Seminole compact deals Florida a bad hand

By Alan B. Koslow
Copyright © 2009, South Florida Sun-Sentinel
Sunday, November 15, 2009

Florida House Speaker Larry Cretul and Senate President Jeff Atwater are right about the governor's proposed Seminole gaming compact. It's a bad deal for Florida.

The compact is intended to enhance state revenues with annual tribal payments, but it creates a de facto monopoly that will stifle competition in the gaming market in Florida.

Gov. Crist's stated intention is to increase revenue for Florida's educational system. But the compact actually weakens this goal by foreclosing potential additional revenue from non-tribal facilities and granting the tribe several "outs" on their payment obligations.

Essentially, the compact grants the tribe statewide Class III gaming exclusivity, except for existing pari-mutuels, specifically the seven Miami-Dade and Broward County pari-mutuel gaming venues (including Hialeah Park). Under the proposal, if any pari-mutuel located outside of Broward and Miami-Dade is granted additional gaming rights, the tribe's annual calculated financial obligation to the state is fully removed. Further, a back-door provision prohibits pari-mutuels from transferring or moving their gaming operations. In contrast, the tribe has full rights to move and expand within its jurisdictional reservation under the proposed compact.

While an approved compact would automatically lower the onerous 50 percent gaming tax rate to 35 percent — compared to the 100 percent exemption on tribe receipts — the compact further favors the tribe by calculating financial obligation for the tribe and the pari-mutuels using different formulas. The tribe's financial obligation, calculated as a sliding scale percentage of its net win, is significantly less than the rate imposed on pari-mutuels. Furthermore, the tribe does not pay sales, tourist or property taxes, so its overall tax rate remains much lower than non-tribal facilities.

The Legislature must insist on a compact that promotes competition among all players. Both tribal and non-tribal facilities should be allowed to expand and relocate — without increasing the overall number of locations. This will generate the greatest revenue potential for Florida. Additionally, the option to grant Class III gaming for pari-mutuels outside of Dade and Broward should be kept open, which can be a source for additional much-needed revenues.

Speaker Cretul, Sen. Atwater and the Legislature must insist on a level playing field,and the tribe should join with the pari-mutuels to help grow the gaming market in Florida.

Alan B. Koslow is a Fort Lauderdale attorney at Becker & Poliakoff, P.A. who represents pari-mutuel and other gaming interests.