March 28, 2017

Mid-session thaw: Gaming bill is headed to conference

DRAFTKINGS FANDUEL (2)So why would a House committee meet for 10 minutes Tuesday for the sole purpose of passing a bill clarifying that fantasy sports leagues are not gambling? 

The ice has thawed on the gambling impasse.

House and Senate leaders have agreed to pass their respective bills off the floors of their chambers to set up a gaming conference for as early as next week. It's not a sign that there is a deal. But it is a sign that they're taking the issue of shoring up their gaming revenues seriously as they head into discussions over the budget.

The recent decision by a Leon County Circuit Court that determined slot machine look-alikes found in bars across the state are not illegal gambling devices. The decision was noticed by parimutuels, convenience stores and gaming centers across the state who signaled an interest in installing the machines without having to seek a gaming license.

But the decision also triggered a warning letter from the Seminole Tribe of Florida, which said that if the state allows the so-called "pre-reveal" games to operate it will be in violation of the 2010 gaming compact with the state that supplies $120 million in annual revenue to Florida's treasury. More here on the letter. 

It was the second court decision to strike a blow to the compact that promised to give the state about $250 million in total revenues when it was first signed. U.S. District Court Judge Robert Hinkle last fall ruled that so-called "designated player" card games, also known as "player banked" games which have been approved by the state at pari-mutuel facilities, violated a provision in the compact that gave the Seminole Tribe the exclusive right to operate banked card games, such as black jack, chemin de fer and baccarat at its casinos in Miami-Dade and Broward counties. 

The second court ruling was a "game-changer,'' Rep. Jose Felix Diaz, R-Miami, the chairman of the House Commerce Committee and lead negotiator on gambling issues for the House told the Herald/Times. "If the federal court ruling was a curveball, this was a spitball.'' 

Late Tuesday, the House scheduled a special meeting of the Commerce Committee to take up its gambling bill on Thursday. No word yet on whether the House will add language to it's gaming bill to close the loophole on the so-called "pre-reveal games" which the Seminole say violates the compact.

The Senate will take up its broader gaming bill on Wednesday and, as of late Tuesday, no amendments had been filed to close the loophole. 

The fantasy sports bill, HB 149, by Rep. Jason Brodeur, R-Seminole, was passed unanimously without discussion at the last meeting of the House Tourism and Gaming Control Subcommittee. The measure "will clarify that fantasy sports is not gambling,'' Brodeur told the committee. "Once and for all this is not gaming."

The House, however, takes a different tack than SB 8, which defines daily fantasy sports leagues as gaming, regulates them and address the growing popularity of E-sports -- video based competitions that involve an element of chance.

"It is almost a pastime for a significant number of Floridians so I don't think that we need government to regulate it,'' Brodeur said after his bill passed. "It's almost self-regulating."

By giving the fantasy sports bill its first hearing, the House could now tee it up as part of the negotiation when the chambers meet to resolve differences in their respective gambling bills.

The differences between the House and Senate proposals are vast. The Senate opens the door to massive expansion of slot machines and Indian gaming, while the House attempts to retract gaming and preserve protected markets for horse and dog racing and tribal gaming for another 20 years.

Both bills also attempt to renew and expand the provisions in the gaming compact with the Seminole Tribe. Since October 2015, when the blackjack provisions of the current compact expired, the tribe has been continuing to make monthly payments to the state as part of revenue sharing from the card games. But the state is not spending the money until the compact is renewed or a new one is approved by the Legislature.

If approved, the Senate plan would allow the state to use $200 million of that money the state has put in escrow and another $325 million in first-year revenues, said Sen. Bill Galvano, R-Bradenton, the Senate's lead gambling negotiator. Annual revenues after that could amount to about $450 million.

