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Judge: State Violated Seminole Gaming Deal

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Seminole Casino Coconut Creek Level 2 (Nick Sortal)The state of Florida’s misplay of allowing “designated player” games at racetrack card rooms has turned out to be quite fortuitous for the Seminole Tribe of Florida, but it also might provide the spark needed to goose along a long-term gambling deal statewide.

A U.S. judge ruled on Wednesday that that state violated terms of its deal with the Seminoles, which allowed the tribe exclusive rights to blackjack and other table games.

Judge Robert Hinkle ruled that when racetrack card rooms started their versions of Ultimate Texas Hold ‘em, 3-Card Poker and Texas Hold ‘em, 3-Card Poker those games cut into the $250 million annual monopoly the tribe negotiated with the state. The state has permitted banked card games since 2011, and formally approved them in 2014, Hinkle wrote.

Photo: Seminole Hard Rock Hotel & Casino
Blackjack
Photo: Seminole Hard Rock Hotel & Casino

When the compact was originally signed in 2010, the blackjack portion was for only five years. It expired in July 2015, and the Seminoles have filed suit saying the state has not negotiated in good faith.

“The order declares that the exception has been triggered — that the tribe may conduct banked card games for the compact’s 20-year term,” Hinkle wrote. For those lacking a calendar, that means blackjack until 2030.

Hinkle called the games, in which a player stands in for the bank, an “egregious example of the cardrooms’ attempt to evade the prohibition on banked card games.” They are offered in about half of Florida’s card rooms and take in an estimated $15 million of the state’s $147 million annual poker revenues.

The other point I always make is that in casinos outside of Florida, these games are not located in poker rooms, but in blackjack-like pits.

So now the Seminoles have big-time leverage with state. Blackjack is here to stay and the state isn’t going to be able to use the threat of pulling it as a bargaining chip.

“The Seminole Tribe is very pleased with Judge Hinkle’s ruling and is carefully reviewing it,” Seminole spokesman Gary Bitner said. “The Tribe believes the ruling provides for its future stability and ensures 3,600 Seminole Gaming employees will keep their jobs.”

Don’t look for an appeal. Hinkle’s ruling was carefully worded, and covered every point. It was almost as though he were trying to write an appeal-proof ruling, although state officials say they are reviewing it.

The Seminoles have paid the state a cut of blackjack revenues even since that agreement expired, but they could now threaten to stop doing that.

Florida Gov. Rick Scott meets with members of the Seminole Tribe to discuss the Gambling Compact
Florida Gov. Rick Scott meets with members of the Seminole Tribe to discuss the Gambling Compact

This whole thing means the state is motivated to sit down at the bargaining table, pronto. Florida Gov. Rick Scott last December had worked out a deal that would allow the Seminoles to add roulette and craps (and allow South Florida racetrack casinos to offer blackjack), but it did not get through the state legislature.

Sure, there’s still going to be a pocket of legislators who are anti-gaming, and they still might not budge. But others, who objected to the specific terms of Scott’s proposal, are more likely to hop on board. The Seminoles’ deal was for $3 billion over seven years.

Meanwhile, the Seminoles and the rest of the state are awaiting a ruling on a case based in northwest Florida, in which a Gadsden County card room is attempting to add slots based on a country referendum. Slots currently are allowed only in Miami-Dade and Broward counties, and only because of a 2004 statewide constitutional amendment that specified only those two counties.

Just over 50 percent of the state’s voters approved that narrow allowance. That ruling, too, could void part of the Seminoles’ compact because the tribe could easily argue that those slots would compromise their behemoth Hard Rock Tampa operation, which nets almost $1 billion annually.

In the ruling announced Wednesday, the Seminoles had also argued that the state violated the compact by allowing racetrack casinos to offer electronic forms of blackjack. Because he already declared the compact breached, Hinkle declined to rule on the electronic table games portion, calling the issue “close.”

My money is against the Seminoles on that one: Every U.S. jurisdiction that allows electronic table games classifies the machines as slot machines, because they operate via a random number generator. So Florida was simply following the pattern laid out everywhere else.

Nick Sortal, SouthFloridaGambling.com, posted on SouthFloridaReporter.com Nov. 13, 2016

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Nick Sortal is the Miami Herald's new gambling columnist and covered the openings, expansions, poker tournaments, entertainment and human interest facets of the industry for the South Florida Sun-Sentinel from 2007 until taking a buyout in November 2015. He also reports on gambling on his site, SouthFloridaGambling.com.