Florida: Crist moves bill to Seminoles' court

Sings bill involving slots at racetracks and tribal gaming.

Florida Gov. Charlie Crist signed a gaming bill June 15 that contains several changes sought by the state’s Thoroughbred industry and some changes in the operations of the Seminole Tribe of Florida’s casinos.

The Florida Legislature passed the bill May 8.

If the bill becomes law, based on approvals that include the Seminoles, the state tax rate on slot machine revenue would be reduced from 50% to 35% at Gulfstream Park’s casino and at a casino Calder Race Course plans to open in January 2010.

The bill also authorizes a not-for-profit Thoroughbred meet for the Ocala Breeders’ Sales Co. In addition, it would enable now-closed Hialeah Park to use a new Quarter Horse permit as a route to resume Thoroughbred racing.

Following Crist’s signing, the Thoroughbred industry as well as virtually the entire Florida business community are waiting to see if the Seminoles will request any changes.

Barry Richard, an attorney who represents the Seminoles, said June 15 that his legal opinion is the bill would need to be revised for it to be in compliance with federal laws on Indian gaming.

He noted that those laws permit an Indian tribe to pay a portion of gaming revenue to a state only if has exclusivity on a gaming product in the state.

The bill passed in May gives the Seminoles the exclusive Florida right-to blackjack and baccarat at four of their seven casinos. But it also holds out the option for the legislature in future years and later local voters to permit those games at some Thoroughbred tracks and other pari-mutuel facilities

Richard added he feels that resolving the exclusivity issue "is not an insurmountable obstacle."

"I am hopeful (on negotiations)," said Richard, a partner in the Tallahassee, Fla., office of Greenberg Traurig. "I think the legislature, the governor, and the tribe are closer than ever before in terms of the overall issue of a gaming compact."

Crist and the Seminoles have until Aug. 31 to sign a gaming compact for the tribe. They will use the bill as a basic document in negotiations. That compact would cover Seminole operations and not any operations of pari-mutuels.

Then, the legislature would have a special session to approve or reject the compact agreed to by the Seminoles and Crist. A rejection of that compact would nullify passage of the entire 2009 gaming bill.

In addition, the U.S. Department of Interior must approve a Seminole gaming compact.

If all approvals are obtained, the bill’s provisions likely would become effective late this year.

"I am talking with them (Seminoles) on a regular basis, and the bottom line I see is that they want a compact," said Marc Dunbar, an attorney representing Gulfstream Park and its parent, Magna Entertainment Corp.

"They may want to deviate a bit from what is in the bill," said Dunbar, a partner in the Pennington firm in Tallahassee. "If the deviation is radical, they may have trouble getting enough votes (in the special session)."

Richard said the Seminoles are "prepared to start meeting with Gov. Crist at any time."

He added that "it would make sense" if some leaders of the legislature are in meetings."

In November 2007, Crist and the Seminoles signed a compact that allowed the tribe to upgrade from class II bingo like slot machines to class III Las Vegas slots and gave them exclusive rights to blackjack and baccarat in the state. They also agreed to make their first payments from gaming revenue to the state--starting at $100 millio--in 2008. The legislature was not part of those negotiations.

Without a compact, the Seminoles would have been able to upgrade their slot machines without paying the state any revenue.

In July 2008, the Supreme Court of Florida, ruling in a suit filed by the Florida House, overturned the compact. The Court ruled Crist exceeded his authority in approving a form of gambling, blackjack, and baccarat that is not legal in Florida.

The Seminoles have continued to have blackjack at three casinos.

The bill passed May 8 allows the tribe to have Las Vegas slots at all casinos. It raises the annual minimum state payment from $100 million to $150 million. The $150 million payment would be less than 15% of annual Seminole gaming revenue, according to some third-party estimates.

Dunbar said this year’s bill would provide the pari-mutuel industry some help in competition that has been "out of balance" in favor of the Seminoles.

If a gaming law is not passed this year, Gulfstream, Calder, harness track Isle Casino, and Racing at Pompano Park and Greyhound track Mardi Race Track and gaming would need to wait at least until late 2010 for a 35% state tax rate on slot machines.

"If we cannot get the lower rate, it will be difficult to sustain operating a casino under current economic circumstances," Dunbar said.

In upcoming negotiations, he said he is hopeful any changes the Seminoles seek in negotiating a compact will be balanced by changes that favor the pari-mutuel industry.