After five years of quietly writing a monthly check to the state as part of the landmark gaming compact that gave them the exclusive right to operate black jack, chemin de fer and baccarat at their Hard Rock casinos, Gov. Rick Scott and the Florida Legislature have sent a signal that they may not renew the deal when that portion of their agreement expires in July.
In an effort to make the case to continue the deal that drew at least $1 billion in revenue for the state over five years, the Tribe has broken its silence.
In the last month, it paid for a statewide television ad, espousing the value of the gaming compact. It financed a statewide poll, that showed that most voters support continuing the gaming compact. It launched a lobbying campaign to “educate” legislators about why provisions in the compact stifle the gaming “creep” that happens when states allow non-tribal gaming to expand.
And on Wednesday, the tribe’s general counsel and chief executive agreed to a rare on-the-record interview with the Herald/Times Tallahassee bureau and the News Service of Florida.
“We want to see if there is a way to extend the contract before it expires. We’re still early in the game,'' said Seminole General Counsel Jim Shore. "We’re trying to figure out where everybody is on the compact or gaming issue.”
Here’s what we learned:
1. After the Gov. Rick Scott negotiated a compact with the Tribe last April, and it was rejected by Legislative leaders in the final week of the session, he has halted all negotiations, telling Tribal leaders instead to talk to the Legislature.
“In January when we asked to restart the negotiation, he told us to talk to the Legislature – the House and the Senate – so we haven’t had any direct communication with the governor since then,’’ Shore said.
He said they have spoken with Rep. Dana Young, the House Republican Leader, and Sen. Rob Bradley, the chairman of the Senate Regulated Industries Committee, and they spoke about “general conversations” but no detailed discussions “for a couple of weeks or so.”
“Someone will hopefully start talking to us so we are just in the process of educating the legislators, the public, the media as well,’’ he said.
2. Although the law requires the governor to sign the compact and the Legislature to ratify it, having lawmakers handle the negotiations is not perceived as a risky place to be for the Tribe.
“We’ll leave that up to the governor and Legislature and we just hope to work out something with someone,’’ Shore said.
3. The Senate, governor and House’s decision not to expect $116 million a year from the card games portion of the compact in their draft budgets is considered “just posturing;” as is the House’s mega bill to expand gambling.
“We’re hoping all this is just posturing and, once we get down to some serious talk, they will be flexible and we will be flexible on all issues of the compact,’’ Shore said.
The House bill includes something “for everyone – but not the Tribe,” said Jim Allen, Seminole Gaming Chief Executive Officer, and if “that’s what the state wants to do, there is no more relationship with the Seminole Tribe.”
4. The Tribe does not rule out the potential that it may be a potential bidder if the state authorizes destination resort. But, it argues, expanding the Tribe’s footprint is a better bet.
“If the state of Florida wants to do destination resorts, we’ve always respected that,’’ Allen said. “We feel we have a product that competes with anybody in the world. The Tribe has openly stated it would be happy to expand its operations as long as it understood what the scope of gaming and the competitive landscape was.”
But, he added, “we’re always amazed when somebody says well let’s do destinations when the state has this amazing opportunity to continue to grow their relationship with the Tribe.”
5. The Seminole's argue that Florida's compact is already one of the best in the nation, with a 25 percent revenue share that is exceeded by not other state, and they believe could return as much as $400 million a year into the future.
“The numbers speak for themselves,’’ Allen said. “I don’t think we would dispute that if the state wanted to put four, five, six, whatever destination resorts around the state – be the Panhandle, Tampa, Jacksonville, Miami-Dade and Broward – that math may tell the state it may be able to make more money there.”
But, he acknowledged, if that happens the Tribe’s revenue share payments to the state would cease and “the Tribe would be saving somewhere, we believe, on the low side $280-$300 million and when we look at our projections we think that number gets up to in excess of $450 million and the Tribe would obviously have that money to compete with the other destination resorts.”
6. The Seminole’s presence in Miami Beach is not a sign that they are intent on becoming a gaming operator there.
The Hard Rock’s involvement as a sponsor of the Miami Beach 100-year Centennial is not the Tribe’s gaming division but through Hard Rock International.
“We’re not talking about casinos. Miami Beach is obviously very opposed to any gaming and we recognize that,’’ Allen said. “But if we look at the Hard Rock brand, we’re opening six hotels around the world and only one of them has gaming. We think Miami Beach would be an amazing opportunity if we just wanted to expand the hotel brand. We certainly have a café down there but it has nothing to do with the Tribe’s gaming operation.”
7. They believe one of their strongest arguments is giving the Tribe exclusive access to games serves as buffer against gaming “creep” that results in the slow-expansion of gambling in return for less revenue.
“Those who are opposed to any expansion of gaming – Disney, the Florida Chamber or the Florida Hotel/Motel Association – are all supportive of the compact because it eliminates that possibility,’’ Allen said.
8. The Tribe’s new public relations strategy is a reflection of the changing landscape.
“Five years ago it was a different ballgame,’’ Shore said. “Every five years things change…and we think the compact was good and we want to be able to do whatever it is that we can to promote that goal of the Tribe.”
Allen said that when the Tribe first negotiated the compact eight years ago there was a question of whether it would work. “Not only do the fact tell us that the Tribe not only met but exceeded all its promises and goals – from a regulatory standpoint – there’s been zero issues,’’ he said.
Their business success has resulted in a $2.4 billion positive impact on the state, he said, and proven to be “beneficial.” The company enjoys high ratings from all rating agencies and its leverage “is the lowest in the industry.”