A landmark agreement between the Seminole tribe and the state of Florida will mean the introduction of sports betting, more casino games, and more casinos in the state. The deal was reached between the tribe and the administration of Governor Ron DeSantis, and will be considered by the full legislature in a special session that begins on May 18.
The convoluted gaming industry in Florida has always been a patchwork quilt. The Seminoles introduced gaming to the state more than 20 years ago with bingo halls, but quickly grew into smaller casinos. With the purchase of Hard Rock International in 2007, the tribe built two Hard Rock casinos, one in Hollywood and the other near Tampa. The two casinos are some of the most successful in the world. The tribe now operates seven casinos in the southern tier of the state.
In order to add more Class III gaming, the Seminoles agreed to pay Florida millions of dollars each year to guarantee exclusivity. The racetracks of the state—harness, standard bred and thoroughbred, as well as dog tracks and jai alai frontons—objected. Referendums were passed in several counties in South Florida and racinos were created. The Seminoles ceased payments of $350 million to Florida several years ago when player banked card games were permitted, claiming this violated their deal for exclusivity.
Meanwhile, compact negotiations went nowhere and gaming evolved. The legalization of sports betting and access to the huge Florida market spurred more compact discussions. In the meantime, however, the Seminoles teamed with the Disney resorts to get a referendum passed in 2018 requiring voter approval for expanded gaming. How that referendum will affect the just announced deal has yet to be determined.
Under the proposed deal, the Seminoles would be able to offer retail and online sports betting, online casino wagering and would be permitted to add roulette and craps to their current lineup of gaming options, previously not permitted.
In addition, the tribe would be permitted to build three new casinos on its reservation. GGB has learned that the tribe was talking to Las Vegas Sands earlier this year about partnering in one of those new casinos but negotiations were halted as some of the items in this agreement were questioned. Other companies such as MGM Resorts and Wynn Resorts could also be involved.
In return, the tribe would pay Florida between $500 million and $600 million every year for 30 years, an increase over the previous compact, which was for 15 years, with a guarantee of $2.5 billion over the next five years and at least $6 billion over the next decade.
For the parimutuels, the tribe agreed to drop its objection to the controversial card games, and also would be permitted to accept sports wagers, but the tribe would take cut of the action, reportedly around 40 percent, minus fees to sports betting suppliers. The tribe will pay the state a 13.75 percent compact payment on sports betting revenue from its own brands and 10 percent from the parimutuel bets. There will be no additional tax on the parimutuel revenue.
The tribe, however, will be prohibited from accessing player data from bets made at the parimutuels. The tribe is also incentivized to reach deals with at least three parimutuels quickly or the rate paid to the state increases 2 percent after 90 days.
The tribe and the parimutuels could negotiate with current sports betting operators like DraftKings, FanDuel, Barstool, BetMGM and others to bring their brands to Florida.
It is unclear how the agreement would impact the professional sports teams and the stadiums and arenas in the state. Last week’s sports betting deal reached in Arizona included those entities in the deal, but there’s no mention of it in the Seminole compact.
The tribe also agreed to not oppose a possible casino in Miami Beach, which Jeffery Soffer, the owner of the Fontainebleau wants to open. Soffer would transfer the gaming license he holds for the Mardi Gras Casino and Racetrack to the hotel. The path to that eventuality would be long and tortuous. Miami Beach residents and public officials, including Mayor Dan Gelber, oppose gaming. To accomplish this, Soffer needs a law passed by the state legislature, that would also ignore city zoning codes. There’s also a question about the “portability” of the license. All racino gambling is conducted today in jurisdictions that have approved gambling via a referendum. Since Miami Beach has not passed such a referendum, this could be a big issue.
DeSantis said the compact solved several problems at the same time.
“This historic compact expands economic opportunity, tourism, and recreation, and bolsters the fiscal success of our state in one fell swoop for the benefit of all Floridians and Seminoles alike,” DeSantis said. “Our agreement establishes the framework to generate billions in new revenue and untold waves of positive economic impact.”
In addition to the legislature, the federal Interior Department must approve any compact, and this one is no different. Officials require a very high degree of exclusivity from any tribe that makes payments to any state for gaming. Because the rules governing the parimutuels have changed, the stance of Interior is uncertain.
Reports say the Senate is on board with the deal, but the House is a different story. The May 17 special session should clarify that concerns, but there are certain legal challenges that will be raised, mostly centering around the recent constitutional amendment that requires voter approval for any gaming expansion. The Disney group is certain to be unhappy with these developments, which could allow mobile sports betting on the very grounds of their resorts. Last year, the NBA season was conducted at Disney facilities in Orlando during the pandemic, and with the NBA being a supporter of sport betting, Disney will likely object. Several Miami businessmen, including Norman Braman, the former owner of the NFL’s Philadelphia Eagles are planning to oppose the measure, and the powerful No Casinos group is gearing up.
“We call on the governor and our legislators to honor the will of the people, who demanded that any new casino gambling authorization occur at the ballot box, not behind closed doors in Tallahassee,” John Sowinski, president of No Casinos, said in a statement. “We are committed to defending the integrity of Florida’s Constitution, and ensuring that the will of the people is respected.”
Nonetheless, Seminole Chairman Marcellus Osceola Jr. said it was an “historic agreement that cements our partnership with the state for decades to come.”
“The Seminole Tribe of Florida is committed to a mutually-beneficial gaming compact with the state of Florida and looks forward to its approval by the Florida legislature, the Seminole Tribal Council and the U.S. Department of the Interior,” Osceola said in a statement.
Union Gaming analyst John DeCree says the deal is good for everyone involved, particularly the industry as a whole.
“Given the tribe’s significant gaming exclusivity in Florida, commercial operators could have largely been excluded,” he wrote in a report to investors. “We believe the inclusion of multiple online skins as ‘management contractors’ with what is essentially a 40 percent tax rate is a significant win for the industry. We expect Florida to be a very large betting market with plenty of revenue to go around.”
Meanwhile, a measure to create the Florida Gaming Control Commission, which would be overseen by the Attorney General’s office, got a second reading April 21. So did a bill that would ban live greyhound racing and let jai alai frontons and quarter horse racetracks opt out of live racing but still retain their parimutuel permits Both recently passed out of the Senate Regulated Industry Committee.
