The Florida Senate Regulated Industries Committee recently voted 9-3 to approve SB 7074, which ratifies the Seminole compact and allows the tribe to continue to offer blackjack and to add roulette and craps at its seven casinos in exchange for billion over seven years. The committee also voted 8-4 for SB 7072 that would allow horse and greyhound racetracks and jai-alai frontons to decouple racing and games from offering other gambling, like card rooms or slots; lower the tax rate on slot machines from 35 percent to 30 percent; authorize additional slots permits in Miami-Dade and Palm Beach; and allow state regulators to use up to million in gaming compact proceeds to buy back inactive permits in order to decrease gambling’s footprint in Florida.
After the vote, Seminole Tribe spokesman Gary Bitner said Chairman James E. Billie “and other leaders of the Seminole Tribe of Florida want to thank Chairman Bradley and members of the Senate Regulated Industries Committee for their work on the Seminole Compact. The tribe hopes to continue working with legislators to finalize a compact agreement this session.” The tribe has said it would commence a $1.8 billion expansion plan, including a new 500-room guitar-shaped hotel at its Seminole Hard Rock Tampa, if the compact is ratified.
Bradley said, “I wanted there to be an understanding of what’s at stake. There hasn’t been a lot of discussion and this is complicated. We have a lot of strong personalities on this committee, so the fact we were able to get a bill out says a lot.” As expected, committee members with gambling interests, including Seminole casinos, in their districts voted for the measures. Those from “family-friendly” areas near Disney resorts were opposed.
State Senator Joe Negron offered an amendment rolled into SB 7074 that he said would generate an annual net increase in revenue to the state of $90 million – $120 million a year. The amendment would allow slots at dog and horse racetracks in Brevard, Gadsden, Hamilton, Lee, Palm Beach and Washington counties, where voters have approved them. It also would authorize Scott to renegotiate a gaming compact with the Seminole Tribe to allow for the expanded games, in return for a lower revenue share than $3 billion.
State Senator Jack Latvala endorsed Negron’s proposal. “I don’t think there’s anything wrong with telling the tribe what we want as a legislature,” Latvala said.
But state Senator Rob Bradley, chairman of the Senate Regulated Industries Committee, said he opposed the amendment because “it expands gaming more than I’m comfortable with.”
In an unusual step, prior to the vote, Bradley, who helped negotiate the Seminole compact, personally wrote to each member, asking them to vote against Negron’s proposal and warning if the compact doesn’t pass the issue could be decided by the courts.
“If the legislature punts, we could end up with the most significant expansion of gaming in Florida history while taxpayers only get a fraction of what they receive from gaming operations in the present arrangement. Such an outcome is not acceptable to any of us,” Bradley wrote.
Bradley was referring to a lawsuit brought by Gretna Racing LLC in Gadsden County, which is suing to receive a slots license since county voters approved slots in a referendum. If the state Supreme Court decides for Gretna Racing, communities across the state could hold referendums to allow slots at their dog and horse tracks, and the state would have to issue them, Bradley said. That could jeopardize any revenue sharing now authorized by the Seminole compact.
Negron’s proposal is a significant shift from the initial compact negotiated by Governor Rick Scott and the Seminole Tribe. Under the original compact, the tribe agreed to allow slot machines at a Palm Beach County track and a new casino in Miami-Dade. Observers said changing the terms of the deal to allow six new gambling locations could cause the deal to fail in the final weeks of the legislative session, ending March 11. They noted the Seminoles may not have any issues with the three North Florida counties, but they likely would object to slot machines at facilities in Brevard or Lee counties, which they might consider to be competition to their Tampa, Immokalee and Big Cypress operations.
Negron stated, “The voters have approved it. I don’t think the government should stand in the way of voter preferences that have been expressed at the ballot box. It’s particularly ironic when the state of Florida is running a $5 billion a year numbers game called the Florida Lottery. We are a state that has gaming, including voter-approved lottery, so to me if communities have approved it I don’t see why the legislature would stand in the way if citizens elect to spend their discretionary entertainment dollars.”
