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7 Points About The Florida Gaming Compact

FILE: Blackjack Photo: Seminole Hard Rock Hotel & Casino

In our ongoing quest to bring you the best reporters and bloggers in their field we are delighted to announce that we have added a shiny new gem to our team. 

Nick Sortal, South Florida’s best journalist when it comes to covering gambling is now featured on SouthFloridaReporter.com 

Nick started at the South Florida Sun-Sentinel in 1985 and worked in sports, features and news before becoming the gambling writer in 2007. 

We welcome Nick and like you we will be looking forward to his straightforward reporting on gaming and its impact on the State of Florida.

Note: Later today, Feb 1, Governor Rick Scott will meet with the Seminole Tribe of Florida to discuss the economic impact and job growth opportunities the gaming compact will have on Florida. Governor Scott signed the compact with the Seminole Tribe of Florida in December and it is pending approval by the Florida Legislature. To view the compact, click HERE.

The following article lays out 7 points about the Gaming Compact…

Last summer saw the end of a five-year deal that had let the Seminole Tribe of Florida run blackjack and baccarat card games in exchange for $1 billion for Florida’s state coffers. Now that’s it’s time to renew a deal, Gov. Rick Scott has proposed a seven-year agreement with the tribe that would bring $3 billion to the state, while giving the tribe exclusive rights to certain facets of Florida’s gambling scene.

Scott’s proposal, which must be approved by the legislature and is currently being heard by the Senate Committee on Regulated Industries, expands gambling not just for the tribe, but for select other operators. In addition to letting the Seminoles offer roulette and craps (they now just have blackjack and other table games), it would allow South Florida horse tracks, dog tracks and jai-alai frontons to offer blackjack (capped at $15 max bet per hand) and adds slot machines at the Palm Beach Kennel Club. There’s also mention of a referendum to allow one more slot permit in Miami-Dade.

If no new compact is reached, the state will try to stop the blackjack and card games the Seminoles currently run, but the Seminoles will fight to keep them. Both sides have filed lawsuits, so the issue will be duked out in court.

Here are seven keys to understanding what’s happening:

1. Any move to change gambling regulations in the state is is always complicated, essentially a five-way puzzle that must please the following stakeholders: 

  • The Seminoles, who led the movement for tribes to operate casinos on sovereign land, and want to protect their own interests
  • The parimutuels, i.e. the racetrack casinos (sometimes called racinos), meaning jai-lai frontons, horse tracks, and dog tracks. Law requires them to offer racing in order to be able to offer slots. (Side note: many see animal racing as cruel and outdated and hope for “decoupling” so that betting can continue without the animals)  They cry that they want equality, or parity with the tribes.
  • The state, which is looking to fill its coffers
  • North Florida racetracks, which claim they are disadvantaged because only Broward and Miami-Dade are allowed slots, per a constitutional amendment that was passed by voters in 2004.
  •  Gambling opponents, or people morally opposed to gambling on the grounds that it takes advantage of the poor and functions essentially as a regressive tax.

2. Regarding Scott’s proposal, already:

  • The pari-mutuels are complaining that the Seminoles get too much.
  • Those opposed to gambling say it expands gambling too much.
  • Some northern counties complain that they are being cut out of the opportunity to have slots.

3. The tribe has to have SOMETHING above and beyond everyone else, per federal law, to have a compact.
The Indian Gaming Regulatory Act, established in 1988, helped set a path for how tribes and states work out gambling. IGRA states that tribes can offer the same games that the rest of area can offer, without paying taxes. The only way the state can garner money from the tribe is to allow something above and beyond the norm. And the federal government must approve such agreements, called compacts, to ensure they are on the up and up. That’s why those crying for a “level playing field” will never get it. All they can hope for is a level-er playing field.

4. The Seminoles make the most money from their casino in Tampa.
You think the Seminole Hard Rock Hotel & Casino in Hollywood does big business? Go to their Hard Rock in Tampa, which has no competition. With the next-closest slots location being the Seminoles’ own casino in Immokalee, the Tampa monstrosity is the fourth-largest casino in the United States, where revenues surpass $880 million per year. The Hollywood Hard Rock, with two other Seminole casinos and the pari-mutuels nibbling at business, makes “only” about $550 million. Tampa is their true cash cow. That’s why they don’t want competition in North or Central Florida.

5. The Seminoles didn’t propose expansion beyond their craps and roulette; the state did.
Critics of Scott’s proposed compact blame the Seminoles for the expansions of gambling that are built into it, but Seminole Gaming CEO James Allen pointed out at a conference earlier this month that the tribe’s offer was $3 billion, and in exchange it only asked for adding craps and roulette at its sites. “The Seminole tribe is not a proponent of this perceived huge expansion in the state,” Allen said. It was Gov. Scott and state legislators who threw in some other details — permitting blackjack in South Florida, slots in Palm Beach County, etc. (though those will have to approved via a separate bill) — so that they could appease other parties and cobble together enough support to pass the compact.  These exceptions “that gives the state tremendous flexibility in the future,” Allen said, continuing

6. Genting is still in play.
That clause about “one more gambling permit in Miami-Dade”? That will go up for bid, and some wags are suggesting that’s a way for Genting Group, the Malaysian gambling giant that bought The Miami Herald’s famous property on Biscayne Bay, to still get into the game. In 2011, Genting bought the Herald building and planned to build a massive resort and casino. Those plans were ditched, though, after lawmakers refused to rewrite gambling laws, and the company hasn’t disclosed alternate plans for the site. Speculators figured that the company was holding out hope that laws would change in its favor.  But even the compact were to pass and Genting win the permit to operate, don’t look for that giant structure the company first proposed; the bill cites a 750-slot limit. That’s about what the racinos in South Florida offer.

7. If a Gretna court case goes through, this all could be moot.

The Florida Supreme Court is hearing a case in July that could puncture this whole thing. Gretna Racing, based in upper northwest Florida, is arguing that it should be allowed to have slots because local voters approved it via a referendum. They point to language in a bill that carved out slots for Hialeah Park, which was not one of the original racetrack casinos approved for slots in 2008. If Gretna gets slots, five other Florida counties that also approved referenda also would have copycat suits – and that sure would wipe out the Seminoles’ exclusivity outside of South Florida. The compact would blow up, and legislators and Scott would have to go back to the drawing board.

Get daily gambling news at SouthFloridaGambling.com.

By Nick Sortal, SouthFloridaReporter.com, Feb. 1, 2016 

Nick Sortal is semi-retired after 35 years as a newspaper writer and editor, with 30 of those years dedicated to the South Florida Sun-Sentinel. He spent the majority of his career as a community news writer and editor, delving into the issues and topics most newsworthy to local residents. He has a reputation for being fair – weighing every sides of an issue – and checked and re-checked information almost to the point of being annoying