Deadline Looms for Florida Gaming

Gaming compact between State and the Seminole Tribe nears Aug. 31 dealine

Florida Gov. Charlie Crist and the Seminole Tribe of Florida are nearing their Aug. 31 deadline to approve a Gaming Compact, which would trigger a new law that would provide economic benefits for the state’s Thoroughbred industry and for that tribe’s casinos.

On Aug. 28, Rep. Bill Galvano (R-Bradenton), the Florida legislature’s point man on gaming issues, and Marc Dunbar, a lobbyist for Gulfstream Park and its parent Magna Entertainment Corp., said they are optimistic the Seminoles would agree to a compact by the deadline.

Dunbar, a partner in The Pennington Law Firm in Tallahassee, also is optimistic that an agreement between Crist and the Seminoles would not make major changes to a gaming law the legislatue approved last May and Crist signed in June.

On Aug. 28, Dunbar said there were indications that these Thoroughbred-related provisions of the law would remain intact.

*It would lower the state tax rate from 50% to 35% at pari-mutuels’ casinos in the southeast Florida counties of Miami-Dade and Broward. Gulfstream has a casino with Class III, Las-Vegas style slot machines and Calder Race Course plans to open a casino with those machines in January 2010.

* It would allow now-closed Hialeah Park to resume Thoroughbred racing on a limited basis, utilizing a Quarter Horse permit it was issued last March by the Florida Division of Pari-Mutuel Wagering. Within two years of re-opening, Hialeah would be eligible for a casino.
* It authorizes a not-for-profit Thoroughbred meet for the Ocala Breeders’ Sales Co.

A summary of the Seminoles’ proposed changes, obtained from Galvano’s office, showed they are not proposing to change those provisions.

The Seminoles’ major proposed change would authorize black jack and baccarat at all seven of their Florida casinos. The 2009 law permits those games at only four of their casinos. Under that law and under the Seminoles’ proposed change, they would have exclusive rights to the two table games in Florida.

The text of the 2009 law stipulates that its terms would take effect only if the legislature agrees to a compact with the Seminoles.  Without such a compact, the state would have no guarantee the Seminoles would keep paying it a portion of their gaming revenues--a process they began last year with annual minimums of $100 million.

“If there is no compact signed by midnight Aug. 31, everything would have to wait until the legislature holds its regular session next month,” Dunbar said. “The process would have to start all over.”

Galvano, chairman of the House Select Committee on Seminole Compact Review, said: “I am confident that a compact will be entered into between the governor and the Tribe, and I am optimistic it will be along lines that are acceptable to the Legislature.”

A staff aide said Galvano does not want to speculate on whether the Seminoles’ proposed changes on table games and several proposals on their operations, would become part of a compact and of an amended gaming law.  They are seeking less state oversight of their casinos than oversight mandated by the new law.

The proposal for new table games at all Seminole casinos loomed as the biggest potential stumbling block toward getting the legislature to approve a Crist-Seminoles deal.

According to the Aug. 29 Miami Herald, Galvano and some other legislative leaders would support that change only if slot machines are authorized for several counties in addition to Miami-Dade and Broward.

With the Aug. 31 deadline approaching, the legislature, the Seminoles and the pari-mutuel industry have a choice of reaching a compromise or giving up the gains all would receive from the 2009 law.The new law would raise the Seminoles’ annual minimum payment to $150 million, with payments rising based on gaming revenues. They are not objecting to that increase.

Money the Seminoles pay to Florida is used for education programs around Florida. The state taxes that pari-mutuels pay on slot machines also are used for education statewide.

If Crist and the Seminoles sign a compact, the legislature will hold a special session in September or October to consider it.

If the legislature approves an amended law that is consistent with the compact, the compact would need approval by the U.S. Department of the Interior which has oversight of Tribal gaming.

Those steps would give the Seminoles their desired state and federal approvals of new table games, as well as their Las Vegas-style slots.

If all approvals take place, the law’s provisions would take effect immediately--probably by the end of this year.

A Calder official said the track and its parent Churchill Downs Inc. have a policy of not commenting on pending legislation or related matters.

Dunbar said Gulfstream would gain significant benefits, starting immediately, from a lower tax on slot machines. In addition to helping increase after-tax revenues from those machines, he said a lower rate would enable Gulfstream  to spend more on marketing and thus bring in more slots play.

Magna has been under Chapter 11 bankruptcy protection since last March and is attempting to sell several of its race tracks.

“If all else is sold, the one Frank (Magna Chairman Frank Stronach)  will hold on to is Gulfstream,” Dunbar said. “Frank’s heart beats at Gulfstream.”

The 2009 law also has a boost for the poker rooms at Gulfstream and other Florida Thoroughbred, harness and Greyhound tracks and jai-alai frontons. It would raise limits on bets from $5 to $50 and expand their daily hours from 12 to 18 on weekdays and 24 on weekends.

Tampa Bay Downs would participate in that poker expansion, but would not have other immediate gains from the 2009 law.

This year, some legislators proposed permitting pari-mutuels outside Miami-Dade and Broward to have Class II bingo-like slot machines--which are less sophisticated than Las Vegas machines.Instead, the law authorizes referendums in which a county’s voters could approve those machines.

The Seminoles are proposing a series of reductions in gaming revenues they pay the state if any pari-mutuels outside Miami-Dade and Broward have slot machines.

Tampa Bay Downs competes with the Seminole Hard Rock Hotel and Casino in Tampa, which has Las Vegas-style slots, black jack and baccarat.Calder and Gulfstream compete with the Seminole Hard Rock Hotel and Casino in Hollywood, which also has Las Vegas-style slots and the two banked card games.