July 05, 2017

State settles gambling dispute with Seminole Tribe, becomes $340 million richer

Casino@MaryEllenKlas

Blackjack will continue uninterrupted at casinos run by the Seminole Tribe of Florida, parimutuels will be ordered to stop offering controversial competing card games, and the State of Florida will have access to more than $340 million in new money, under a settlement agreement reached late Wednesday between the tribe and state regulators.

Under the agreement, the Seminole Tribe has agreed to continue monthly revenue sharing payments to the state in return for the state’s agreeing to enforce a judge’s ruling that allows it to continue to operate blackjack and other banked card games at its casinos for another 13 years.

The Florida Department of Business and Professional Regulation must also enforce a rule that prevents competing casinos and card rooms from operating blackjack and slot machines that mimic the banked card games the tribe is entitled to operate exclusively in Florida. Story here. 

April 26, 2017

Armando Codina: Voting for a Miami casino without understanding local impact is 'irresponsible'

Armando Codina@MaryEllenKlas

Armando Codina, one of Miami's most prominent developers, is sounding the alarm about the announcement Wednesday that the Florida House has agreed to a Senate plan to bring another casino to Miami-Dade County, arguing that while the revenue will help the state, it will cost the county, and leave the community with infrastructure and social problems. 

"I'm well-informed, but this surprised me how it was snuck in without any public debate,'' said Codina, chairman of Codina Partners, LLC, a real estate investment and development firm based in Coral Gables, in an interview with the Herald/Times.

"These guys are going to send casino money to Tallahassee and leave us with all the infrastructure issues and all the social issues that come with it,'' said Codina, who has long been a critic if expanded gambling in the county. "They are voting for something without any understanding of the impact and without any idea of where the money is going to go. It's a crime being perpetrated on the City of Miami."

Although the details of the proposal remain sketchy, the offer made by Rep. Jose Felix Diaz, R-Miami, at a meeting of the House and Senate gaming conference this morning, indicate that the House has overcome years of resistance and agreed to authorize a new gaming facility in Miami-Dade under certain conditions. 

The new facility must be located at least 5 miles from any existing pari-mutuel facility, must be chosen by a competitive procurement, is authorized to have 1,500 slot machines, is authorized to have a cardroom with designated player games and is required to purchase and surrender to the state at least one pari-mutuel permit. 

He said he has built corporate headquarters for IBM, Office Depot, Ryder Trucks, and Baccardi and "no headquarters wants to be in a place with all the social issues gambling brings."

"With what's happening on the beach and what's happened on Brickell, speaks for itself,'' he said. "For these legislators to talk about casino gaming without telling the public where this is going to go, is irresponsible."

Codina, who once was a business partner with former Gov. Jeb Bush and has been a prolific Republican fundraiser, warned that the decision could have political ramifications.

"If the governor is going to run for the [U.S.] Senate, he has to think through this,'' Codina said. "The message for the governor is this is going to be put on his lap and his legacy is going to be casino gambling."

He also had a warning for local lawmakers seeking re-election: "Any representative that votes for this without understanding all of the impacts of gaming, and where this money is going to be designated, is derelict."

Codina, who at age 70 has nine grandchildren, added: "To me, this is about my grandchildren."

House agrees end to live racing, lower tax rates, and a new casino in Miami-Dade County

Gambling

After years of impasse over how to update Florida's gambling laws to reflect the changing times, the Florida House agreed to a series of major concessions Wednesday, including bringing a new casino to Miami-Dade County, ending the mandate that horse and dog tracks conduct live racing and a willingness to give the Seminole Tribe the ability to offer craps and roulette.

"We know that time is running out, so we wanted to make a substantial offer to the Senate,'' began Rep. Jose Felix Diaz, R-Miami, the House's chief negotiator on the second day of a gambling conference between the chambers.

Sen. Bill Galvano, R-Bradenton, said the proposal "was a substantial offer that tells me that you came in here ready to get the ball moving down the field."

The House proposal allows for an expansion of gambling in South Florida by allowing a new casino to open in Miami-Dade County -- as long as it is five miles away from an existing pari-mutuel, chosen by a competitive bid, results in the surrendering of an active pari-mutuel permit and operates no more than 1,500 slot machines. Malaysian company Genting has said it wants to build a full casino resort on Biscayne Bay on the former site of the Miami Herald building and the Fontainebleau in Miami Beach is also likely to compete for the slots license.

The House would also permit the Seminole Tribe to add craps and roulette at all seven of its casinos and allow greyhound tracks and Calder Racetrack to end live racing, with voter approval.

The House also agreed to a Senate conclusion that slot-machine look-alikes used in bars and convenience stores be designated as Class III games that are not allowed in Florida. The House agrees to lower the tax rate on slot machines as long as casinos reduce the number of slot machines they operate and authorizes designated player card games with strict new provisions.

The proposal brings the House farther than it has in years by agreeing to so-called "decoupling" -- the requirement that greyhound tracks, harness race tracks, quarterhorse and designated thoroughbred tracks no longer have to conduct live racing as a condition of their gambling permit. Of the three thoroughbred racetracks, only Calder Racetrack wants to stop racing.

A condition of the decoupling is that the track get local approval to end the racing through a countywide referendum. The House also scales back the Senate decision to authorize two new casinos, one each in Miami-Dade and Broward, by authorizing only one in

The offer, made on the second day of formal negotiations over gambling legislation aimed at renewing the state's gambling compact with the Seminole Tribe, brought the two chambers significantly closer after to each chamber passed two bills aimed at renewing the compact with the Seminole Tribe, but which had been dramatically different since the start of the session.

Still unresolved is the fate of the eight counties that have conducted voter referendums approving adding slot machines to their horse and dog tracks and jai alai frontons.

The House also agreed to a Senate proposal to negotiate with the Tribe a provision that the Legislature would be given two years to cure any alleged violation of the compact. The House proposed that if the state regulates Daily Fantasy Sports, the Tribe can offer it but it would not be considered a violation of the compact.

Galvano said the Senate will return later today with its counter offer.

Izzy Havenick, vice president of Magic City Casino which has lobbied for decoupling for years, was pleased with the development.

"We've been asking for eight years to give us a road map so we know what direction to go for our business,'' he said. He noted that they have 32 acres in the heart of Hialeah and the options for economic development are great.

"Retail, entertainment, David Beckham is still looking for a stadium -- we just want to do something with the property,'' he said.

Winn Peeples, lobbyist for the Brunetti family which owns Hialeah Racing and Casino said the proposal is "progress, but we've got a lot to digest."

John Sowinski, president of No Casinos, criticized the compromise.

"This conference committee process is a prime example why gambling expansion should not be subject to legislative 'sausage making' as it results in gambling creep,” he said. "It is clear that there needs to be a bright line in the Florida Constitution that gives Florida voters the exclusive right to authorize gambling in our state."

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.