sites in Broward, including the Hard Rock Hotel and Casino west of Hollywood. Other pari-mutuel operations outside Broward, such as race tracks in the Tampa Bay area and near Fort Myers, can't offer even slots to compete with tribal casinos in Tampa and Immokalee as well as Brighton and Big Cypress.
Pari-mutuel operators warn that the Seminole deal will cost Florida, as tribal casinos continue to erode business at the tracks and frontons that also give the state a percentage. Even if their numbers are accurate instead of self-serving - and self-serving accounting is common among gambling lobbyists - it is unlikely that Florida could keep tribal casinos from offering those Vegas-style, higher-stakes slots.
Pari-mutuels statewide probably will begin a push for higher-stakes games, including table games such as roulette that the tribes can't offer. But that would require more changes to the constitution - and mean another expansion of gambling.
The irony is that the pari-mutuel operators who oppose the Seminole deal made it inevitable with their amendment in 2004 to expand gambling at their tracks and frontons. For now, the deal Gov. Crist and the Seminoles signed brings Florida the least new gambling for the most benefit. In this fight, that makes them the good guys.