February 09, 2016

House committee rejects attempts to force compact to come to a statewide vote

Gaming crowdThe House Regulatory Affairs Committee meeting is off and running, as they take up three high-profile bills aimed at rewriting the state's gaming laws and ratifying the compact negotiated between Gov. Rick Scott and the Seminole Tribe. 

First up, Rep. Mike Miller, R-Orlando, offered a rewrite of the compact, putting a cap on the number of slots the tribe can offer,  giving blackjack to them for the next 15 years -- but not including craps and roulette and clarifying that they may not relocated their existing gambling facilities.

"I feel the legislative perogative for the members of this committee and the body fo thewhole is ot particcipate in the agreement with the Seminole Tribe,'' he said.

Rep. Jose Felix Diaz, R-Miami, sponsor of the bill to ratify the compact, said he will work on need for clarification about what happens within the reservations but the rest of it could interfere with the amount of money that the state gets. "You can't negotiate more money for the same deal,'' he said. "I understand these are all three important isseus that continue to be discussed with the fundamental parts of this bill."

Paul Seago of No Casinos, argued that the gambling compact "allows for a major expansion of gambling on tribal property and off." He notes it allows the tribe to "the most slot machines in the world" so that it can have more slot machines than any Las Vegas operator and in places never intended by voters when they authorized slot machines in Miami-Dade and Broward in 2004. 

Miller then withdrew the amendment. 

Rep. John Wood, R-Lakeland, offered an amendment to require the public the ratify the compact.

"The spirit of gaming expansion in our state, over the last 20 or 30 years, has been very very cautious, with the full approval of the voters or constituents,'' he said, nothing that many attempts at expansion has been defeated at the ballot box. "This goes to the central focus here of gaming. What do we want for our state. I'm convinced Florida doesn't need gaming and the people who advocate for gaming need us, but we don't need them."

The amendment was defeated. 

Gambling bill showdown begins today

Casino picTwo legislative committees today will try to do what has been an impossible for the last five years: pass a gambling bill that expands casino gambling, starts to remove the life support for the dying parimutuel industry and does it in a way that doesn't cut revenues to the state.

The two packages of gambling bills, up today in the House Regulatory Affairs Committee and the Senate Regulated Industries Committee, are being done in tandem with bills that ratify the bulk of the governor's compact with the Seminole Tribe, guaranteeing the state $3 billion in revenue over 7 years.

The proposals have been months in the making, with Rep. Jose Felix Diaz, R-Miami, taking the lead in the House and Sen. Rob Bradley, R-Fleming Island, the point person in the Senate. Each as spent enormous chunks of time in the past six months invested in trying to appease the loud and disparate factions who fight with gladiator-like ferocity in Florida’s gaming arena.

The result is a series of proposals that satiate many but satisfy no one -- except the Seminole Tribe. The nation’s most profitable tribe gets its compact ratified and a seven-year license to have a monopoly on casino games of craps, roulette and black jack at its seven casinos while it builds an entertainment empire, in time to attract a new generation of hipsters who have little interest in slot machines.

Both proposals allow for some expansion, some contraction and some outright novelties that the sponsors hopes will serve as a middle ground for everyone.

The pari-mutuels in Miami-Dade and Broward pari-mutuels would get their long-shot tax reduction on their slots operations. The Senate would allow for a 10 percent drop from the current 35 percent tax rate while the House would allow a 5 percent tax reduction at first with up to another 5 percent for pari-mutuels that agree to reduce the number of slot machines at their facilities.

But the problem with they way the state has assembled its gaming laws, with every concession to one part of the industry, another sees doom. Like a House of Cards, the removal of one piece could topple the whole arrangement.

Continue reading "Gambling bill showdown begins today " »

February 03, 2016

House moves forward with a draft compact bill as posturing over future of gaming continues

As members of the Seminole Tribe arrive in Tallahassee today to continue to put pressure on lawmakers to approve the compact they've signed with the governor the posturing between the Legislature and the governor's office continues. 

House Regulatory Affairs Committee Chairman Jose Felix Diaz told the Herald/Times that he is drafting three bill relating to gaming, including one that tracks the governor's proposed compact with the Seminole Tribe -- to be released no sooner than next week. One bill would establish the parameters of the compact, another would apply to other parimutuel facilities and the third would be a constitutional amendment.