Photo: Fantasy sports companies DraftKings Inc. (the app is shown) and FanDuel Inc. (website) would be treated differently in pending House and Senate gambling bills. Bloomberg

March 01, 2017

Seminole Tribe to lawmakers: No deal on proposed gaming bills -- so far

CasinoAlthough the Florida House and Senate are miles apart in how far they are willing to go to protect the Seminole Tribe's exclusive access to gambling in Florida, the Tribe announced this week it's not ready to deal on either of them.  Download Seminoleletter228

In a letter hand delivered early Tuesday to Gov. Rick Scott, Senate President Joe Negron and House Speaker Richard Corcoran, Marcellus Osceola, the chairman of the Tribal Council, said that because both bills require the tribe to increase its revenue share to the state while also shrinking its monopoly over some games, it is likely to violate the federal Indian Gaming Regulatory Act, IGRA.

"Unfortunately, both the Senate and House bills would require dramatic increases in the Tribe's payments without providing increases in the Tribe's exclusivity sufficient to justify those higher payments,'' Osceola wrote. "The Senate bill would require the same higher payments, including a guarantee, that were proposed in the 2015 compact, but would add numerous additional exceptions to the Tribe's exclusivity while broadly expanding gaming in Florida."

He added that while the House bill "is less objectionable in that that it does not propose as many new exceptions to the Tribe's exclusivity and does not broadly expand gaming in the State," it does propose "major increases in the Tribe's payments, including a guarantee, but without providing the necessary additional value from the State."

The conclusion: "...even if the Tribe were to agree to either of the proposed compacts, it is almost certain that the compacts proposed in theses bills would be disapproved by the federal government as violating IGRA,'' Osceola wrote. "Beyond that, we have concluded that neither the Senate or House proposals make economic sense for the Tribe." 

Key to the Tribe's argument is the June 2016 letter to the Tribe from the Obama administration's Department of the Interior, which stated that when lawmakers proposed similar gaming legislation last year -- instead of advancing the compact agreed to with the governor in December 2015 -- the proposals did not satisfy the requirement that the state made a meaningful concession to the Tribe. 

"We are concerned that the bills may violate IGRA's prohibition against taxing tribal gaming revenue and the Department's long-standing revenue sharing policy,'' wrote Paula Hart, director of the Office of Indian Gaming. "We would be hard-pressed to envision a scenario where we could lawfully approve or otherwise allow a compact to go into effect that calls for increased revenue sharing and reductions in existing exclusivity." 

Osceola added that the Tribe is "willing to meet" with legislators and the governor's office "to work out a mutually beneficial agreement."

February 23, 2017

House and Senate have opened the board on gaming bill and differences are vast

GamblingFlorida House and Senate committees on Thursday gave approval to vastly different approaches to the future of gambling in Florida, with the Senate opening the door to massive expansion of slot machines and Indian gaming, while the House attempts to retract gaming and preserve protected markets for horse and dog racing and tribal gaming for another 20 years.

The House bill, PCB TGC 17-01, "reaffirms our commitment to a limited gaming footprint," said Rep. Michael LaRosa, R-St. Cloud, chair of the Tourism & Gaming Control Subcommittee which passed its bill 10-5.

"It also keeps the Legislature in charge" of the future of gaming, he said, an attempt to halt the expansion of gambling that has occurred in recent years as lawmakers failed to close loopholes and clarify the law in the face of court rulings.

By contrast, the Senate bill would give Miami-Dade and Broward counties each an additional slot casino, the Seminole Tribe would have seven full-scale casinos, and horse and dog tracks in at least eight counties would get new slot parlors.

The measures are seen as the first pieces in a lengthy session-long negotiation expected to guarantee the state an estimate $250 million ot $300 million in annual revenues from the Seminole Tribe and to clarify the state’s now-porous gaming laws that have been weakened by legal challenges, court rulings and numerous loopholes.

"Were going to pass a gaming bill” that ties the compact to “massive contraction,’’ predicted House Speaker Richard Corcoran in an interview Wednesday with the Herald/Times Tallahassee bureau. “I can assure you the face of gaming is a massive contraction and those people who have abused the system, abused the power of the special interests to get things in law that should never have been in law, will suffer the consequences.’’

