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Lawmakers move closer to gambling deal

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TALLAHASSEE, Fla. – After years of stalemate, House and Senate leaders appear to be closing in on a deal to revamp Florida's gambling industry and strike an agreement with the Seminole Tribe in what could be a considerable expansion of gambling throughout the state.

The House made what Sen. Bill Galvano, the Senate's chief negotiator on gambling issues, called a "substantial offer" Wednesday morning. The proposal moved toward the Senate's pari-mutuel industry friendly plan, as the May 5 end of the legislative session nears.

"We know that time is running out, so we wanted to make a serious and substantial offer to the Senate," Galvano's House counterpart, Rep. Jose Felix Diaz, said.

Until this week, the House had favored a status-quo approach that included few if any changes viewed favorably by the pari-mutuel industry. But the new proposal by the House included numerous concessions for the Seminole Tribe and pari-mutuel operators, including allowing the Seminoles to add craps and roulette at seven tribal casinos.

"It may look like little steps because we're so far apart to begin with ... But we feel like this puts us in a position where we could come towards the Senate position on a lot of things and retain the House position on a lot of things," Diaz said.

The House also backed down from its opposition to a process known as "decoupling," which would allow greyhound tracks and most horse tracks to do away with racing altogether while keeping more lucrative activities, such as slots and cardrooms.

Unlike the Senate's plan, the House proposal would require county voters to approve decoupling, something Galvano said he would consider.

The House also signed off on a new facility with slots and a cardroom in Miami-Dade County; the Senate had wanted a total of two new gambling facilities in Broward and/or Miami-Dade counties. Under the House offer, the facility would have to be at least five miles away from an existing pari-mutuel facility and would have to purchase at least one active pari-mutuel permit and give it back to the state.

And the House agreed to reduce the current 35 percent tax rate on slot machines at "racinos" in Miami-Dade and Broward counties, but only if the facilities reduce the maximum number of machines. Under current law, the racinos are allowed to have up to 2,000 slot machines per facility, but Diaz said none of the operators has more than 1,400.

The tax rate would drop to 25 percent for facilities that agree to a cap of 1,500 machines, and 30 percent for a maximum of 1,750 machines.

The House offer appears very similar to a deal, known as a compact, struck by Gov. Rick Scott and the Seminoles late in 2015. The Legislature never approved the compact, so it never went into effect.

But the 2015 compact provided the baseline for House and Senate gambling plans again this year. Both chambers are asking the Seminoles to guarantee $3 billion in payments to the state over seven years, in exchange for craps and roulette, something the tribe had agreed to in the ill-fated deal.

The urgency to pass gambling legislation heightened in the aftermath of a series of court rulings that have weakened the state's position regarding a 2010 compact with the tribe.

In addition, the Florida Supreme Court is poised to decide on a case that could open the door for slots at pari-mutuels in eight counties where voters have approved them.

The issue of slots in the eight counties -- Brevard, Duval, Gadsden, Hamilton, Lee, Palm Beach, St. Lucie and Washington -- remains a major sticking point between the House and Senate. The Senate would allow pari-mutuels in those counties -- and possibly others in the future -- to add the lucrative machines; the House would not. The 2015 deal would have allowed only Palm Beach County to add slots, as well as more machines in Miami-Dade.

Another major issue involves controversial "designated player" card games.

A portion of the 2010 compact giving the tribe "exclusive" rights to operate banked card games, such as blackjack, at most of its casinos expired in 2015. But the Seminoles sued the state, and a federal judge last year ruled that the state had violated the exclusivity agreement by allowing the designated player games -- in which a player acts as the "bank" -- at pari-mutuel cardrooms. The state has appealed the decision.

Mirroring restrictions on the games included in the 2015 compact proposed by Scott and the tribe, Wednesday's House proposal would cap the number of designated player tables that cardrooms could have at 25 percent of the total number of tables. Bets would be capped at $25 per hand, a significant reduction from the unlimited bets that now can add up to thousands -- or tens of thousands -- of dollars.

Diaz said lawmakers want to do away with the current practice in which "dealers" working for third-party companies -- which have paid up to $100,000 participate as "designated players" -- act as the bank.

"We want to avoid a scenario where there really isn't a game where everybody could participate," Diaz told reporters after Monday morning's meeting, noting that the 2015 compact proposal included "some disallowing of gigantic requirements in order to participate as the house" in the controversial card games.

Although the Senate plan would legalize the designated player games, Galvano appeared to view the House's approach favorably.

"I think that's a significant point, welcome in your offer," the Bradenton Republican, slated to take over as Senate president in November 2018, told Diaz, adding that the federal court in the Seminoles case found that the designated player games had become "a banked card game under the guise of having a player as the conduit for the banking."

But the pari-mutuel industry decried the caps.

"A $25 cap would make designated player games unprofitable and is essentially a regulatory ban," said Nick Iarossi, a lobbyist who represents pari-mutuels with cardrooms in Jacksonville and Melbourne.