February 22, 2016

Bob Graham argues in Gretna gambling case: No slots without statewide referendum

 

Bob GrahamAs a member of the state House when Florida rewrote its constitution in 1968, former U.S. Sen. and Gov. Bob Graham believes a lot of people are missing the point in the current gaming debate.

Graham filed a friend of the court brief on Monday in the case involving Gretna Racing LLC, arguing that the Legislature, Gov. Rick Scott's administration and the company that is trying to get a slots permit in the rural community, have misread the Florida Constitution. His argument: there is no authority to open the door to additional slot machines, or any other forms of gambling, without a statewide referendum and the court should reject Gretna’s argument. Download Amicus Curiae Initial Brief

It's the third argument offered in what is shaping up to be a landmark case before the Florida Supreme Court this spring. It could have immediate implications on the gaming compact signed between Scott and the Seminole Tribe and the legislative debate over expanded gambling.

The court, which has not yet scheduled oral arguments in the case, is being asked to decide if Gadsden County -- and by extension, any other county -- has the right to offer slot machines via voter referendum without legislative approval.

Gretna Racing, a consortium with the Poarch band of Creek Indians, argues that it should be allowed to install slot machines at its cardroom and race track along Interstate 10, 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. 

Continue reading "Bob Graham argues in Gretna gambling case: No slots without statewide referendum" »

February 19, 2016

Gambling future at crossroads as tech generation loses interest in slots

Slots Magic Cityby @MaryEllenKlas and @JeremySWallace

For years, the owners of the dying dog and horse racing industries have seen salvation in the cherry-spinning fortunes behind slot machines.

Their vision was to convert their vast real estate into bold entertainment venues with blue-lighted rooms lined with slot machines, some offering dog racing as a novelty, or thoroughbred derbys as a nostalgic draw.

 

But as Florida legislators decide whether to ratify a deal with the Seminole Tribe that cements into place the parameters of gaming in the state for the next 20 years, no one is talking about one thing: Slot machines are declining, too.

Market research studies show that the massive Millennial generation, those 21- to 34-year-olds who outnumber Baby Boomers, consider slot machines boring and table games only slightly more appealing. The studies show they prefer theme parks and restaurants, adventure travel and games of skill. And, the researchers warn, unless the gaming industry finds a way to capture this tech-savvy generation with online gambling or games delivered to their homes and offices through smartphones, even the games they are hoping to rescue them will die. Story here. 

 

February 16, 2016

Negron is confident he has 'cobbled enough votes together' to pass amendment to expand slots to several counties

A confident Sen. Joe Negron, R-Stuart, said Tuesday he has the votes to pass his controversial amendment to allow six counties who have who have already conducted voter-approved referenda to operate slot machines at their parimutuels.

The amendment, before the Senate Regulated Industries Committee on Wednesday, would authorize the governor to re-negotiate a gaming compact with the Seminole Tribe to allow for the expanded games in Brevard, Gadsden, Hamilton, Lee, Palm Beach and Washington counties, in return for a lower revenue-share than the $3 billion the tribe has guaranteed.

The amendment, if approved, would be attached to SB 7074 to ratify the rest of the gaming compact with the tribe and accompany a second bill, SB 7072, that would authorize the expansion of slot machines in the six counties, and a handful of other communities that conduct future referenda on slots within a certain time frame, Negron said.

"The voters have approved it,'' he said. "I don't think the government should stand in the way of voter preferences that have been expressed at the ballot box. It's particularly ironic when the State of Florida is running a $5 billion a year numbers game called the Florida Lottery. We are a state that has gaming, including voter-approved lottery, so to me if communities have approved it I don't see why the Legislature would stand in the way if citizens elect to spend their discretionary entertainment dollars."

He said he considers the existing requirement that ties slot licenses to operating horse and dog racing "anachronistic to me" because the sports are on the decline.

He said he will also amend the compact bill, SB 7074, to allow for regulated daily Fantasy Sports betting in Florida without interfering with the tribe's revenue share. He is offering an amendment that will attach his bill to regulate Fantasy Sports to SB 7072, Bradley's companion bill that revises regulations of the pari-mutuel industry. The new regulation would come under a new Office of Amusements, housed in the Department of Business and Professional Regulation -- which also houses the Division of Pari-mutuel Wagering. The office would impose a $500,000 licensing fee on all Fantasy Sports operators to pay for the new bureaucracy.

"There are ongoing discussions about where we are going to land,'' Negron told reporters Tuesday after meeting with Gov. Rick Scott on budget issues. He said he will continue to work with Sen. Rob Bradley, R-Fleming Island, who was involved in the negotiations of the draft proposal. "But everyone understood at the outset that that was the beginning point."

His amendment will allow for each of the six counties who have already conducted voter-approved referendums to operate slot machines at their parimutuels to get a slots permit and would reduce the tax rate on slot machines from 35 percent to 25 percent.

