High-stakes gambling battle: tribe vs. parimutuels

By Mary Ellen Klas
© 2009 Miami Herald
Sunday, March 1, 2009

The blackjack and baccarat tables at the Seminole Tribe's Hard Rock casinos could be shut down if the Florida House of Representatives has its way in the 2009 legislative session. It's the latest bid in the high-stakes war over the future of gambling in Florida, and it could be one of the most tangled battles of the legislative session.

The Seminole Tribe has mounted an aggressive lobbying effort to get House leaders to change their minds and accept the gambling compact negotiated by Gov. Charlie Crist. South Florida's seven horse and dog tracks and jai alai frontons have been campaigning for the past two years to reject it and replace it with one that makes it easier for them to compete with the tribe.

And on the sidelines are 19 other parimutuel operators throughout the state who also want a piece of the slot-machine pie that South Florida now commands. They want legislators to allow them to install Class II slots, also known as video lottery terminals.

''The appetite for the Florida House of Representatives is not there to expand the card games,'' said Rep. Bill Galvano, the Bradenton Republican who headed the select committee charged with recommending a course of action for the House.

He echoes the concerns of many in the Senate who wonder if the state could have negotiated a better deal in the agreement with the Seminoles and if the 25-year gaming expansion promised by the tribe could be more harmful than helpful.

AN EXCLUSIVE DEAL

The Seminoles, who have transformed themselves into an entertainment and gambling juggernaut, orchestrated a competitive coup in 2007 when they negotiated a deal with the governor to become the only gambling operator in the state to offer blackjack and other banked card games.

They also were allowed to offer Las Vegas-style slot machines -- like those at South Florida's ''racinos'' -- in return for sharing with the state at least $100 million a year in revenue for 25 years.

With Florida's budget facing a $5 billion shortfall, state lawmakers know they can't turn their backs on the Seminoles' money but must also consider the existing gambling tracks and frontons.

On top of the revenue imperative is the legal one. The Florida Supreme Court threw out the governor's compact with the tribe last July when it ruled that because blackjack and other table games weren't already legal in Florida, lawmakers needed to give their blessing to the deal in order for the Seminoles to offer the games.

If the state doesn't renegotiate a compact, the federal government could allow the Seminoles to operate slot machines without sending a penny to the state.

Federal Indian gaming regulators have said that in order for a tribe to share revenue with a state, the tribe must get something exclusive in return. Crist gave the Seminoles blackjack and table games, but House leaders now say they won't agree with that provision, even if the tribe has invested millions into offering blackjack and training dealers.

''This Legislature can go back and renegotiate a new compact that doesn't necessarily have to include the same card games,'' Galvano said.

The South Florida parimutuels want lawmakers to narrow the competitive advantage the tribe has over them. They're hoping for passage of a bill -- approved by the Senate last year -- that would reduce the tax rate on their South Florida slot machines from 50 percent to 35 percent. In exchange, they would offer a guarantee that the industry would send at least as much tax money to the state as it does now -- about $210 million.

They argue that the high tax rate is stifling investment, making them less able to create jobs. They also want lawmakers to consider giving the tribe exclusive use of blackjack only in geographic areas outside of South Florida.

A SEDUCTIVE OFFER

The tribe has started pushing back. Using television ads, billboards and public relations, the tribe is trying to convince legislators that if they preserve blackjack and the gambling compact, the tribe will make good on its promise to build new and expanded casino resorts in Hollywood, Tampa, Coconut Creek and Immokalee.

And it's dangling a carrot hard to resist: the creation of 45,000 jobs over the next 10 years and $288 million in the bank for next year's recession-shrunk budget.

Mary Ellen Klas can be reached at meklas@MiamiHerald.com