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January 25, 2017

Senate advances gambling bill and chance to bring in $525 million jackpot

Casino

@MaryEllenKlas

The Florida Senate sent a bold signal to Gov. Rick Scott and the Seminole Tribe Wednesday, as a key committee gave unanimous approval to a plan to expand gambling in Florida while attempting to recover as much as $525 million in revenue sharing from the Tribe this year.

If approved by lawmakers, the governor, and the Seminole Tribe, the measure “could make a huge difference" to the state budget, which faces a $1 billion revenue shortfall, said Sen. Bill Galvano, R-Bradenton, the bill sponsor.

The Senate Regulated Industries Committee approved the measure without an amendment or debate, a sign that the Senate “is very serious” about advancing an issue that has stalled for years.

“Sure it’s about gaming but it’s also about creating stability for a dubious marketplace,’’ said Galvano, who was a key player in negotiating the state’s current gaming compact with the Tribe in 2010 and is the Senate’s lead negotiator again this year. “It’s about establishing predictability for our state budget. It’s about protecting programs that exist in our state and creating funding opportunities.”

Rep. Jose Felix Diaz, the House Commerce Committee chairman who is the House’s lead negotiator on the compact, hailed the Senate action.

“The Senate’s passage of a gaming bill this early in the year is a gigantic first step,’’ he said. “The fact that we are seeing forward progress in January is a testament to Sen. Galvano’s willingness to continue a conversation with multiple interested parties, including the governor, the Seminole Tribe and the Florida House.”

The proposal, SB 8, would broadly expand gaming in Florida by not only providing two new slots casinos in Miami-Dade and Broward counties but expand gaming options at existing South Florida casinos and bring slots to eight additional counties were voters have approving them at ailing racetracks and frontons.

The Seminole Tribe, which has been attempting to renew its agreement with the state to exclusively offer black jack in exchange for revenue sharing, would also get access to expanded gaming options under the deal. The Tribe would retain its monopoly over slot machines in Tampa but would eliminate its monopoly over slots in the rest of the state. It would also lose its exclusive right to offer blackjack in South Florida because the bill allows Miami-Dade and Broward slots casinos to also offer 25 black jack tables.

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January 20, 2017

Galvano: Fontainebleau 'didn't pick our firm to influence me'

Bill GalvanoThe powerful lawmaker who is heading the Senate's gambling negotiations confirmed he has done legal work for the owners of the Fountainbleau Resort, a real estate firm seeking to bring slot machines to Miami Beach.

Sen. Bill Galvano, R-Bradenton, told the Herald/Times that Turnberry Associates, the owners of Aventura Mall and the Fontainebleau "are a former client." He said his law firm, Grimes Goebel Grimes Hawkins Gladfelter & Galvano, did land use law for the company four years ago and he personally worked with Turnberry on a commercial transaction three years ago. The story was first reported by the Associated Press on Thursday.

"It's not a continuing relationship right now and I don't even see it as an issue,'' Galvano said Friday. Galvano is a partner in the firm, which has offices in Bradenton and Miami. He reported $451,000 in income and profit sharing from the firm last year. 

Last week, Galvano filed a massive Senate bill that will expand gaming in Florida, allow for two new slots licenses to bidders in Miami Beach and Broward County, and open the door to slots licenses at race tracks around the state. The bill would regulate online fantasy sports and allow the state to buy out active gaming permits in exchange for the new slots licenses. Galvano said the proposal is intended to open the debate with the Seminole Tribe which is negotiating a renewal of its billion dollar compact with the state.

Galvano is also serving as the Senate's key negotiator with the Tribe on the compact, a role he also served in 2010 when he was the House's key negotiator on the first compact that is now in force.

At that time, Turnberry Associates was not a client, Galvano told the Herald/Times, but subsequently became a client.

"I do not believe they picked our firm to influence me,'' Galvano said. "I know what we do and the work that we do around the state is not unusual. I have several Miami clients, big clients too." He said the one of his "big clients" introduced him to the owners of the Turnberry Associates. 

