Senators Raise Questions On Florida Gambling Deal

January 21, 2016

An aide to Gov. Rick Scott got a bipartisan grilling about a proposed $3 billion gambling deal with the Seminole Tribe, but the head of a Senate committee said Wednesday that the agreement may not get a vote before the 2016 legislative session ends in March.

Wednesday’s Senate Regulated Industries Committee meeting was the first public vetting of the deal, called a “compact,” since Scott and tribal leader James Billie signed it on Dec. 7.

The compact would allow the Seminoles to add craps and roulette to their casino operations in exchange for $3 billion in guaranteed payments to the state over seven years.

The compact also would permit, but does not authorize, slot machines in Palm Beach County and at a new facility in Miami-Dade County, limited blackjack at pari-mutuels in Broward and Miami-Dade counties and possibly doing away with horse and dog racing altogether while allowing pari-mutuels to maintain cardroom or slot-machine operations, a concept known as “decoupling.”

House and Senate leaders have said that the compact would have to be tweaked to get needed approval from the Legislature, which was evidenced by pointed questions from several members of the Regulated Industries Committee on Wednesday.

Sen. Jack Latvala, R-Clearwater, raised concerns about the expansion of slot machines in Palm Beach County, one of six counties where voters have approved slots at local pari-mutuels. Latvala wanted to know why the other five counties were ignored.

“So regardless of the fact that Lee, Gadsden, Washington, Hamilton and Brevard have voted to allow slot machines, basically this compact you’ve negotiated said no, we don’t care. You’ve taken care of Palm Beach, but you haven’t taken care of the other counties, is that correct?” Latvala asked Jeff Woodburn, Scott’s policy director.

Pari-mutuels in Broward and Miami-Dade counties, just south of Palm Beach, already have slots, something a current deal with the Seminoles allows. Federal law requires that tribes have “exclusivity” regarding some aspect of gambling in order to justify revenue-sharing agreements with states.

“The market already has the competition in that county area” and there is currently no exclusivity in South Florida, Woodburn said.

The Seminoles don’t want to allow slots outside of the two South Florida counties but agreed to add Palm Beach County at the state’s insistence, Seminole Gaming Chief Executive Officer Jim Allen told the committee.

“It’s not to say that one particular county is right or wrong,” Allen said. “When you address this question, we have to … understand the economics that go with a $3 billion guarantee.”

Adding too many exceptions to the tribe’s exclusive rights to operate slot machines could cause the U.S. Department of the Interior to reject the agreement, Allen said.

“When will they say we have crossed the line where we no longer have exclusivity and are paying a $3 billion revenue share?” he said.

Scott’s aides negotiated the new compact with the tribe after a portion of a 2010 deal giving the Seminoles exclusive rights to operate banked card games, such as blackjack, expired. The Seminoles have sued over the card games, accusing the state of acting in “bad faith” about negotiations on a new gambling deal. They’ve asked a judge to allow the tribe to keep offering the card games. The state also filed a lawsuit seeking to stop the games.

The tribe is also alleging that Florida violated the 2010 compact by allowing certain types of card games at the state’s pari-mutuels. The tribe would drop the lawsuit if the compact is passed, Allen said.

Two Miami-Dade County lawmakers were skeptical about elements permitted by the proposed compact.

Sen. Anitere Flores, R-Miami, objected to allowing the county’s pari-mutuels to add blackjack if voters approve the card games through a referendum. She pointed out that voters rejected slots in the county twice before finally voting in favor of the games.

She also rejected Woodburn’s contention that the compact would limit gambling in the state “when you offer a new license and the tribe is going to increase (gambling) by huge amounts.”

Unlike the current compact, the new deal would cap the number of slot machines, table games and live games — like craps and roulette — at the Seminole’s seven casinos, Woodburn said.

“Maybe it’s a cap, but it’s not limiting,” Flores said.

Sen. Gwen Margolis, D-Miami, said she was “disturbed” that the compact would allow another gambling operation in her county.

“This is a place that doesn’t need it,” she said. “You can’t move in traffic now and you can’t find a hotel room.”

Regulated Industries Chairman Rob Bradley, R-Fleming Island, joked that “we’ve got two ‘no’s” after Margolis and Flores were through.

“I would hate to dispute the chairman, but three,” Latvala retorted.

Scott’s deal with the Seminoles would deliver an additional $200 million to $413 million annually over eight years — up from the roughly $126 million a year the state receives under the 2010 agreement.

Wednesday’s hearing on the compact came a day after economists slashed next year’s overall projected state revenues by about $400 million. In response, Scott’s spokeswoman turned to the compact to help underwrite the governor’s priorities — $1 billion in tax cuts — although the extra money from the Seminoles wouldn’t be available until 2017.

Scott “remains confident” in his tax cut package despite the projected reduction in revenue because “recent estimates also show that if the Legislature chooses to adopt the Seminole compact the governor signed, it would bring in $2.3 billion over eight years,” his spokeswoman Jackie Schutz said in a statement Tuesday. The $2.3 billion number represents the increase over the amount raised through the expired compact.

Schutz’s comments weren’t lost on Bradley, the chairman of the Regulated Industries Committee, dubbed “Thunderdome” in homage to the on-screen arena for post-apocalyptic steel-cage brawls.

Bradley told reporters after the meeting that he hasn’t decided yet whether to put the compact into bill form yet.

Its future may rest in Scott’s hands, Bradley indicated.

Scott’s “involvement in this process is necessary if this is in fact going to become a reality,” he said.

The economic forecast Tuesday showing lower-than-expected state tax revenues may broaden the compact’s appeal for lawmakers as they craft the state’s budget, Bradley said.

“…Anything that can be impactful on the revenue side of the ledger, such as adding money from revenue sharing with the tribe, is a very important part of the discussion,” he said. “This all should be viewed through the lens of making the budget balance. I think that, as the revenue projections go down, it certainly does ratchet up pressure to take a serious look about whether we need these dollars in order to provide basic services.”

by Dara Kam, The News Service of Florida

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