Crist, Seminoles have deal to expand gaming
Josh Hafenbrack
Tallahassee Bureau
© 2009 South Florida Sun-Sentinel.com
Monday PM, August 31, 2009
TALLAHASSEE: Gov. Charlie Crist has signed a retooled gambling deal with the Seminole tribe today, arguing it promises a $6.8 billion windfall for the state over two decades. But now the deal will have to go before wary legislators, who spotted "red flags" in the agreement moments after it was released.
In a significant expansion of the terms proposed by the Legislature in the spring, the tribe would get the right to operate blackjack and baccarat tables at all seven of its resorts -- not just those in Broward and Hillsborough counties.
And the compact would help lock the tribe's competitors out of the casino business: If any pari-mutuel facilities got table games or slots, even less lucrative bingo-style slots, the tribe's payments to the state would cease.
Under the terms, the tribe would pay the state at least $150 million for 20 years, plus a cut of the profits as its gambling revenues grow. Projections from the governor's office show the annual payments to the state would grow to $500 million in 20 years. Those figures are based on strong early growth rates, as the tribe adds gambling games and builds new hotels, and then 3 percent annual growth in later years.
The tribe would continue to operate blackjack, baccarat and Vegas-style slot machines at casinos in Hollywood, Tampa and Immokalee and have the option to add them at four other facilities. The Seminoles have been operating under a 2007 deal signed with Crist, which has since been voided by the state Supreme Court.
"This compact provides a significant financial benefit to the people of Florida, and enables the state to invest in the future of Florida's children," Crist said in a letter, dated today, to Seminole representatives. Now, the question is whether the Legislature will sign off.
The Legislature's point man on the Seminole gambling issue, Rep. Bill Galvano, said the new pact raises "red flags" even though he said it contains some positives, like the annual payments.
Lawmakers are weighing a special session perhaps for early October -- when they'll be in Tallahassee anyway for committee hearings -- to either approve or reject the new terms.
"One (red flag) is the expansion (of blackjack) to the seven faculties," said Galvano, R-Bradenton. Limiting the ability of pari-mutuels to get new games is "obviously an issue. It would mean that (pari-mutuels) have no opportunity to have anything beyond what they're currently offering. That's going to be tough on them....That's something we'll have to deal with as a Legislature."
"We really want to take the time to digest it," he added.
The compact gives the tribe "exclusive" rights to blackjack and slots, but that doesn't apply to Broward and Miami-Dade counties, which already have voter-approved slot machines. Galvano tried to get Palm Beach County added to the list of counties that could get slots and blackjack, but was unsuccessful.
Big money is at stake. The tribe has already poured $162.5 million into a bank account since signing the 2007 pact. The state could access those funds if the Legislature signs off on the governor and tribe's new deal.
On the other hand, the state's $1.3 billion pari-mutuel industry already is struggling to compete with Indian resorts.
Curbing the ability of pari-mutuel sites to expand their operations might run them out of business and turn into a bad deal for the state, said Sen. Dennis Jones, R-Seminole, chairman of the Senate Regulated Industries Committee.
"The Seminoles, they got a sweetheart deal, they ought to sign it and run as fast as they can go," Jones said of the terms legislators proposed in May. "As far as being interested in doing any major rewrites, I don't see any interest in doing that in the Senate or in the House. I could be wrong, but that's what I see."
Senate President Jeff Atwater, R-North Palm Beach, and House Speaker Larry Cretul, R-Ocala, said they've received the new compact and will begin an exhaustive review.
The pari-mutuel industry also has a major stake in the outcome. The compact includes financial sweeteners for the state's struggling tracks and jai-alai frontons, including the right to offer high-stakes poker games, expanded card room hours and lower taxes on slot machine revenues.
Seminoles, Crist agree to gambling pact
By Mary Ellen Klas
Herald/Times Tallahassee Bureau
© 2009 Miami Herald
Monday PM, August 31, 2009
Tallahassee: Gov. Charlie Crist and the Seminole Indians on Monday signed a new gambling agreement to allow the tribe to keep its slot machines and black jack games at the tribe's Florida casinos in exchange for $150 million a year in payments to the state. The deal came down to the wire on the final day of the legislatively-imposed deadline as Crist and the tribe's chief officials signed the proposed 20-year compact behind close doors.
The governor is expected to call a special session for October to ask legislators to sign off on the pact. But because it fails to meet many of the conditions sought by lawmakers to protect the state's parimutuel industry, it could be rejected and the governor would have to start over again.
"There are some concerns," said Rep. Bill Galvano, R-Bradenton, the House's lead negotiator in the gambling negotiations.
Among the "red flags," he cited:
• The tribe will operate black jack and other banked card games at all seven of its casinos, instead of the three in Broward and Tampa as lawmakers had wanted.
• The tribe would have exclusive operation of slot machines outside of Miami-Dade and Broward. Lawmakers wanted to leave the door open for those games in horse and dog tracks 100 miles away from the tribe's casinos.
Crist said Monday evening in a statement that the deal will be financially beneficial to the state. He stated he had negotiated the deal "in good faith'' and that will reap financial benefit to the state.
"The revenue sharing between the Tribe and the State will enable the State of Florida to invest in the future of Florida’s children," he said. ‘‘I look forward to working with Chairman Bill Galvano and the Florida Legislature to ratify this important compact."
The signed compact eliminates the possibility, however, that the tribe continues to operate its games illegally, therefore buying both the tribe and Crist time to find an accord that could meet legislative approval.
Watching closely for the final agreement were the state's horse and dog tracks and jai alai frontons which were given unlimited poker games and lower tax rates on slot machines if the gambling compact with the tribe is signed and ratified.
Under the deal, which would amount to at least $6.8 billion over 20 years, the tribe would pay the state a minimum of $12.5 million a month for 30 months, or $375 million. That is lower than the original compact signed by Crist last year which would have guaranteed the state $500 million in the first three years.
Last week, the governor and the tribe agreed to a plan to pay the state $150 million a year in exchange for operating the games at all seven of its casinos. But that went further than the guidelines set out by the Legislature, which authorized the card games only at the tribe's Hard Rock casinos in Hollywood and Tampa and its two other casinos in Broward.
Galvano, in consultantion with Senate President Jeff Atwater, last week conceded to giving the tribe card games at its Immokalee casino but in turn wanted to allow for the prospect of casino games to be offered in Palm Beach County, Jacksonville and North Florida if legislators or voters approved them.
The change was seen as a way to help the Palm Beach County Kennel Club, which has long sought slot machines, seek a referendum.
Atwater, a Republican, is from North Palm Beach.
But the Seminole's tribal council rejected that provision and went back to its original plan.
The tribe, however, agreed to a major concession that opens the door to allowing casinos in Miami-Dade and Broward get the same black jack games now offered at the tribe's Hard Rock casinos.
Under the plan, if any of the seven existing casinos, including Hialeah race track, expand beyond slot machines to offer the banked card games now offered by the tribe, the tribe will reduce its revenue share to the state but only the portion from Broward County and only if its net win is below what it made the previous year.
In that case, it will reduce the share of its payment to the state from its Broward facilites by 50 percent.
The tribe, however, won a major concession from the governor, too.
Instead of relying on the state agency that currently regulates gambling -- the Department of Business and Professional Regulation -- the agency that will have oversight of its operations would be the Department of Revenue which has no experience with gambling oversight.
Atwater said lawmakers are reviewing the proposal to determine what the next course of action will be.
"This is a complex issue and I applaud the diligent effort put forth by the Governor's office and Seminole Tribe," he said in a statement.