Meanwhile, the Senate President Andy Gardiner said Wednesday that "the compact is just a heavy lift" but expects a bill to come up in the Senate Regulated Industries Committee next week.

"It's never the compact, it's everything else that potentially comes with it that makes it a little bit of a challenge,'' Gardiner, R-Orlando, said. "Keep in mind we don't even budget for the compact now and even if we passed it, it doesn't come into effect until next year and wouldn't even have an impact. We'll find out next week because I think it will be up in committee and I think that will be an indication if we can even get it done.

Senate Regulated Industries Committee Chairman Rob Bradley, R-Fleming Island, was more circumspect Tuesday when he told Florida Politics that the bill remains in limbo.

“We may be hearing it next week, maybe the week after. We may not hear it at all,'' Bradley said. 

Diaz said the elements of the House bill at this point include:

* removing the requirement that greyhound tracks race dogs, known as decoupling;

* some "modified decoupling of horses -- there will be some that continue to race;"

* additional slot machines licenses in Palm Beach and Miami but limited to 750 slot machines at each facility;

* no additional black jack games at the pari-mutuels;

Continue reading "House moves forward with a draft compact bill as posturing over future of gaming continues" »

February 01, 2016

Seminole Tribe dangles $1.8 billion expansion sweetener over compact deliberations

Scott and Tribe 2via Chabalih

Gov. Rick Scott and the Seminole Tribe of Florida are betting the Florida Legislature will approve a compact between the state and the tribe, and they’re betting big — $1.8 billion guitar-shaped hotel big.

The tribe outlined the details of the development at its Hollywood headquarters Monday to Scott, who was welcomed by the cheers of hundreds of Hard Rock employees. The $1.8 billion expansion plan was originally announced last spring, when the tribe began negotiations over the compact with the governor, and it continues to be touted as an economic reward for giving the tribe a statewide monopoly for certain casino games.

 

At the center of the proposal is the 800-room, 36-floor silver hotel, shaped like the body of a guitar rising from the Hollywood complex. The expansion also calls for five new restaurants, including a new Hard Rock Cafe, a buffet, dessert shop, nightclub and Swamp bar. If completed, as promoted, the tribe estimates the plan would create 19,452 jobs, including 4,867 full-time positions and 14,585 construction jobs, said Seminole Gaming CEO James Allen.

“We have created something that is, I think, an international tourist destination and an integrated resort that’s not just about gaming,” Allen said. “This will rival not just anything here in the state of Florida, but Atlantis [Paradise Island Resort in the Bahamas] and anything in the world. Story here. 

Photo: Gov. Rick Scott takes his seat at the table while visiting the Seminole Tribe headquarters, where he received an overview of Seminole Gaming’s expansion plan and heard from tribe members and employees regarding the importance of passage of his new compact between the state and the Tribe on Monday, Feb. 2, 2016.CARL JUSTE cjuste@miamiherald.com

January 28, 2016

Update: Court grants Bob Graham right to present arguments in pivotal Gretna gambling case

Gretna EntertainmentThe Florida Supreme Court on Thursday granted a request by former Gov. and U.S. Sen. Bob Graham to present arguments in the high profile case over the future of slot machines in Florida.  Download Supreme Court Order

Graham, who is represented by Dan Gelber, a Miami lawyer and former state legislator, filed a motion filed with the court on Wednesday asking to be allowed to file a friend-of-the-court brief in the Gretna Racing v. the Department of Business and Professional Regulation case so he could "argue that Gretna Racing's interpretation of [state law] contradicts the Florida Constitution's prohibition against lotteries."  Download Graham Gretna

The case, which has not been scheduled for oral arguments yet, is shaping up to be a pivotal one in determining the future of gambling in Florida and could have immediate implications on the gaming compact signed between Gov. Rick Scott and the Seminole Tribe.

Gretna Racing, a consortium with the Poarch band of Creek Indians, argues that it should be allowed to offer slot machines at its cardroom and race track west of Tallahassee. Gadsden County voters approved a referendum in 2012 that authorized the slot machines at the facility, which had persuaded the state to grant it the country's first pari-mutuel license for rodeo-style barrel racing. A court later ruled that the state had issued the barrel racing pari-mutuel permit in error but the company continues to operate its cardroom and pursue slot machines at its venue off of I-10 in North Florida. It argues that the referendum is enough to allow it to install the profitable machines.

