Tribe, Legislative leaders huddle on gambling

By Dara Kam, The News Service of Florida
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TALLAHASSEE, Fla. - The Seminole Tribe could deal its opening bid before the end of the week as negotiations heat up with the state about a 20-year gambling pact, according to one of the Legislature’s key negotiators.

Sen. Bill Galvano, Rep. Jose Oliva and Seminole Gaming CEO Jim Allen huddled Tuesday for more than an hour inside Oliva’s fourth-floor suite, discussing elements of a new agreement -- called a “compact” -- to replace a 20-year deal inked in 2010.

“I think the tribe is certainly looking forward to working with the state and leadership to see if there’s something that can be worked out,” Allen, who also serves as chairman of Hard Rock International, told The News Service of Florida after the meeting.

Galvano, a Bradenton Republican who has been instrumental in crafting and passing gambling legislation for years, predicted the tribe could provide a draft compact for lawmakers to review before the end of the week.

“I believe everyone left that meeting feeling like there were next steps to be taken. The very specific next step is, after we had talked about the 40,000-foot issues today, to receive later this week a draft compact … one for us to adjust and make a response to,” Galvano, who is slated to take over as Senate president after the November elections, said in an interview immediately after the meeting.

One of the critical provisions of the 2010 compact, giving the tribe “exclusivity” over banked card games, such as blackjack, expired in 2015. That spawned a protracted legal battle and previously futile attempts by lawmakers to seal a new deal.

But the double threats of a looming constitutional amendment on the November ballot and an annual $250 million hit to the state budget have injected a sense of urgency as lawmakers once again grapple with the thorny gambling issue. The constitutional amendment seeks to give voters control over future gambling decisions, potentially taking power away from lawmakers.

Gambling bills are moving in the House and Senate, as talks between Oliva, Galvano and the tribe adopt a more serious tone.

Key issues for the Seminoles will be how the state handles controversial “designated player” games at cardrooms as well as “fantasy sports” games. The tribe also objects to allowing pari-mutuel operators in Broward and Miami-Dade counties, which already have slots, to add blackjack, even in a limited way, something lawmakers have floated in previous years, sources close to the talks told the News Service.

The Seminoles also have concerns about allowing dog and horse tracks to do away with racing but keep lucrative activities such as slots and poker, a process known as “decoupling,” and a potential reduction in the tax rate the South Florida pari-mutuels pay on slot machine revenue. Both items are included in the Senate plan (SB 840) approved by a committee Monday, while the House bill (HB 7067) would prohibit decoupling.

The House and Senate bills also address designated player games, which have been at the heart of the dispute between the tribe and the state.

After a federal judge sided with the tribe in a dispute over whether designated player games breached the Seminoles’ exclusivity over offering banked card games, the tribe agreed to continue making payments to the state, and gambling regulators promised to “aggressively enforce” the manner in which cardrooms conduct the designated player games. The tribe pays a minimum of $250 million a year under the banked-card portion of the 2010 agreement.

The House proposal would ban cardroom operators from offering designated player games, while the Senate measure would legalize the wildly popular card games and specify how they could be played.

“I think that’s something from the tribe’s perspective that still needs to be reviewed,” Allen said of the Senate bill. “Our concern, separate from the compact, is that outside influences coming into the state of Florida, non-regulated, is something that we don’t believe is good for the industry in general. I think that that language is something that we’ll have to work through with the state.”

Much of the controversy concerning the games has centered on companies that paid cardroom operators as much as $100,000 to be a “designated player,” which acts as “the bank.” The companies then hire workers to act as “dealers,” but videos of the employees showed that they were sometimes absent from the card table while the games were being conducted. The Senate proposal would require the companies and employees to be licensed by the state, while the House proposal (HB 7067) includes an outright ban on cardroom operators offering the games.

Neither chamber’s proposal includes authorization for slot machines in eight counties where voters have approved referendums to allow slots at local dog and horse tracks. Legislative action is needed for the tracks to add slots.

Senate President Joe Negron, R-Stuart, has said he wants the Legislature to address the will of the voters. But for the Seminoles, slots outside of Broward and Miami-Dade counties are a no-go.

“They view that as a non-starter for a continued revenue-share payment from the tribe and cautioned that, at least from the tribe’s perspective, that they don’t believe that the (U.S.) Department of the Interior would approve a revenue share while at the same time having that level of expansion throughout the state,” Galvano said.

Federal officials have to sign off on any gambling agreement struck between the state and the tribe, and the deal has to give the Seminoles some exclusivity in order to warrant a revenue-sharing agreement.

“I don’t think anything’s off the table at this point. There’s a lot in play. I want to see some numbers and what it means to the state of Florida before I make any decisions as to what is and what is not off the table. But I do believe progress is being made,” Galvano said.

The Senate proposal in its current form also would allow the tribe to add craps and roulette, games the Seminoles have long sought and an item discussed Tuesday, Galvano said.

The Senate plan would require the Seminoles to guarantee $3 billion in payments to the state over a seven-year period, an increase of about $100 million over what the tribe currently pays.

The amount of the tribe’s revenue share is still up in the air, Galvano said.

“At this point, I’ll say I’m looking for more than what they’re currently paying, especially if they are able to achieve additional time, stability and games, it’s worth it for them to pay more to the state of Florida,” he said.

News Service of Florida