Senate Starts Moving On Florida Gambling Overhaul

January 26, 2017

With little discussion and virtually no debate, a Senate panel unanimously signed off Wednesday on a sweeping gambling plan proposed by one of the chamber’s most powerful members.

But while Sen. Bill Galvano’s proposal is on a speedy Senate track, the House is expected to take a much more conservative approach to a redesign of the state’s gambling footprint.

Galvano’s legislation would broadly expand the presence of slots in Florida, by allowing the machines at pari-mutuels in eight counties — Brevard, Duval, Gadsden, Hamilton, Lee, Palm Beach, St. Lucie and Washington — where voters have approved them. Galvano, who is slated to become Senate president after the 2018 elections, is also proposing another slot-machine license each in Miami-Dade and Broward counties.

The bill (SB 8) would also allow jai alai operators, greyhound tracks and all but thoroughbred horse track operators to do away with live racing or games while still keeping more lucrative gambling activities like cardrooms or slots, a process known as “decoupling.”

The measure, if passed, would only go into effect if lawmakers also approve a new gambling agreement, called a “compact,” with the Seminole Tribe of Florida, Galvano told the Senate Regulated Industries Committee during an explanation of the 112-page bill Wednesday.

Lawmakers are again considering broad gambling legislation as House and Senate leaders work with Gov. Rick Scott’s administration to hash out a new compact with the tribe.

The negotiations come after a portion of a 20-year compact expired in 2015. That portion gave the tribe the exclusive rights to operate “banked” card games such as blackjack.

Despite the expiration, a federal judge ruled in November that the Seminoles could continue to offer blackjack because the state had breached the agreement by permitting controversial “designated player” games at pari-mutuel cardrooms. U.S. District Judge Robert Hinkle ruled that the designated player games violate a state law prohibiting games in which players bet against the house.

Galvano’s soup-to-nuts proposal, which would legalize the designated player games, would also resolve litigation awaiting a decision from the Florida Supreme Court. The lawsuit, filed by Gretna Racing, is focused on whether gambling operators can add slots if county voters give the go-ahead, even without the express permission of the Legislature.

Galvano told the Senate committee Wednesday that his plan would inject certainty “in a dubious marketplace” by “creating funding opportunities,” spurring economic development and resolving litigation.

The Senate plan would also establish regulations for the fantasy sports industry, requiring an initial $500,000 licensure fee and an annual $100,000 renewal fee for major operators like FanDuel and DraftKings. Questions have been raised in other states about whether fantasy sports are a form of illegal gambling.

“This bill, if it were to pass unchanged and I cannot in good faith tell you that unless we’re playing fantasy amusement, but the gross impact on our annual budget would be $450 million, the net impact would be $375 (million),” Galvano told the committee. “It’s a significant dollar amount, but again it is a comprehensive approach to move us forward on the journey with the tribe … and (gaming) interests.”

The bill addresses “gaming and all of its components comprehensively” and “has been designed purposely so that the interest of each is ultimately dependent on the interests of others,” he said.

“We have a very comprehensive bill here. I believe it is a solid vehicle to move forward. But this type of legislation is very unique. Unlike most legislation where you have a back and forth with your counterparts and you’re seeking the approval of your governor, we have injected into this a sovereign (Seminole) nation,” he said, referring to the gambling deal as a game of “three-dimensional chess.”

Industry insiders have referred to Galvano’s bill as a “Christmas tree” for pari-mutuel operators, but he rejected the notion that his plan is an industry wish list.

“These are not issues that we just came up with,” Galvano, R-Bradenton, told reporters after the meeting. “These are all issues that were pursued and discussed in committees. They are a reality for the tribe and the House to contend with if we are going to get resolution.”

Unlike the Senate bill, the House could focus on shrinking the state’s gambling operations.

“The House bill will be a conservative approach to gaming that will put contraction front and center. But the details are still being worked out,” House Commerce Committee Chairman Jose Felix Diaz, R-Miami, said in a telephone interview Wednesday.

Galvano — who, as a House member, was instrumental in crafting the 20-year compact with the Seminoles — and Diaz are the Legislature’s chief negotiators with the tribe and the governor’s office after lawmakers failed to give the requisite approval last year to a deal struck by Scott.

“The compact that was executed last year is no longer the starting place for either chamber,” Diaz said.

Instead, both the House and Senate are crafting bills that lay out parameters for “how the compact should look,” he explained.

“We’re now spending time fleshing out the details of the two proposals to see if we can get to a realistic, passable bill,” Diaz said.

Galvano said the tribe is aware of his bill, and he expects to receive input from the Seminoles — who have paid the state more than $120 million even after the banked card games portion of the compact expired — soon.

“We all want to get something done,” he said.

by Dara Kam, The News Service of Florida

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Written by William Reynolds · Filed Under News