TALLAHASSEE, Fla. – A proposed gambling agreement between the state and the Seminole Tribe might be a long shot, but the legal wrangling has already begun.
As Sen. Wilton Simpson and tribal representatives negotiate a new pact, backers of a constitutional amendment that requires voters to authorize gambling expansions are putting legislators on notice about a potential legal fight over sports betting and controversial “designated player” card games.
The constitutional amendment, approved in November, “requires a vote by citizens initiative” for “casino gambling” to be authorized in Florida. “Casino gambling” is defined as “any of the type of games typically found in casinos” and that are defined as “Class III gaming” under federal law. Class III games include slot machines, blackjack, craps and roulette -- and sports betting.
Simpson, a Trilby Republican who is slated to become Senate president after the 2020 elections, has been negotiating with the Seminole Tribe on a new gambling deal that could lead to additional revenue for the state. A deal would have to be approved by lawmakers before the annual legislative session ends May 3.
Sources told The News Service of Florida this week that one of the elements of a potential deal could allow sports betting at the state’s pari-mutuel facilities -- dog tracks, horse tracks and jai alai frontons -- as well as at professional sports arenas. Under one scenario, the Seminoles could act as a “hub” for sports betting, which is on the table after a U.S. Supreme Court decision last May opened the door for states to authorize the popular activity.
In a letter Tuesday to Senate President Bill Galvano and House Speaker José Oliva,a lawyer representing backers of the amendment argued that allowing sports betting anywhere other than at tribal casinos would require voter approval. The same goes for popular designated player card games, now being offered at numerous pari-mutuel cardrooms throughout the state, according to the attorney, former appellate judge Paul Hawkes.
Sports betting meets requirements for voter approval under the amendment, according to Hawkes, because it is a “Class III game” and it is typically found in casinos.
“Before sports betting can be legalized in Florida, it must be authorized by a citizen initiative,” he wrote in Tuesday’s 16-page missive to the legislative leaders.
Galvano, a Bradenton Republican who was instrumental in negotiating and crafting a 2010 agreement with the Seminoles, has said he wants to address sports betting, a potential source of revenue for the state. Galvano’s spokeswoman said the Senate president is reviewing the letter but was not prepared to comment Tuesday.
Galvano previously has relied on a legal opinion by Daniel Wallach, a Broward County-based gambling lawyer who is a national expert on sports betting. Wallach argues that sports betting in Florida does not require voter approval.
The language of the constitutional amendment, which says “any type of games typically found in casinos,” rules out sports betting, because only a handful of casinos offered sports betting when 71 percent of voters approved the proposed amendment in November, Wallach said Tuesday in a telephone interview with the News Service.
But Hawkes argued that, at the time the amendment passed, sports betting was prohibited in most states.
“The proper inquiry is, where would a Florida voter expect to find lawful sports betting in November of 2018? Consequently, it is not a test of counting how many casinos offered sports betting, but it is really a test of venue,” he wrote. “It may not have been found often, but when legal sports betting was found, it was ‘typically’ found at casinos at the time Florida voters adopted Amendment 3.”
But Wallach accused Hawkes of trying to “white out the two most essential words in the definition,” referring to “typically found.”
“Their tortured interpretation does not hold up under any reasonable statutory interpretation,” Wallach said.
Only six of the 40 states that had casino gambling at the time the amendment passed allowed sports betting, Wallach said. And only three of more than 500 tribal casinos throughout the nation offered the gambling activity in November, according to Wallach.
“There’s nothing ‘typical’ about sports betting being found in a casino as of November 2018,” he said. “Clearly the Amendment 3 proponents will stop at nothing to try to twist and contort the plain words of the constitutional provision. The plain fact of the matter is the words are the words. They cannot be excised out of the Constitution.”
Hawkes also addressed controversial designated player games, which are at the heart of a lengthy legal dispute between the state and the Seminoles and would be a key element of any new deal. The Seminoles -- and a federal judge -- have maintained that the card games violate the 2010 gambling agreement with the state that gave the tribe “exclusivity” over offering banked card games, such as blackjack.
In the letter, Hawkes cited a state rule governing designated player games, which critics say improperly allow a player to serve as the “bank” or the “house.”
“Under this rule, the house decides who may serve as a designated player, sets the conditions, and defines the terms. For all practical purposes the house controls the bank,” Hawkes wrote, pointing to a decision by U.S. District Judge Robert Hinkle, who sided with the tribe in a case centered on whether the designated player games violated the tribe’s exclusivity over banked card games. “Beyond dispute, banked games are illegal in Florida.”
Because no state law authorizes pari-mutuel cardrooms to conduct banked card games and because the activity falls within the definition in the amendment, “a citizen initiative would have to be adopted before the games could be authorized,” he wrote.
But John Lockwood, a lawyer who represents many of the state’s pari-mutuel cardrooms, disputed Hawkes’ analysis.
“Two different administrative law judges have concluded the games can lawfully be operated in the state of Florida. Any assertion otherwise is just absurd,” Lockwood told the News Service.
Hinkle’s ruling about the designated player games “is a contract case between the state and the Seminoles and has nothing to do with whether or not these games are operated in conformance with Florida law,” Lockwood said.
Hawkes’ legal analysis also addressed a third and equally controversial issue: whether pari-mutuels that are allowed to have slot machines can relocate their facilities.
According to Hawkes, that would require voter approval because a 2004 constitutional amendment authorized slots at pari-mutuels in Miami-Dade and Broward counties only at “existing, licensed pari-mutuel facilities.”
“This phrase is unambiguous, and the relevant noun is ‘facilities,’ not permit holders. Thus, the slot machines are tied, directly, to the location and not to license holders,” Hawkes wrote.
But Lockwood said the constitutional amendment is “game-specific, not location-specific.”
Lockwood said that means there’s nothing in the constitutional amendment that would prevent legislators from authorizing slot machines in the eight counties -- Brevard, Duval, Gadsden, Hamilton, Lee, Palm Beach, St. Lucie and Washington -- where voters have approved the machines in referendums.
“The Florida voters have already approved slot machines by citizens initiative, therefore the Legislature is free to authorize those games throughout Florida as they see fit,” Lockwood said.