Negron’s amendment also would reduce the tax rate on slot machines from 35 percent to 25 percent. He explained the additional tax revenues from expanded games would offset any loss in revenue from Seminole compact. Negron added, “We have some rough ideas of what additional revenue would come from some of the parimutuels that have additional slot opportunities and how that offsets” the revenue from the Seminoles. “The tribe has to look at the benefits it is getting for exclusivity and additional games and the opportunity for expanded business opportunities and what they’re willing to give up,” Negron said.
Negron added, ” I think the compact is in the best interest of Florida moving forward. There are ongoing discussions about where we are going to land, but everyone understood at the outset that that was the beginning point. The Seminole Tribe wants a compact to pass and they’ve known all along there would be modifications and revisions.” He added, “If you have a pure compact, and that’s all you have, it’s not going to pass out of this committee. It’s very important that we have geographic concerns echoed in the amendment and I think we can go back to the Seminole tribe and negotiate out a compact.”
Racing Decoupled
Negron’s amendment also includes a “decoupling” provision that would allow parimutuels to stop running live races if they want to offer other gambling, like slots and card rooms. Negron said requiring live racing is “arbitrary and outdated. I see no public policy rationale to tell a business to engage in an activity.” He added the requirement tying racing to slot licenses is “anachronistic to me” because the sports are on the decline.
In a statement, the Florida Horsemen’s Benevolent and Protective Association said it “strongly opposes ANY form of decoupling whatsoever.” Former Lieutenant Governor Jeff Kottkamp, representing the Florida Greyhound Association, said Florida voters have rejected casino gambling three times and they “never contemplated that these racetracks would be converted to casinos. That’s what decoupling does. It ignores the will of the people. It ignores the history of Florida,” he said.
Bradley commented legislators are “very sensitive and cognizant of the effects on the horse industry.” He said a proposal to shift $20 million from payments from the Seminoles and $25 million from slots and card room revenues at parimutuels that decouple “attracts the top horses to facilities in Florida and creates a revenue stream so that the business of raising horses remains the viable business that it is today.”
Negron was less successful with a proposal to make daily fantasy sports games legal in Florida and set up a regulatory structure within the Department of Business and Professional Regulation.It would have required daily fantasy sports companies to pay $500,000 to register in Florida and provide assurances their games are fair contests with real winners. However, in passing SB 7074, the Senate Regulated Industries Committee inserted language sponsored by Negron to allow for fantasy sports without affecting the Seminole’s payments to the state under the compact.
John Sowinski of the anti-gambling group No Casinos said after the Senate committee’s vote, “The compact started as an expansion of gambling and today, it became an explosion of gambling across Florida.” He stated using tribal gambling compacts “as a vehicle to expand gambling for every different gambling interest in Florida is completely antithetical to what compacts exist for. The bill that passed out was worse than where it started.”
Senate President Andy Gardiner now must refer the measure to another committee before it passes on to a full vote in the chamber.
In the House, the Regulatory Affairs Committee also has ratified the Seminole compact and approved a companion measure that tightens loopholes in the state’s gambling laws, allows slots in Miami-Dade and Palm Beach counties and offers new gaming options outside of South Florida without impacting the Seminole compact. The committee also passed a bill requiring any additional expansion in Florida not already approved in the compact to receive statewide voter approval through a citizen-led initiative.
The House measure also would allow decoupling of greyhound racing and most horse racing but would not affect thoroughbred racing at Gulfstream Park and Tampa Bay Downs. The House proposal would direct $10 million from Seminole payments to thoroughbred purse pools. Jai alai frontons also would be required to still offer live matches, unlike the Senate proposal.
State Rep. Jose Felix Diaz, a sponsor the measure, said, “There’s definitely a point where the bill gets too heavy. I don’t know if we’re there or not. Every shift in the proposal is going to lose a vote and gain a vote.” Diaz said he feels the House package will pass but on “a very close vote.”
