With less than three weeks left in the 2016 Florida legislative session, the Seminole Tribe of Florida is running a new 30-second television ad promoting its proposed gaming compact. “The Senate Weighs In” features the passage of the compact by the Senate Regulated Industries Committee but notes the full legislature still must approve it, as well as the U.S. Department of Interior. The compact would grant the tribe exclusivity to offer blackjack at its seven casinos, plus add roulette and craps, in exchange for billion over seven years in revenue sharing to the state.
However, Senate President Andy Gardiner said he still isn’t sure if certain changes made to the proposed compact by the Senate Regulated Industries Committee would violate an existing agreement between the state and the tribe. “We probably have to get some revenue estimating numbers to find out. There are some that will believe it affects the existing compact, and if it passes, the existing compact will go away. All the changes make that bill a pretty heavy lift,” Gardiner said.
The tribe already has paid Florida more than $1 billion since 2010 for exclusive rights to offer blackjack under a compact provision that expired last year.
The Senate committee, which oversees gambling in Florida, approved SB 7072 and SB 7074 last week with changes including expanding slot machines beyond South Florida to parimutuel facilities, lowering the effective tax racetracks pay on slots from 35 percent to 25 percent and clarifying that fantasy sports play is a game of skill and not chance. Expanding slots could violate a portion of the existing agreement, which could mean the tribe could reduce or end gambling revenue sharing, which would impact revenue available for the upcoming state budget.
Asked about the current state of the proposed compact, Governor Rick Scott said, “The compact I signed is the right thing for the state. Right now it’s in the House and the Senate, and I respect their decision.”
The proposed compact would allow a special slots-only casino in Miami-Dade County and in Palm Beach County, where the Palm Beach Kennel Club is located. But under state Senate President-delegate Senator Joe Negron’s amendment to SB 7072, parimutuels could add slots in Brevard, Gadsden, Hamilton, Lee, Palm Beach and Washington counties where voters have approved them, and in other counties where voters approve them in the future. He said the countywide approvals are “a reasonable expansion when the voters have approved it.”
Expanding slots beyond Miami-Dade and Palm Beach counties could jeopardize the proposed Seminole compact, observers said. “I don’t think there’s anything wrong with telling the tribe what we want as a legislature and letting them respond. Let’s put something on the table and negotiate from that standpoint,” said state Senator Jack Latvala. Seminole spokesman Gary Bitner commented, “The tribe hopes to continue working with legislators to finalize a deal this session.”
Negron’s amendment also allows decoupling, or removing the requirement that tracks run live dog or horse races in order to offer other gambling, like slots and card rooms. Jai alai facilities also would not have to offer the games. Negron said the objective is to reduce parimutuel permits by 40 percent; 12 of them currently are dormant. He noted the measure calls for transferring from the Seminole tribe revenue share $20 million annually for purses and $25 million a year for a “purse pool” from gaming facilities that opt to discontinue racing.
“We have in the bill generous purse pools frankly coming from people in another activity. We’re taking money from them to subsidize people that want to race and raise horses. We’ve bent over backwards to accommodate their interests,” Negron said. “There’s nothing in this bill that stops a greyhound track from continuing racing. Some folks in greyhound racing, despite decoupling, are going to continuing racing.”
The House Regulatory Affairs Committee also passed a bill, but with language more similar to the original proposed compact.
The courts also could impact the compact, since the Florida Supreme Court will hear a case in July to decide if the legislature must approve parimutuel gambling. If the court determines voters, not the legislature, can make that decision, a casino would be allowed at a racetrack in Gretna, in Gadsden County and the five other counties where voters approved slots. However, the Florida state constitution specifically approves a state lottery and casinos in Broward and Miami-Dade counties, but says nothing about casinos anywhere else in the state.
State Senator Rob Bradley, chairman of the Senate committee, said, “We either craft the future of gaming here, amongst the elected officials, or we leave it to the arguments that courts will consider and litigation will work out.”
Still, the question of allowing slots or not may someday become a non-issue, according to a report by Mary Ellen Klas and Jeremy Wallace of the Bradenton Herald. “Market research studies show the massive millennial generation, 21- to 34-year-olds who outnumber baby boomers, consider slot machines boring and table games only slightly more appealing. Unless the gaming industry finds a way to capture this tech-savvy generation with online gambling or games delivered to their homes and offices through smartphones, even the games the industry is hoping to rescue will die,” the report said.
Michael Pollock, managing director of the gaming-research company Spectrum Gaming, noted, “We can’t assume, as we have in previous generations, that as people enter prime gaming age they are going to gravitate to the same games their predecessors did. It’s just not going to happen. Slot machines, as they are presently constituted, are clearly vulnerable.”
Even Jim Allen, chief executive officer at Seminole Gaming, has doubts about the long-term popularity of slots. He said the tribe is willing to guarantee payments for only seven of the 20-year compact, and noted concern over their longevity “has merit.”
Izzy Havenick, vice president of his family owned Magic City Casino and owner of greyhound tracks in Miami-Dade and Lee counties, noted it’s ironic how a slow-dying industry is being touted to save a fast-dying industry. “We might be mortgaging the future to save ourselves in the present. In 10 years I don’t know if we will look back and say this was the right fight to have or not, but right now our only salvation is to have these machines. Do I think it’s shortsighted? Yes. But the problem is we’re not being given much of a choice. Our hand is being forced.”
The Bradenton Herald report asks, “Should the state continue to give the tribe a monopoly and artificially prop up the parimutuel industry with a product also on the decline, or does it stand down and watch parimutuels, one of the state’s oldest industries, disappear?” State Rep. Richard Corcoran, next year’s House speaker, said, “A lot of us feel they should go out to the free marketplace and survive. If they don’t, they don’t, and if they do, great. But I don’t think they should keep coming to us for some sort of statutory benefits. That just doesn’t work.”
