No Casinos, the Florida group behind Amendment 3, which requires any casino gambling expansion to be approved by voters, will challenge the new compact recently signed by Governor Ron DeSantis and the Seminole Tribe of Florida. No Casinos President John Sowinski said, “This violates Amendment 3 in at least three ways.”
Sowinski’s Voters In Charge political action group spent $45 million in 2018 to campaign for Amendment 3, which was approved by 71 percent of voters statewide. No Casinos has been the lobbying force opposing gambling expansion in Florida before and since the 2018 vote.
Terms of the Deal
Under the new 30-year compact, the Seminoles would be allowed to expand gaming at their six Florida casinos by adding craps and roulette; the tribe also would oversee legalized sports betting, including partnering with slot machine casinos, racetracks and jai-alai frontons. Also, the compact would allow the tribe to continue to operate game rooms without being required to run races; and it could expand its operations onto non-tribal lands.
In exchange, the Seminoles would resume revenue-sharing payments of $500 million annually to the state. Florida is expected to receive at least $2.5 billion from the tribe over the first five years of the compact and at least $6 billion by 2030. DeSantis said the deal will create 2,200 new jobs. Seminole Gaming Chairman Jim Allen added several independent studies indicate sports betting would produce an annual cash flow profit of $200 million to $280 million.
Allen said, “We feel the state may be interested in working with us to reinstitute our revenue share and if that is the mindset of the state, we’re happy to sit down and discuss it. We’ve always had a good relationship with Florida in my 20 years.” A special session of the legislature is set for May 17 to consider enabling legislation. The Seminole Tribal Council and the U.S. Department of the Interior also have to approve the deal.
Sowinski said several aspects of the compact would be clear violations of Amendment 3, unless approved by voters first. He stated, “The proposed compact violates the letter and the spirit of Amendment 3. 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. We are committed to defending the integrity of Florida’s constitution and ensuring that the will of the people is respected. Bottom line is, if it’s such a great deal for Florida, for the citizens of this state, why not let the voters have the say.”
The Server Question
Union Gaming Group analyst John DeCree said the compact is “not technically expanding gambling in the state.” He explained it’s only expanding gambling on the tribe’s reservation. added that sports betting isn’t a “casino game,” but a game of skill, not chance; also, while the bets might be made at parimutuel statewide, or via cell phone apps controlled by casinos, racinos and other Florida gaming operators, that’s not technically an expansion because the servers that track wagers are located on Seminole tribal lands.
The same logic was used in New Jersey where Atlantic City is the only jurisdiction where Class III game can be conducted. Therefore, all the servers must be located within the boundaries of Atlantic City, although not necessarily within the walls of the casinos there.
However, one cause for concern could be the provision requiring the Seminoles to pay a 60 percent commission to third-party operators. The federal Indian Gaming Regulatory Act (IGRA) prohibits a tribe from sharing more than 40 percent of its net gaming revenue. “We suspect between the supplier fee and its own independent market share, the tribe will have no problem paying its partners 60 percent commission while still maintaining 60 percent of overall sports win in the state,” DeCree said.
However, gaming attorney Daniel Wallach said the sports betting agreement can expect several legal challenges, even if the secretary of the Interior signs off on the compact. “Placing a mobile server on tribal property and allowing off-reservation gaming at racetracks, in parimutuel facilities, ballparks and the like, that is an un-approvable gaming compact. Under federal case law you can challenge a U.S. Secretary of the Interior determination on a gaming compact as being contrary to law arbitrary and capricious, and it runs smack into a long line of cases that said compacts can’t include mobile wagering.”
Skins Game
DeCree said he expects the Florida legislature will ratify the agreement because the Seminole’s “significant gaming exclusivity in Florida” could have shut out commercial gaming operators. He said, “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.”