The First District Court of Appeals, however, rejected Gretna Racing's argument in October, concluding that legislative approval is needed to allow any community to expand slot machines. Depending how the Supreme Court rules on that argument will have bearing on Brevard, Hamilton, Lee, Palm Beach and Washington counties which also have approved referendums seeking to allow slot machines. 

Graham, however, raises doubts about whether the Legislature has the authority to authorize slot machines outside of Miami-Dade and Broward. The Florida Legislature in 2009 passed a law expanding slot machines in Miami-Dade County by authorizing them at Hialeah race track. Lawmakers said giving Hialeah slot machines was a natural extension of the 2004 voter-approved constitutional amendment that authorized slot machines at seven existing horse and dog tracks and jai-alai frontons in Broward and Miami-Dade counties.

Graham's motion cites the dissenting opinion from Judge Scott Makar of the First DCA who said: 
“it is not at all clear that the Legislature has the constitutional authority to expand the use of slot machines outside of the geographic areas of Broward and Miami-Dade Counties." Graham noted that neither DBPR nor Gretna Racing addressed that issue during the appeal. 

(It is also possible that Attorney General Pam Bondi, who must represent the Legislature in the case, is also unlikely to raise the constitutional question about the Legislature's authority.)

"Bob Graham’s brief, moreover, would focus on the Florida Constitution, its prohibition against lotteries, and the legislative history surrounding that prohibition—areas that the parties might largely disregard,'' his motion said. He also noted that he has conferred with the parties and while Gretna Racing objects to his request to present arguments, the department consents. 

Photo: Courtesy of Creek Entertainment Gretna

January 27, 2016

Ken Lawson, DBPR secretary, won't answer why and how the agency decided to crack down on card games

A day after issuing complaints at only seven of the 18 pari-mutuels that have been authorized to operate player banked poker games, Department of Business and Professional Regulation Secretary Ken Lawson refused to elaborate on why and how he came to the conclusion that the games that his agency had previously approved had all of a sudden been ruled in violation of state law.

“After reviewing operations and obtaining additional information at pari-mutuel facilities throughout the state, the Division of Pari-Mutuel Wagering discovered violations of Florida law resulting in administrative complaints,''  Lawson said in a statement to the Herald/Times. "We will continue to administer the law and maintain our opposition to unauthorized activity conducted at any facility licensed by the state.”

The card games -- which include three-card poker, two-card poker, Casino War and Pai Gow poker -- were brought to Florida by Palm Beach Kennel Club in 2012 and soon were copied by other card rooms. They are popular because they have the feel of a casino game as players bank against each other. By 2014, Lawson's agency proposed rules to place limits on the games but that was challenged in court. The challenge led to a settlement and DBPR adopted a new rule approving and regulating the games in 2014.

As part of the approval process, regulators visited cardrooms, sought modifications in the game and clarifications in an attempt to make sure they were in compliance with state gaming laws, those involved in the activity told the Herald/Times.

As the Seminole Tribe was working to reach agreement with the state to continue operating its black jack and other table games, it filed a lawsuit alleging that the player-banked card games were an expansion of gambling and a violation of the existing compact. The state continued to allowed the games to operate after the lawsuit was filed, but after Gov. Rick Scott signed a new compact in December, the agency also moved to repeal the rule it had previously approved on player-banked games. The repeal is also being challenged.

Sen. Rob Bradley, R-Fleming Island, chairman of the Senate Regulated Industries Committee, told reporters he had questions about DBPR's action after it was raised by Jacksonville Racing CEO Howard Korman before the committee on Wednesday. Korman said that he was surprised by the action because the agency had not only approved the operation of the card games, but observed how they were operated before they gave the approval. 

"We had our internal controls approved and it wasn't until just recently that all of a sudden they said no,'' he said.

Bradley said he wanted to know "what is it that precipitated them moving in this direction at this point in time? Is it a philosophy that what they are doing before was inconsistent with the current state law and, if so, which law and what do they see happening from a factual standpoint that would draw that conclusion?"

The Herald/Times presented those questions to Lawson today, as well as our own questions. He chose to answer none of them. Our questions: 

* There are other parimutuels that operate player banked games in Florida other than the ones that were served with your complaint. Will these all be served? If not, how did you decide which to choose and which not? Why the timing difference?
 
* Please provide me with a rationale for why the department chose to reverse its position on this issue? 
 
* Will the department be using taxpayer money to defend these complaints in court? 