"I know we provide a service and it was not unusual for us to be working in that venue,'' he said.

Since 2013, Galvano's political committee, Innovate Florida, has received more than $342,000 from organizations that have a stake in the gaming bill, campaign finance records show. He received the most $205,000 from Disney Worldwide Services, which opposes any expansion of gambling but the second highest amount from a single entity -- $90,000 -- came from Fontainebleau Resorts.

The current gaming compact with the Tribe, as negotiated by Galvano, effectively serves to cap gaming expansion in Florida and makes it very difficult for companies like the Fontainebleau to obtain a slots license. It requires that any new slots licenses approved by the state would result in a loss of nearly $200 million in annual gaming revenues from the Seminole Tribe.

Under the bill Galvano proposed last week, any new slots licenses would have to receive approval from the Florida Division of Parimutuel Wagering based on certain criteria, and would not require legislative approval. The challenge for slots proponents like Fontainebleau Resorts, however, is getting approval for the slots expansion through both the House and Senate.

Galvano downplayed his role over any new licenses and said he is confident there will be "many potential applicants who have had an interest in Florida for a long time'' if new slots permits are approved.

"I want the competition,'' he said. "If we are going to have additional economic development out of new licenses, lets run up the numbers and see who will present the best deal. That will probably be best determined by the division, based on criteria, some of which is spelled out in the bill."

Since 2010 the Fontainebleau has donated nearly $2.3 million in contributions, including more than $800,000 to the Republican Party of Florida, the Associated Press reported.

Galvano said "it's very difficult being a lawyer-legislator and [this question] comes with the territory." He added that any assumption that his legal work was used to influence his legislative work "was trying to draw a much bigger conclusion than what was reality, but that's how it happens."

The lead lobbyist for Turnberry Associates, Michael Corcoran, is the brother of House Speaker Richard Corcoran. Michael Corcoran. did not return a request for comment.

January 12, 2017

Galvano proposes sweeping gaming expansion: 'What I want to avoid is death by 1000 cuts'

Slots MiamiFlorida would become the nation’s slot machine capital under a sweeping rewrite of the state’s gaming laws filed Thursday that would give Miami-Dade and Broward each an additional slots venue, the Seminole Tribe seven full-scale casinos, and horse and dog tracks in at least eight counties new slots parlors.

The proposal by Sen. Bill Galvano, a Bradenton Republican, would broadly expand gaming in Florida by not only providing an opening for Genting Group, the Malaysian company, to build its long-sought resorts casino in Miami, it would also serve to prop up the declining horse and dog racing and jai alai industries by allowing them to breathe life into their operations with slot machines. For the newest gaming option, fantasy sports, the state would impose regulations, and require a permit to operate.

“It is a sincere effort to try to address these issues in a comprehensive way and balance private industry with maximizing revenues from the Seminole Tribe,” Galvano told the Herald/Times. But, he added, the 112-page bill should also be seen as the state’s opening offer.

“It is also incumbent on the Seminole Tribe to negotiate back toward us,’’ he said. “It’s a much better process to be addressing all the issues comprehensively by putting the state’s position out there and then having the Tribe respond. What I want to avoid is death by 1,000 cuts.”

Galvano, who last week became president of the National Conference of Legislators from Gaming States, said that in the past legislators have attempted to negotiate a comprehensive proposal only to have it get bogged down in “little industry fixes” as the competitive parimutuel industry struggled to compete with the Tribe’s growing gaming empire.

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January 10, 2017

Progress emerges on gaming compact but can they really do it this time?

CasinoFlorida lawmakers have inched closer to renewing a 20-year, multi-million dollar gaming compact with the Seminole Tribe of Florida by allowing owners of declining parimutuels to sell their permits to others who want to install slot machines at newer facilities outside of South Florida.

Sen. Bill Galvano, R-Bradenton, and Rep. Jose Felix Diaz, R-Miami, have been actively negotiating with the Tribe and the governor’s office on a new gaming compact after a portion of the current one expired in October 2015, but the state can’t count on the revenue just yet.

