Scott, Seminoles Sign Gambling Compact
Florida Governor Rick Scott and Seminole Tribe Chairman James Billie.
recently signed a 20-year compact, following months of negotiations. The deal will allow the tribe the exclusive right to offer blackjack, plus craps and roulette, at its seven casinos, in exchange for a minimum of $325 million in the 2017-18 budget year from the tribe’s gaming proceeds; the minimum amount would increase by $25 million every year until 2023, for a total of about $3 billion over seven years. Also, the compact paves the way for the legislature to allow slots-only casinos in Miami-Dade and Palm Beach counties, and permits existing South Florida racinos to seek voter approval to offer limited blackjack.
In a letter to House Speaker Steve Crisafulli and Senate President Andy Gardiner, Scott wrote, “I have executed this compact after months of collaboration, negotiation and discussion,” Scott wrote. “This compact represents an unprecedented level of cooperation between the state of Florida and the Seminole Tribe of Florida, including the largest revenue share guarantee in history at $3 billion, which is three times the prior compact guarantee of $1 billion. With a $3 billion guarantee over the first seven years along with a cap on the tribe’s gaming, it is my hope that this compact can be the foundation of a stable and predictable gaming environment for the state of Florida. My execution of this compact is the first step in the process outlined in law, and I look forward to continuing to work with you and your respective chambers this session in order to ratify this $3 billion historic agreement.” The 60-day legislative session will begin January 12.
Seminole Gaming Chief Executive Officer Jim Allen said adding roulette and craps “will allow us to market across the United States” and appeal to players from South America and Eastern Europe. “We’re appreciative of the governor to allow us to get to this first step. We certainly recognize that there are many more steps to go.” Allen said he already has held one-on-one meetings with about 50 lawmakers.
Both the House and Senate must approve the compact, but state Senator Rob Bradley, who was the lead Senate negotiator, said he was optimistic that it would be ratified, although some Republicans and legislators from Central Florida oppose expanded gambling out of fear it could impact Disney World and other tourist destinations. Still, Bradley said, “I think we have made significant progress with the tribe. We have a product that is ready for consideration. It’s a good, fair deal for the people of the state of Florida. There will be some twists and turns as it goes through the process.”
Bradley worked with state Rep. Jose Felix Diaz, the governor’s office and tribal officials to finalize details of the deal. “With everything you add to this compact, you gain or lose votes. You know that you need 61 votes. How you get there is a matter of compromise and creativity,” Diaz said.
But Bradley’s colleague state Senator Jack Latvala said the compact’s “fatal flaw” is that it only benefits gaming operations in three South Florida counties. “I think it’s going to be a really tough road. If we’re going to have to close down facilities that have been here 70 to 80 years so the Indians have a monopoly and can continue to expand their offerings, that’s just wrong,” he said.
Under the prior agreement that expired July 31, the Seminole Tribe had exclusive rights to offer banked card games at five of its casinos in exchange for revenue payments of about $100 million a year to the state. The tribe also paid at least $234 million a year in exchange for the exclusive right to operate slot machines at four casinos outside of Miami-Dade and Broward.
The new agreement starts with a minimum guarantee of revenue to the state at $325 million a year in the first and rises to $550 million in the seventh year. The Seminoles will be allowed to offer banked card games at all seven of its reservations, including Big Cypress and Brighton. The agreement does not allow the tribe to open a new casino on its Fort Pierce reservation. “The bottom line is it’s a significant increase in revenue sharing with the tribe,” Bradley said.
Scott’s letter also states under the new compact the Seminoles will spend $1.8 billion in capital investment and create 4,800 new jobs.
A critical companion measure to the compact would allow Miami-Dade and Broward racinos to add blackjack. Also up to 750 slot machines and 750 “instant racing” may be phased in over three years at the Palm Beach Kennel Club and at a new facility in Miami. The agreement also limits parimutuel licenses in other parts of the state. Voters in six counties have approved slot machines at dog and horse racetracks or jai-alai frontons, but the compact only allows slot machines in Palm Beach County. Nick Iarossi, a lobbyist who represents a Brevard County dog track and horse breeders, said regarding lawmakers representing Brevard, Lee, Gadsden, Hamilton and Washington counties, “It’s going to be tough for them to go home and face the voters of their counties who approved a referendum for slots if they aren’t also included if a county like Palm Beach gets it.” Magic City Casino Vice President Izzy Havenick, whose company won a slots license for the dog racetrack in Bonita Springs in Lee County, said, “It’s very impressive that the governor got $3 billion to pick winners and losers and put longstanding family businesses like mine out of business. From our standpoint, we get a new casino in Miami-Dade County, right next to us, and we lose any potential to be able to offer another product at our facility in Lee County. We’re getting hit on both coasts,” Havenick said.
The proposal also allows the legislature to lower the tax rate on South Florida casinos from 35 percent to 25 percent. And, it authorizes lawmakers to decouple gambling operations from racing, a move that would save the industry millions of dollars by reducing the number of dog and horse races needed to stay in business. Decoupling is supported by animal rights groups but strongly opposed by horse and dog breeders and trainers. Iarossi said decoupling would severely impact the horse industry in Ocala, which supports more than 72,000 jobs and generates a $6.5 billion economic impact on the state, according to the Department of Agriculture and Consumer Services. “If there’s nowhere to race thoroughbreds in the state of Florida, it’s going to decimate the breeding industry. It would be killer for Ocala, and really for all the horsemen jobs associated at the tracks in Tampa and South Florida and Miami. Those jobs will all go away,” he said.
The Seminole tribe agreed to limit the number of slot machines to 3,000 at each of its seven casinos, as well as 150 banked card games and table games at each of the facilities. It also would have to continue to make payments to the state even if a new slots casino opens in Miami and/or Broward counties. The Malaysia-based Genting Corporation purchased the former Miami Herald building where it said it wants to build a full casino resort on Biscayne Bay. The Fontainebleau in Miami Beach also has been mentioned regarding a slots license. And all the large gaming companies—Las Vegas Sands, MGM Resorts, Caesars Entertainment, Wynn Resorts and others—have expressed an interest in a South Florida integrated resort.
John Sowinski, spokesman for the anti-gambling group No Casinos, said, “We’re obviously disappointed this provision provides expansion of gambling both on the reservation and off the reservation. Using the compact as a tool to expand gambling runs counter to the entire tenet of having to give the tribe banked card games in the first place.” The group claims provisions allowing blackjack and slots outside of tribal casinos violates the Florida constitution because the law gives voters, not legislators, the authority to allow casino-style gambling, Sowinski said.
He added No Casinos supports putting a constitutional amendment on the ballot requiring any gaming expansion to be approved by a statewide referendum—a proposal under consideration in the House, which also supports a plan to contract the state’s racing industry by using some of the revenue generated by the new compact to “buy back” existing gambling permits, allowing struggling track operators a way out.
Under the proposed compact, the Seminoles agreed not to object to intrastate online gambling should that come about, and also agreed to allow Florida lottery tickets to be sold at gas pumps. The agreement also would set aside nearly $2 million a year to help problem gamblers.
