Gulfstream Urges Legal Action on Tribe

Gulfstream Urges Legal Action on Tribe
Photo: Coglianese Photos

Gulfstream Park on Dec. 18 asked the Supreme Court of Florida to issue an order that would give law enforcement officials authority to shut down blackjack and baccarat tables at the Seminole Tribe of Florida’s casinos in the state.
 
In the court filing, Gulfstream said those card games are illegal and are having a severe impact on its operations and “on Florida’s horse industry.”
 
Gulfstream in Hallandale Beach, Fla., is 10 miles from the Seminole Hard Rock Hotel & Casino in Hollywood. In June 2008, the Seminole Hard Rock became the first Florida casino to operate blackjack and baccarat tables. The Seminoles also began offering those games at their Tampa casino in November 2008 and at their Immokalee, Fla., casino in December 2008--even though the Florida Supreme Court had ruled they are illegal in the state.
 
In a separate action on Dec. 18, Florida Attorney General Bill McCollum asked the U.S. Attorney’s Office in Tampa “to initiate a criminal prosecution to put an end to the calculated illegal expansion of class III gaming by the (Seminole) Tribe.” The U.S. Attorney’s Tampa district includes the Seminole casinos in Tampa and Immokalee.
 
Gulfstream and McCollum are seeking those actions while Gulfstream and other pari-mutuels in South Florida are launching new campaigns to gain lower state tax rates on their slot machines.
 
The Seminoles’ Tampa casino competes for gaming dollars with Tampa Bay Downs, which is not permitted to have a casino. Calder Race Course, which has said it plans to build a casino, competes with the Seminole Hard Rock for gaming dollars.
 
The Seminoles are operating blackjack and baccarat tables despite the Florida Supreme Court’s July 3, 2008 ruling that Florida Gov. Charlie Crist exceeded his authority by authorizing those games. On Sept. 11, the Court denied Crist’s request for a rehearing, thus upholding its ruling that the governor alone cannot approve an expansion of gambling.
 
Because Indian Tribes are sovereign nations under U.S. laws, casinos on their lands are subject to the federal Indian Regulatory Gaming Act. Thus, the Florida Attorney General does not have authority to take legal action to halt the Seminoles new table games.
 
McCollum has asked the National Indian Gaming Commission, which regulates Tribal gaming, to ask the federal government to halt the Seminoles’ blackjack and baccarat games. On Dec. 18, a spokesman for the National Indian Gaming Commission told The Miami Herald that his agency is still studying the Supreme Court of Florida’s decision.
 
Barry Richard, an attorney who represents the Seminoles, told that newspaper that he believes the Tribe’s recent gaming expansion is legal and that there is no reason for prosecution.
 
In November 2007, the Florida House of Representatives filed its suit asking the Supreme Court to overturn the Crist-Seminoles compact. Gulfstream filed an americus brief, supporting the Florida House. In its Dec. 18 filing, Gulfstream said that the court in its July and September rulings left open its ability to issue a “writ of quo warranty” that would authorize a shutdown of Seminole blackjack and baccarat.
 
Marc Dunbar, an attorney who represents Gulfstream, noted that the court in its July ruling said it was withholding that writ because it expected the parties would comply.
 
“This illegal activity has been going on for five months and they (Seminoles) are expanding it,” said Dunbar, a partner in the Pennington Law Firm in Tallahassee. “We feel that action is needed.”
 
Dunbar said the issuing of a writ of quo warranty would enable the Supreme Court to order Florida law enforcement officials to halt the Seminoles’ blackjack and baccarat games. Or, he said, the writ would enable Gulfstream or other parties to obtain an order for such a shutdown.
 
However, such requests could lead to court challenges by the Seminoles.
 
Meanwhile, there is a widespread view that federal or state courts would not be able to halt the now-entrenched Seminole games. That view has heightened the question of whether the Florida Legislature, which begins its 2009 session on March 9, will work with Crist to pass a revised version of his Seminole compact.
 
Gulfstream is scheduled to open its racing season on Jan. 3. It has a casino with  Class III Las Vegas-style slot machines. This year, the Seminoles under their pact with Crist, have installed Class III machines at four casinos. They previously had Class II bingo-like machines.
 
Dunbar said the Seminoles’ new table games have expanded the “un-level playing field” the Tribe has over Gulfstream and the casinos at harness track Isle Racing & Casino at Pompano Park and Greyhound track Mardi Gras Race Track and Gaming.
 
Those casinos in Broward County and pari-mutuel casinos being planned in adjacent Miami-Dade County pay a state tax of 50% of net slot machine revenues.
 
Under the pact with Crist, the Seminoles are making their first payments of gaming revenues to the state. Their 2008 payment, now held in escrow accounts, will be $100 million. Some industry analysts estimate that is less than 10% of annual Seminole Gaming revenues.
 
Data from the Florida Division of Pari-Mutuel Wagering show that Gulfstream is only pari-mutuel casino that expanded its slot revenues during the five months ended Nov. 30, 2008. Gulfstream grew those revenues from $13.8 million during those five months in 2007 to $15.2 million during that period this year. Gulfstream’s slot revenues remain lower than those at Isle and Mardi Gras.
 
Officials at Gulfstream have said that a better mix of machines and increased promotions have been helping its slots operation.  But Dunbar said the increase would have been greater if not for increased completion from the Seminoles.
 
Meanwhile, combined slots revenues at the three Broward racetracks fell 13% during the July-November period. Those tracks and casinos are dealing with a slumping economy, as well as Seminole competition.

On Dec. 15, Calder and four other pari-mutuel entities announced formation of the South Florida Gaming Coalition. That group will lobby for changes that could include reducing the tax rate on racetrack slot machines, adding tax incentives related to those machines, and other measures that would produce what they consider fair competition with the Seminole casinos.

Gulfstream shares those goals. But Dunbar said it is not a member of thecoalition partly because it believes a first priority should be gaining a tax deduction on slots revenue pari-mutuel facilities contribute to horsemen and counterpart  groups. Gulfstream pays 7.5% of slots revenue to Florida horsemen--by far the largest payment in Florida.

Gulfstream wants to make sure a level playing field exists among the pari-mutuel facilities as well as with the Tribal casinos, Dunbar said.

The South Florida Gaming Coalition is not commenting on Gulfstream not being a member, said Sarah Bascom, a spokeswoman for that group.
 

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