The state of Florida recently agreed not to appeal a 2016 court ruling allowing the Seminole Tribe of Florida to offer blackjack through 2030. In return, the tribe will make revenue sharing payments to the state through the end of the 2018 legislative session if Florida “takes aggressive enforcement action” against designated player games that operate as banked card games at parimutuel casinos. The state will receive about 0 million over the next year from the tribe according to the settlement.
After the 2018 legislative session, or any time before that if the tribe doesn’t feel the state is shutting down the games aggressively enough, the tribe could end its revenue sharing payments. State Senator Bill Galvano, the state Senate’s point man on gambling legislation, said, “If the legislature does nothing, it will be status quo unless the tribe believes there are still table games out there past the 2018 session. And then, they can stop making payments.”
He added, “It’s a tough position for the state to be in. There are many parimutuels that have already started designated player games, and they are quite profitable. So, you’re going to have an enforcement challenge, and then from a legislative policy perspective, the choices have now been significantly narrowed. Do you maintain the status quo of gaming in Florida and rely solely on tribal payments, or do you now look to the parimutuel industry for the revenues in lieu of what you have with the tribe?”
The Seminole Tribe was guaranteed exclusive rights to offer banked card games, in which every player plays against the dealer instead of playing against each other, as in poker. Seminole Tribe lawyer Barry Richard said, “It’s really not complicated. If the players around the table are playing against one person, a bank, it’s a banked card game. If they all have the same bet in a pile and only one’s going to win, then it’s not a banked card game. The tribe is paying a huge amount of money, more than twice as much as all the parimutuels put together, for exclusivity, and that’s what they want. They’re paying for it, they’re entitled to it.”
However, the parimutuels said they’re acting within the law since the designated player who serves as a banker can rotate, like a dealer rotates in poker. If there’s no fixed banker, there’s no banked card game, said John Lockwood, the attorney for the Palm Beach Kennel Club and several other Florida parimutuels. “We’ve implemented game procedures to make sure we’re in compliance with the state law,” Lockwood said. The parimutuels said the state would be taking “aggressive enforcement action” against an activity that is legal—and lucrative. A study of 10 cardrooms by the Innovation Group found they made $55 million in revenue over five years.
Sarasota Kennel Club President Jack Collins Jr. noted, “As far as we’re concerned, we’re completely approved and legit. If you read into this little stipulation, the Seminole Tribe’s whole thing is they’re looking for a complete monopoly. We have the player-bank games now that we’ve been doing for the last couple years, and in the agreement it said they strictly want to enforce the state trying to stop us from what we already have, so that would obviously put us in a worse situation, which we don’t want.”
Richard responded, “It doesn’t matter what you label it. If what they’re talking about when they say a designated player game is a poker game in which the dealer rotates around the table, then that’s fine. But if, in any hand, everybody’s playing against a banker, that’s the issue. It doesn’t matter what they call it.”
More than two dozen parimutuel facilities and card rooms have been authorized by Florida state regulators to conduct “player-banked” games, since initial approval was given to the Palm Beach Kennel Club in early 2012. The Seminole Tribe sued the state in federal court in 2015, arguing the state violated the 2010 compact when it authorized player-banked games. The state countersued, and in a ruling last year, U.S. District Judge Robert Hinkle sided with the tribe, calling designated player games an “egregious example of the cardrooms’ attempt to evade the prohibition on banked card games.”
The state appealed that ruling, leading to the recent agreement.
In another case concerning the Seminole Tribe, Circuit Judge John Cooper in Tallahassee recently filed a written “final declaratory judgment” following his decision last month that he got it “wrong the first time” and now ruled pre-reveal games are illegal slot machines. The new order will allow Jacksonville distributor Gator Coin II to appeal to the 1st District Court of Appeal.
Cooper issued a previous ruling in March stating pre-reveal games were not slots because players had to “press a ‘preview’ button before a play button can be activated.” He said then if the game’s outcome is known, it is not a game of chance. Now, Cooper’s new order said, “to have a chance to receive an outcome other than what is currently displayed by the preview feature, the player must commit money to the machine to be privy to the next preview.” The order states that “play pattern” is an “illegal gaming scheme designed to circumvent prohibitions.”
In a hearing, Richard, the Seminole tribal attorney, explained to Cooper pre-reveal machines violate the tribe’s exclusive right to offer slots outside South Florida. The tribe could withhold revenue sharing funds with the state, amounting to “multi-billions of dollars,” Richard said.
Cooper said his reversal was “not based upon whether the tribe likes the original ruling or dislikes the ruling.” Instead, he reversed his opinion because of further evidence about how the pre-reveal games actually are played, he said.
The case originated when Department of Business and Professional Regulation agents found one pre-reveal game in a Jacksonville sports bar and told the proprietor the machine was an “illegal gambling device.”
