Under its 2010 gaming compact, the Seminole Tribe of Florida has exclusive rights to offer slot machines outside of Miami-Dade and Broward counties, in return for monthly payments to the state of about 0 million. Another provision allowing the tribe exclusive rights to offer blackjack at its South Florida casinos expired last October, but the tribe continues to operate the games and to make monthly payments to the state. Both situations could change if lawmakers pass state Senator Bill Galvano’s sweeping, recently introduced gambling legislation.
The proposal is a means to change Florida’s gambling laws as well as to reach consensus with the Seminole Tribe regarding a revenue sharing plan with the state that could mean as much as $250 million in annual revenue. The legislature would have to ratify any compact for it to become law.
Galvano said “To effectively address an issue like gaming that involves an almost century-old industry and a sovereign within our own borders, it has to be rolled out procedurally correct. The bill that has been filed is comprehensive on the industry side. It really includes most everything that has been discussed of late.”
He added, the bill “is a sincere effort to try to address these issues in a comprehensive way and balance private industry with maximizing revenues from the Seminole Tribe. It is also incumbent on the Seminole Tribe to negotiate back toward us. It’s a much better process to be addressing all the issues comprehensively by putting the state’s position out there and then having the tribe respond. What I want to avoid is death by 1,000 cuts.”
Recently elected president of the National Conference of Legislators from Gaming States, Galvano said he filed the measure two months before the legislative session started to give legislators and the Seminole Tribe time to work out an agreement. Galvano played a key role in negotiating the state’s 2010 gaming compact with the tribe and he is the Senate’s lead negotiator again this year.
Under the proposed 112-page bill, the compact negotiated by Governor Rick Scott and the Seminole Tribe last year would be approved but with certain trade-offs. The governor’s proposed 20-year compact would guarantee $3 billion over seven years in exchange for giving the tribe exclusivity to offer craps and roulette at its seven casinos in Florida, and slots and blackjack outside Miami-Dade, Broward and Palm Beach counties. The dog track in Palm Beach would get slot machines, and parimutuels in Miami-Dade and Broward could add blackjack. If lawmakers approved any gaming expansion beyond that–including authorizing slot machines in eight counties where voters approved them, which the Seminoles have opposed–the tribe could stop making payments to the state.
The compact measure passed a Senate committee but was postponed indefinitely after senators attached a companion measure authorizing six additional slots licenses outside Miami-Dade and Broward counties—which could endanger the exclusivity clause of the compact.
Under Galvano’s bill, parimutuels would be able to offer up to 25 blackjack tables per track with a $100 maximum bet on two-card wagers. Blackjack operators would have to pay a 25 percent tax on monthly gross revenues. In addition, parimutuels could offer slots as long as the venue is located in a county where voters approve them after January 1, 2018. Also as part of the bill, a new slots license also would be available in Broward and Miami-Dade counties. As a footnote, Galvano recently acknowledged as recently as three years ago, he did legal work for real estate developers Turnberry Associates, owners of the iconic Fontainebleau Hotel, which is interested in securing that license.
The tax on slot revenue would decrease from 35 percent to 25 percent. Also gaming would be allowed at slot venues and cardrooms 24/7.
The bill would create an Office of Amusements in the Department of Business and Professional Regulation to regulate daily fantasy sports. DFS licensees would pay an initial fee of $500,000 with annual renewals of $100,000. Smaller operators would pay less.
In addition, horse and dog racetracks and jai alai frontons could decouple—meaning they would not have to offer live events in order to continue to operate lucrative cardrooms and slots. And, among other provisions of the bill, lottery tickets could be purchased at gas pumps.
Galvano believes this year House leaders may accept slots expansion beyond Miami-Dade and Broward counties in exchange for a net reduction in live gaming permits and venues, which would be the result of a provision of Galvano’s bill allowing the state to buy out the permits of struggling parimutuels.
In a response to Galvano’s proposal, House Commerce Committee Chairman Jose Felix Diaz, Galvano’s counterpart in the gambling negotiations, tweeted, “@FLSenate look forward to reviewing this bill and working with @BillGalvano @FLGovScott the FL House and the Tribe on this imprtnt project.”
A couple of issues overshadow the upcoming negotiations in the Senate and House. First, U.S. District Judge Robert Hinkle ruled in November that the Seminoles could continue to offer blackjack because the state had reneged on the contract by allowing parimutuel cardrooms to offer electronic versions of blackjack. The judge said the tribe could keep its blackjack tables until 2030.
Another issue is whether the state Supreme Court will rule that Gretna Racing in Gadsden County can offer slot machines, which voters approved in a referendum, or if the legislature has the final word. A decision in favor of Gretna Racing could lead to slots being allowed in seven other counties where they were approved by voters. The Seminoles could decrease the gambling revenue they’re required to share with the state if slots are expanded.
Because the tribe won its recent court case, legislators may look more favorably on Galvano’s proposals. Still, it’s a delicate balancing act. “They’ve been good partners with us, and the funds are substantial. But it’s hard to ignore voters in eight counties that are telling us that they not only want these games but they want the revenues and the economic development that come from them. So when you look at gaming comprehensively, you can’t ignore the economic development that comes on the private industry side and simply just look at revenue that comes on the compact side.”
Galvano said the Senate Regulated Industries Committee plans to begin its consideration of his measure on January 25, in anticipation of the March 7 start of the legislative session. As in previous years, passing any gambling proposal still is “a heavy lift,” Galvano said.