Economist: Gambling expansion will cannibalize existing Florida business depending on where it's located and how it looks

As Florida lawmakers decide the fate of the future of gambling in the state with the governor's proposed agreement with the Seminole Tribe, one unpleasant issue continues to emerge -- cannibalization.

It's the term used by state economists when one business feeds off the other to expand. The official definition: "creating demand for one product at the expense of another" and it is central to the success of any changes in state gambling law now being debated by lawmakers.

The proposed agreement signed by Gov. Rick Scott with the Seminole Tribe would allow the tribe to expand its casino games to include craps and roulette at its seven casinos, and add black jack at the two slots casinos that currently do not offer them. It also allows for the dog track in Palm Beach County to add slot machines and creates an opening for a fourth slot machine license in Miami-Dade County.

With each new gambling option allowed by law, the money must comes from somewhere and, state economists conclude, most of it comes from within the state -- either replacing the purchase of another good which would have been taxed in a different manner, or replacing what would have been spent on another gambling products.

A 2013 report by Spectrum Gaming Group, a New Jersey-based research firm hired by the Florida Legislature to assess the economic and social costs of expanded gambling in Florida,  found that 93 percent of the gambling in the state is done by Florida residents, generating $2.4 billion in revenue for casinos.

"It matters not so much how much those two new slots generate but where the money comes from,'' said Amy Baker, head economist with the Legislature's Economic and Demographic Research at a workshop on the gaming compact at the Senate Regulated Industries Committee.

"If we say it's a shifting of the gambling dollars from one type of gambling to another, then the amount of money that you bring in would be less,'' she said. "It matters the location and the amount of money you bring in."

Continue reading "Economist: Gambling expansion will cannibalize existing Florida business depending on where it's located and how it looks" »

Update: Seven Florida race tracks ordered by state to to stop player-banked card games


CasinoSeven parimutuel race tracks in Florida, including West Flagler's Magic City Casino in Miami, were given notice Tuesday that they were illegally operating player-banked cards games, and ordered to appear before an administrative judge.

The decision is an about-face by the state's Division of Parimutuel Wagering, which had  allowed 18 cardrooms in Florida to operate the games under the state law that authorized poker.

The card games -- which include three-card poker, two-card poker, Casino War and Pai Gow poker -- were brought to Florida by Palm Beach Kennel Club in 2012 and soon were copied by other card rooms. They are popular because they have the feel of a casino game as players bank against each other.

By 2014, state officials had proposed rules to place limits on the games but the rules were challenged in court. The challenge led to a settlement and DBPR adopted a new rule approving and regulating the games in 2014.

As part of the approval process, regulators visited cardrooms, sought modifications in the game and clarifications in an attempt to make sure they were in compliance with state gaming laws, those involved in the activity told the Herald/Times.

As the Seminole Tribe was working to reach agreement with the state to continue operating its black jack and other table games, it filed a lawsuit alleging that the player-banked card games were an expansion of gambling and a violation of the existing compact.

The state continued to allowed the games to operate after the lawsuit was filed but, after Gov. Rick Scott signed a new compact in December, the agency moved to repeal the rule it had previously approved on player-banked games. The repeal is also being challenged.

According to the complaints filed with the seven parimutuels, the state sent in inspectors to the various tracks in December and found they were operating the games and did not have proper operating licenses.

The  other parimutuels served with the notice include: Palm Beach Kennel Club, St. Petersburg Kennel Club, Gulfstream Race Course, Jacksonville Kennel Club, Tampa Bay Downs and Pompano Park Racing.  Download West Flagler AC Packet

"It's unclear how the agency can stay these games are unauthorized when they expressly authorized them in numerous approvals,'' said John Lockwood, a lawyer who represented several of the parimutuels that sought permission to operate the poker games.

Department of Business and Professional Regulation Secretary Ken Lawson refused to elaborate on why and how he came to the conclusion that the games that his agency had previously approved had all of a sudden been ruled in violation of state law.

“After reviewing operations and obtaining additional information at pari-mutuel facilities throughout the state, the Division of Pari-Mutuel Wagering discovered violations of Florida law resulting in administrative complaints,''  Lawson said in a statement to the Herald/Times. "We will continue to administer the law and maintain our opposition to unauthorized activity conducted at any facility licensed by the state.”

 

 

Howard Korman, CEO of Jacksonville Greyhound Racing, told the Senate Regulated Industries Committee Wednesday that he was surprised by the state's action after state regulators came to his facility before they installed the machines and approved them.