Progress is so close the Senate has started starting drafting a bill but then canceled a meeting to hear the plan this week and will hear it later this month when lawmakers return to Tallahassee for pre-session hearings, Galvano told the Herald/Times.

For the first time in years, House leaders appear ready to allow some expansion of slot machines outside of Miami-Dade and Broward counties to appease members from industry-heavy districts. But, in return, they are also abiding by House Speaker Richard Corcoran’s wishes to contract gaming that will lead to a net reduction of live, active permits throughout the state.

The idea, said Diaz, is to allow owners of stagnant dog track or jai-alai fronton operations to sell their live gaming permits to others seeking to obtain a slots license, and to “put the dormant permits out of their misery.” More here. 

October 05, 2016

Genting pursues marina plan on Miami Herald site without resort

via @AndresViglucci

Malaysian casino operator Genting, which has been pursuing plans for a marina for large yachts at the old Miami Herald property on Biscayne Bay, got a boost when the Miami River Commission endorsed the idea this week.

The commission, which has no approval power but advises local governments on development along the river, voted to support the marina plan 10-1 after a presentation from a Genting attorney on Monday. The plan also envisions that Genting would build a new public baywalk between the Venetian and MacArthur causeways.

Genting sought commission support because it is asking Miami-Dade County environmental regulators to approve the transfer of 42 existing boat slips from two river marinas to the bay. A county manatee-protection plan strictly controls construction of powerboat slips in the river and bay to protect the endangered marine mammals and their habitat.

The formal hearing was the first public confirmation by Genting, which bought the Herald property in 2011 for $236 million and announced plans for a massive casino resort on the site, that it intends to pursue approval for the 50-slip marina independently of development on dry land. The marina and baywalk were both part of Genting’s original vision for the property.

The company, which has been unsuccessful in persuading the Florida Legislature to approve gambling on the site, has said in the past that it still intended to build a hotel there, although without a casino. Genting has never submitted any plans to that effect to the city, however.

But Genting did submit marina plans to the county, and in July followed up with a letter proposing the slip transfers, prompting speculation that it was proceeding with that proposal without the resort piece. That’s something Genting attorney Spencer Crowley confirmed at the hearing. Story here. 

July 27, 2016

Genting seeks deal to accelerate Biscayne-based marina, despite county's manatee protections

via @AndresViglucci

Casino operator Genting, which has been seeking permits for a 50-yacht marina at its property at the old Miami Herald site in downtown Miami since 2013, has floated an unusual proposal to Miami-Dade County environmental regulators to goose approval of the slow-moving application.

It’s asking the county’s Department of Regulatory and Economic Resources to allow the company to transfer existing boat-slip permits from properties on the Miami River owned by a scion of the Matheson family — something county regulators say has never been done.

Under the county’s manatee protection plan, which strictly limits construction of new powerboat slips in the river and bay to protect the endangered marine mammals and their habitat, Genting subsidiary Resorts World Miami is eligible for no more than eight slips at the Herald site, assuming that it could win approval from the hard-to-satisfy regulators.

In a July 5 letter to the county, though, Resorts World’s consultant, Kirk Lofgren of Ocean Consulting, outlined a proposal to transfer 42 slip permits now attached to Austral Marina — which Lofgren owns — and three parcels owned by Finlay Matheson on which he operates a marina and has leased out space to Apex Marine, a repair and maintenance boatyard. Matheson is a prominent descendant of the family that gave the land for Crandon Park on Key Biscayne to the county in exchange for construction of the Rickenbacker Causeway, and that also donated a portion of the land for Matheson Hammock Park. Story here. 

July 07, 2016

Supreme Court is out for the summer, but rulings over death penalty and gaming are not

Florida supreme court.1_12061496_8colThe Florida Supreme Court released its final round of rulings for the summer Thursday and issued a rare clarification of its workers compensation decision of last month, but it also left unresolved two of the most controversial issues to come before the court this year: the death penalty and expansion of slot machines. 