Another Band Heard From
Meanwhile, recently released documents indicate in 2014 the Alabama-based Poarch Band of Creek Indians asked Florida Governor Rick Scott for a gambling compact, stating the tribe only wanted to build a poker-style card room on its one-acre trust parcel near Pensacola, not a Las Vegas-style casino with blackjack as originally requested. In return, the tribe said it would pay Florida $1 billion over five years.
Scott’s then-General Counsel Pete Antonacci questioned whether one acre was large enough for an Indian casino under the Indian Gaming Regulatory Act. In response, the tribe’s attorneys said there is “absolutely no limitation or minimum acreage requirement in federal law that would restrict a Tribe’s authority to either engage in Class III gaming or to enter into a compact.”
On August 20, 2014, Tribal Chairwoman Stephanie Bryan met with Antonacci and staff members. Antonacci requested additional documentation regarding the tribe’s eligibility to offer gambling, a compact draft and details about the Poarch Band’s presence in Florida. Tribal lawyers responded with case law and regulatory decisions claiming land held in trust for a tribe could be considered Indian lands even if uninhabited and not part of a reservation. They said the Poarch Creeks “exercised governmental power” over the parcel by ordering a survey, clearing the site with their “own staff and equipment” and “periodically” having tribal police patrol there.
Two days later, Antonacci wrote he “continued to have questions” about whether the tribe was able to enter into a compact. Meanwhile the Florida-based Santa Rosa County Creek Indian Tribe wrote a letter to Scott in which tribal Chairman Larry Holt expressed concern about “out-of-state Native American groups attempting to bring gaming into Florida,” calling the Poarch Creeks carpetbaggers and asking Scott to “protect the undeniable rights of the Native American people of Florida.” He added, “On behalf of our tribal council, over 1,200 tribal members and other Native Americans throughout the state, we request that those attempts be blocked.” There is no record that Scott responded in writing to Holt’s letter.
On September 11, 2014, Antonacci again wrote to Bryan, stating “it is premature for Florida to engage in any compact negotiations until the Poarch Band obtains a Indian lands determination from the United States Department of Interior.” Antonacci added the tribe’s efforts to have governmental power over the one-acre tract “appear to be far short of what is required.”
Bryan wrote back to Antonacci, stating she believed the tribe could open a Class II facility on the site “at any time” and Florida “would not be entitled to any revenues or be able to tax or regulate it.” She noted the Poarch Creeks preferred to offer Class III gambling but, “subject to negotiation and in return for suitable consideration, would forego its Class III rights” for the parcel. The consideration, Bryan said, would be an intergovernmental agreement between Florida and the Poarch Band to offer Class II gambling.
The tribe offered to surrender four of the eight parimutuel permits it holds along Interstate 10 in North Florida, as well as to build a $200 million – $250 million facility and acquire 30 surrounding acres for parking and other non-gaming uses. Bryan’s letter also stated, “We believe that our proposal provides an approach to address multiple gaming-related concerns that affect the state. Provided that suitable consideration can be agreed to, the expansion of Class III gaming will not occur and in fact our proposal to ‘give up’ four of our permits reflects a reduction of gaming.”
In February 2015, the Associated Press reported the Poarch Creeks “want to operate bingo-styled slot machines in parimutuels in Jacksonville, Pensacola and Gretna. In exchange, the tribe says it will return six permits it has in hand for other locations. A description of the plan asserts the state would earn nearly $2 billion over the next 10 years.” Last year tribal officials said they might grow and sell marijuana on the property if a compact doesn’t happen.
As of now, the Poarch Creeks are awaiting a determination from the U.S. Department of Interior. Regarding a possible compact, Scott’s spokeswoman Jeri Bustamante said, “There’s no update on this.”
About 600 Poarch Creek tribal members live in Florida. The tribe operates casinos in Alabama: in Atmore, just over the Alabama-Florida line, Wetumpka and Montgomery. They also operate Creek Entertainment Gretna, which has a poker room and is the subject of a lawsuit before the Florida Supreme Court.