"We explained to them how the games are played, we had our internal controls approved and it wasn't until just recently that all of a sudden they said no,'' he told the Senate Regulated Industries Committee. " We basically felt we had complete permission. We were the 12th facility in the state to put them in, waiting to make sure everything was taken care of...I truly don't undesrtand why at this point in time the argument is being made by our regulators that the rules now is different."

Sen. Jack Latvala, R-Clearwater, offered his conclusion. "It's unfortunate for someone who went to the expense of putting those in to have the carpet pulled out from under you,'' he said, noting that he asked questions about the compact last week, suggesting that the provision in it that legalized the banked poker games was nothing new because the state has already authorized them.

"I've got to believe it's related to the compact and the questions I asked in this committee last week,'' he said. 

Sen. Rob Bradley, R-Fleming Island, chairman of the Senate Regulated Industries Committee, told reporters he had questions about DBPR's action after it was raised by Jacksonville Racing CEO Howard Korman before the committee on Wednesday.

Korman said that he was surprised by the action because the agency had not only approved the operation of the card games, but observed how they were operated before they gave the approval. 

"We had our internal controls approved and it wasn't until just recently that all of a sudden they said no,'' Korman said.

Bradley said he wanted to know "what is it that precipitated them moving in this direction at this point in time? Is it a philosophy that what they are doing before was inconsistent with the current state law and, if so, which law and what do they see happening from a factual standpoint that would draw that conclusion?"

January 20, 2016

In face of revenue decline, gaming committee gets hard-sell on compact

In the face of the new revenue numbers, Gov. Rick Scott's office on Wednesday put on a full-court press in an attempt to persuade a reluctant Legislature to accept his $3 billion agreement with the Seminole Tribe.

Jeff Woodburn, the governor's gaming policy director,  urged the Senate Regulated Industries Committee to adopt the seven-year deal to guarantee the money, and suggested that the governor was willing to wait out an agreement with lawmakers, who must ratify the deal. 

"He is going to take the time he needs to get the best deal for the state of Florida and this is the best deal for Florida,'' Woodburn said during a workshop on the proposal.

Reached later by reporters, Gov. Rick Scott said that he did his part to agree to a deal but it was now up to the Legislature to ratify it. 

Sen. Rob Bradley, R-Fleming Island, told reporters after the meeting that the projected decline in revenue "certainly got the governor's attention" and his statements show he is ready to rely on the compact to finance his tax cuts. 

"His involvement in this process is necessary if this is going to become a reality' Bradley said. "As revenue projections go down, it certainly does ratchet up pressure as to whether we need these dollars in order to provide basic services to the people of the state of Florida."

Scott, however, has not made it clear whether he would accept a compact that is less than $3 billion in new revenue for the state. Jim Allen, CEO of gaming operations for the Seminole Tribe, said that the governor is clearly committed to a $3 billion guarantee over seven years, an amount unprecedented in any tribal compact "in the history of the world."

Continue reading "In face of revenue decline, gaming committee gets hard-sell on compact" »

January 19, 2016

Faced with diminished support for compact, Seminole Tribe launches two television ads

 With the Florida Legislature all but declaring Gov. Rick Scott's agreement with the Seminole Tribe dead on arrive, the tribe has launched two 30-second television ads that are running statewide on cable news networks to keep the pressure on.

The Senate Regulated Industries Committee has scheduled a workshop on the proposal on Wednesday and the House Regulated Industries Committee is drafting an alternative to the compact that is expected to be ready next week. Senate Majority Leader Bill Galvano, R-Bradenton, has predicted that the issue will not get resolved this session. 

One of the Seminole's ad, “Sovereign” highlights the Seminole Tribe’s commitment to Florida, and the second “Letter” focuses on the governor's agreement but continues to echo misleading claims from the governor's letter and suggests that "for the first time" would "empower the Legislature to keep Florida family friendly" and creates "nearly 20,000 new Florida jobs."

There is nothing today that stops the Legislature from "keeping the state family friendly" and there is nothing in the proposed deal that requires the creation of any jobs.

Both ads are running Tampa, Miami, Orlando, West Palm Beach, Jacksonville, Ft Myers, Mobile-Pensacola, Tallahassee, Panama City, and Gainesville.on CNN, FOX, MSNBC and on digital sites.