The court postponed rulings on the constitutionality of the state's death penalty until its next term begins in late August, leaving the state's procedure and the 388 inmates on death row in limbo for potentially several more months.

The ruling is expected as part of a series of hearings the court held in May and June over cases challenging the state's death penalty law passed by lawmakers in March, after the U.S. Supreme Court ruled in in Hurst v. Florida that the state’s sentencing scheme was unconstitutional. The court has stayed two executions in the wake of the Hurst ruling, heard arguments in more than a dozen death penalty cases, and has not yet unanswered whether longtime Death Row inmates should be afforded new sentencing hearings.

The court also heard arguments in June about whether a 2010 state gaming law allows counties to expand slot machines without legislative approval.

Both decisions could have wide-ranging ramifications and could potentially provoke criticism, controversy and unleash an election-year debate over two highly-charged issues.

Three of the seven sitting justices on the bench are up for a merit-retention vote in November -- Chief Justice Jorge Labarga, Justice Charles Canady and Justice Ricky Polston.

The death penalty questions before the court were spawned by the January U.S. Supreme Court ruling that declared the state’s death sentencing system unconstitutional because it gave too little power to juries. For decades, Florida jurors issued bare majority recommendations, with judges ultimately imposing the death penalty.

The opinion evolved from a similar ruling in a 2002 case, Ring v. Arizona, which held that juries in that state should have the sole authority to decide on aggravating circumstances that made someone eligible for the death penalty. Alabama, Florida and Delaware are the only three states in the nation that do not require an unanimous jury to impose the death sentence and Florida officials believed the jury’s “advisory” role was sufficiently different to allow the court to differentiate Florida from the Arizona ruling. 

The decision forced the Legislature to rewrite its death-penalty sentencing law to require juries to unanimously vote for every reason, known as aggravating factors, that a defendant might merit a death sentence. The decision to impose the death sentence requires 10 of 12 jurors.

The fact that the court went on its summer recess without issuing an opinion, however, doesn't necessarily mean there won't be one to come before the court issues opinions again in late August. 

Martin McClain, a lawyer who has represented more than 250 defendants condemned to death and presented arguments before the court in June, said Thursday that in 2009 he was appealing the death sentence of an inmate issued its last opinions before it recessed for the summer one week, and the next week the opinion on his case was issued. 

"We have no idea what they will do,'' he said in an interview. He noted that there are two people on death row in which juries recommended a life sentence but a judge overrode it with a death sentence and the court may be taking its time to consider the impact of those cases.

"We now have a statute that says you can't get a death sentence if three or more people voted for life and yet we are still going to execute people who have a life recommendation? It's very difficult to determine what we're going to do. It makes sense to me the ourt wants to do it right ...It's also clear from the oral arguments that they are not in agreement."

On the gaming question, the  Florida Supreme Court heard argument from owners for Gretna Racing that the rural racetrack should be allowed to install slot machines because it has the approval of county voters. 

The case hinges on what appears to be conflicting legislative intent stemming from a 2009 law that modified the implementing law relating to slot machines in Miami-Dade and Broward counties by allowing Hialeah Park to be eligible for a slots license.

The race track was not an operating pari-mutuel facility when voters approved the statewide constitutional amendment allowing slot machines in Miami-Dade and Broward in 2003 but, because Hialeah was located in Miami-Dade, legislators agreed to revise the law to include it among the casinos that could operate Class III slots. 

The Legislature again changed the law in 2010 to allow counties to authorize slot machines. Gretna argues that the change applies to all counties but the state argues that the slots expansion is only allowed if it is first approved by the Legislature or the state Constitution.

If the court sides with Gretna, it could usher in the explosive growth of gambling across the state. At least five other counties — Brevard, Hamilton, Lee, Palm Beach and Washington  — have already voted to bring casinos to their stressed horse and dog tracks and jai alai frontons. A statewide gaming expansion would also invalidate the $120 million-a-year gaming compact between the state and the Seminole Tribe of Florida.