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Tribe to Legislature: You regulate, not ban, Internet Cafes, you lose our cash

As the bill to bring resort casinos to Florida appears doomed, the legislative battle shifts to the debate over whether legislators should regulate or outlaw the slot-machine look alikes operated by the so-called Internet Cafes under a loophole in the state's sweepstake's law.

As that debate moves to center stage, a legal opinion written for the Seminole Tribe of Florida dated Feb. 1 could be a game changer.

" is our opinion that SB 380/HB 467 would authorize the play of gaming devices that would violate the Tribe's exclusivity,'' wrote Joseph Webster of the Washington, D.C. firm of Hobbs, Staus, Dean & Walker in a five-page letter to the tribe's general counsel Jim Shore.

Webster concludes that if the legislature approves and the governor signs SB 380 and HB 467 which would regulate the slot-style games, the state would violate the compact -- specifically, the provision that gives the Seminole Tribe the exclusive right to operate slot machines outside of Miami-Dade and Broward -- and allow them to withhold payments to the state. Another of the tribe's lawyers, Barry Richard, reviewed Webster's conclusions and wrote, in a separate letter, that he agreed.

The tribe is scheduled to give Florida $233 million this year for its right to operate casino games at its Hard Rock casinos and slot machines at all seven of its reservations.

The bills, sponsored by Sen. Miguel Diaz de la Portilla, R-Miami, and Rep. Eddy Gonzalez, R-Hialeah, allow for the state to authorize and regulate "electronic devices or computer terminals with video display monitors" in connection with "game promotions." But, Webster said, the Tribe's exclusivity clause "includes games that are similar to video lottery terminals."

"In our opinion, the fact that the sweepstakes entries are provided when a player purchases a product, such as a phone or internet time (which we are advised is often the case) or through some limited number of 'free' entries, does not remove the devices from the zone of the Tribe's exclusivity."

The opinion also suggests that the games used by these Internet Cafes were not permitted when the Tribe signed compact in 2010 and should not be permitted now. A bill banning the games is being sponsored by Rep. Scott Plakon, R-Longwood, and Rep. Steve Oelrich, R-Alachua.

"In summary, SB 380/HB467 would amend Fla. Stat. 849.094 to permit a nearly unlimited number of video slot-style gaming devices,'' Webster wrote. "The operation of such games would, in our opinion, constitution (cq) a violation of the Tribe's Compact exclusivity. Depending on the specific implementation, the operation of such devices would entitle the Tribe to reduce or end its payments to the State pursuant to Part XII of the Compact."

Another opinion, by the Carlton Fields law firm on behalf of International Internet Technology, which sells its software to many of the Internet cafes, had a different conclusion, saying the regulation of these machines would not violate the tribal compact. Download Carlton Fields opinion

Left unanswered is this: if the state doesn't shut down these Internet Cafes now that this issue has prompted the Tribe's attention, can the Seminoles stop paying the state? Stay tuned.