The additional tax revenues from those expanded games would then offset the loss in revenue from the gaming compact with the tribe. Under the initial proposal, the tribe would guarantee the state $3 billion a year for the exclusive right to operate blackjack, craps and roulette at its seven casinos. If the state authorized two additional slots permits at Palm Beach and Miami-Dade, the tribe would not reduce its revenue share. 

"The tribe has to look at the benefits it is getting for exclusivitity and additional games and the opportunity for expanded business opportunities and what they're willing to give up,'' he told reporters on Tuesday. 

He said there has not been an official fiscal note on his amendment "but we have some rough ideas of what additional revenue would come from some of the pari-mutuels that have additional slot opportunities and how that offsets'' the revenue from the tribe.

Negron's plan also gives industry players pieces they have sought for years. Casinos in Miami-Dade and Broward would get up to 25 blackjack tables, 

Negron said he supports the compact and wants it to pass. "I think the compact is in the best interest of Florida moving forward,'' he said, adding that his amendment will also "extinguish some potential gaming licenses" to retract the gaming footprint "which is important to some members of the committee."

"The Seminole Tribe wants a compact to pass and they've known all along there would be modifications and revisions,'' he said. "So we're just trying to cobble together enough votes out of the committee tomorrow." 

Negron said that he and Scott did not discuss the compact during their brief meeting on the tax cuts and economic incentives. 

 

February 09, 2016

House committee passes bills to ratify compact, expand - and contract - gambling, and then shut the door

@Mary Ellen Klas and @JeremySWallace

The House Regulated Affairs Committee on Tuesday accomplished what has been virtually impossible for the conservative House to do in the last decade: pass a bill that expands gambling in Florida.

The committee not only gave the nod to one bill -- ratifying the agreement between  Gov. Rick Scott and the Seminole Tribe to expand casino games on their reservations -- it also approved an ambitious gambling bill that tightens loopholes in the state's gambling laws but expands casino games at parimutuels in Miami Dade, Broward and Palm Beach counties.

Then, to punctuate the message that any future gambling should face very steep hurdles, the committee passed a bill to require that any future attempt at expanding gaming in Florida must receive statewide voter approval -- through a citizen-led initiative.

The House's ambitious suite of proposals were "a work in progress,'' said the sponsor, Rep. Jose Felix Diaz, R-Miami, the chairman of the committee. They are designed to find the sweet-spot to appease the viciously factional gambling industry in the face of the newly-inked agreement with the Seminole Tribe. That agreement promises to bring in $3 billion over seven years starting next year and would help the governor win over critics of his hard-fought tax cut plan.

"Doing a gaming bill is like putting a queen-size sheet on a king-size bed,'' Diaz joked at the close of the three-hour meeting He noted that with every shift in one place, you lose traction in another. "It's impossible to accommodate the interests of every single person." 

That became immediately apparent when the traditionally more gaming-friendly Senate put the brakes on its plan. Sen. Rob Bradley, R-Fleming Island, who had hoped to present his gaming bill in the Senate Regulated Industries Committee on the same day Diaz presented his plan in the House, announced the Senate Regulated Industries Committee would instead take up the issue next week.

A last-minute 40-page amendment by Sen. Joe Negron, R-Stuart, added new drama to the deal. Negron's amendment allows the six dog and horse tracks outside of Palm Beach County who have won voter approval to operate slot machines to operate the games, and it also attempts to appease the concerns of the Florida horse breeders and owners by using $50 million proceeds from the compact to increase racing purses for the thoroughbred industry. The House bill, by contrast, offers only $10 million. 

"Basically we wanted to have some time to digest the amendments that were filed over the last several hours," Bradley told reporters after the meeting. He added that while his "full intention" is to have it up next week, budget discussions could consume lawmakers and push any final compact deal to the final week of the legislative session before they can address it. 

"All the same challenges that existed six months ago, one month ago, one week ago, still exist today,'' Bradley said. "So we are still poised and still have plenty of time to complete a compact radification as well as comprehensive gaming legislation. There is plenty of time. "

Both the House and Senate bills not only allow Palm Beach Kennel Club to compete for a slots license, as well as Genting and the Fountainbleau in Miami, they also lower the tax rates for all pari-mutuels that operate slot machines, remove the requirements that greyhound tracks race greyhounds, and they both gives video race terminals to other horse and dog tracks outside of South Florida.

Both plans also remove the requirement that quarter horse tracks like Hialeah Race Course and Pompano Harness track, as well as Calder Race Track, continue horse racing to retain their slots license and the increase the purse pool so that the existing races can become more lucrative. 

That proposal, however, drew vociferous opposition from horse breeders and owners who traveled to Tallahassee to protest. 

Tonya Jurgens, a horse breeder and trainer from Ocala said the provisions that remove the requirement for horse racing at some facilities is a betrayal of the promise the pari-mutual industry made in 2004 when they asked them for their support to win voter support for slot machines.

"The casinos asked us to join them. I feel like the girl with the dowry,'' she said. "Now that they are making big corporate profits they want to kick us to the curb but use our dowry."

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?