Florida Tribal Pact Brings Petition

A Florida slot-machine compact has triggered action by lawmakers.

by James Freer

The Florida House of Representatives asked the state Supreme Court Nov. 19 to prevent Gov. Charlie Crist from implementing a Class III slot-machine deal with the Seminole Tribe of Florida without the legislature's approval.

The House's petition maintains the agreement violates the Florida constitution’s separation-of-powers clause and encroaches on the legislature’s law and policy-making authority.

On Nov. 14, Crist and the Seminoles signed a compact that would permit the tribe to upgrade from Class II bingo-like machines to Class III Las Vegas-style machines at its seven Florida casinos. Three of those casinos are in Broward County, home of Gulfstream Park and two other pari-mutuel facilities that have Class III slots under a referendum Broward voters passed in March 2005.

The 25-year agreement would give the Seminoles exclusive rights to blackjack and baccarat at casinos in Florida. It calls for the Seminoles to pay the state at least $100 million a year from net gaming revenue.

Indian Gaming Industry Report estimates the Seminoles and the Miccosukee Tribe generated a combined $1.56 billion in Florida gaming revenue last year. That estimate is based on data from tribal casinos in several other states and financial reports issued by the Seminoles.

The United States Department of the Interior had given Florida a Nov. 15 deadline to sign a compact with the Seminoles. Otherwise, the Seminoles and Miccosukee tribe were eligible under a federal law for Class III slots without taxes because other Florida sites—namely the Broward pari-mutuel facilities—had those machines. The Miccosukee tribe has a casino in Miami-Dade County.

The Interior Department has until Dec. 28 to review the compact. Thus, even if the Florida Supreme Court does not rule in favor of the legislature, the tribes probably would not install Class III machines until next spring.

Under the agreement, Florida would use tribal gaming revenues for education programs around the state. The tax rate is considerably less than the 50% of win per machine Gulfstream, Isle of Capri Casino at Pompano Park, and Mardi Gras Gaming and Racing Center pay to the state.

Calder Race Course, Flagler Dog Track, and Miami Jai-Alai would pay the same 50% tax if Miami-Dade County voters on Jan. 29 approve Class III slots for their pari-mutuel facilities.

The prospect of more slots competition at a lower tax rate comes as Gulfstream is trying to improve slots revenue parent company Magna Entertainment Corp. called “disappointing” in several recent Securities Exchange Commission filings and analyst calls.

Since Nov. 14, there have been rumors South Florida pari-mutuel outlets might sue to prevent the Seminoles from installing Class III slots under their agreement with Crist.

“We will let the (House) speaker’s suit follow its course, and until then we won’t have comment,” Gulfstream spokesman Mike Mullaney said.

“I think the compact went a little too far on the exclusivity (the Seminoles) would have and not far enough on what tax they would pay,” said Barbara Havenick, chief executive officer of Flagler in Miami.

Havenick declined to comment on whether the tracks are considering legal action on the Seminole compact.

Calder and Flagler are partners in “Yes for a Greater Miami-Dade,” a campaign committee for the Jan. 29 vote on slots at pari-mutuels.

Havenick said the prospect of Class III slots at tribal casinos strengthens the case “that we need additional forms of entertainment.”

The House suit noted that five other states’ high courts, in suits filed by legislatures, have ruled that “a governor may not unilaterally bind a state to a gaming compact” with Indian tribes.

“We are reviewing the petition to determine our best course of action,” Crist said in a statement. “I am disappointed that the actions taken today may delay additional dollars to education.”