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Senate committee passes gaming bill but House warns bill may be getting heavy

by @MaryEllenKlas and @JeremySWallace

After the chairman of the Senate Regulated Industries Committee made a rare written appeal to his Senate colleagues, the committee voted to ratify a compact with the Seminole Tribe Wednesday but then defied one of the central provisions of the deal and authorized at least six additional slots licenses across the state.

The result demonstrated that the Senate was ready to advance the controversial gaming compact -- a signal House leaders needed before putting the measure on the House Finance and Tax Committee agenda on Monday.

But because both the House and the tribe are expected to reject the additional of six new slots licenses, the Senate's action leaves uncertain the fate of the $3 billion gaming deal worked out by Gov. Rick Scott and the Seminole Tribe.

"This is a work in progress and I suspect the final landing place -- if there is a final landing place -- will look a little different as we negotiate with the House, the governor and the tribe,'' said Sen. Rob Bradley, R-Fleming Island, the chairman of the Senate Regulated Industries Committee after the vote.

Rep. Jose Felix Diaz, R-Miami, who worked with Bradley and the governor's office in negotiating the deal with the tribe, said the House must determine the impact of the Senate's changes to the ability of the state to get the revenue sharing it needs from the tribe.

"There's definitely a point where the bill gets too heavy, I don't know if we are there yet or not,'' Diaz said Wednesday. "There is a lot to digest on our end. We do have to score it and see what impact it would have for our budget."

Bradley was clearly satisfied that he succeeded in getting a bill out of the sharply-divided Senate committee, which includes both gaming opponents and those determined to protect the pari-mutuel industry. But he acknowledged that by allowing for expanded slot licenses, it is possible that nothing could pass this session.

That is a prospect Bradley warned about in a three-page letter to the members of his committee Wednesday.

In an unusual move, he penned the letter to urge his colleagues to consider the fact that if the Legislature fails to ratify the compact, two pending court cases could imperil the Legislature's ability to regulate gaming and the state could lose the revenue sharing money from the tribe.

"If the Legislature punts, we could end up with the most significant expansion of gaming in Florida history while the taxpayers only get a fraction of what they receive from gaming operations in the present arrangement,'' Bradley wrote.

Bradley was referring to a lawsuit brought by Gretna Racing, LLC, which is suing to obtain a slots license based up on a referendum approved by voters in Gadsden County. If the court agrees with Gretna Racing, communities across the state could hold referendums to allow their dog and horse tracks to obtain slots permits and the state would have no choice but to issue them, Bradley argued, thereby jeopardizing any revenue sharing now authorized from the gaming compact.

The second lawsuit is brought by the Seminole Tribe, which accuses the state of allowing pari-mutuels to operate banked card games in violation of the current compact. It is arguing that it is not obligated to pay revenue sharing to the state as a result.

The committee voted 9-3 for SB 7074 which ratifies the gaming compact, guaranteeing $3 billion over seven years in exchange for giving the tribe the exclusive right to operate blackjack, craps and roulette at its seven casinos.

Under the deal, if the state authorizes two additional slots permits -- in Palm Beach and Miami-Dade counties -- the tribe would not reduce its revenue share. 

The committee then took up a bill to authorize those and other changes. The bill, HB 7072, removes the requirement greyhound tracks, harness and quarter horse tracks and jai alai permit holders operate their games and races into order to hold a card room or slots permit. It requires injury reporting at existing greyhound tracks within seven days of the injury, lowers the tax rate on slot machines from 35 to 30 percent, and authorizes additional slots permits in Miami Dade and Palm Beach.

The bill allows state regulators to use the proceeds from the gaming compact to spend up to $20 million to buy back inactive permits in an attempt to reduce the footprint of gaming.

But Sen. Joe Negron, R-Stuart, argued that arrangement was unfair. He offered an amendment to allow six counties -- Brevard, Gadsden, Hamilton, Lee, Palm Beach and Washington counties -- which have already conducted voter-approved referenda to operate slot machines at their pari-mutuels.

The amendment also authorizes the governor to re-negotiate a gaming compact with the Seminole Tribe to allow for the expanded games, in return for a lower revenue-share than the $3 billion the tribe has guaranteed.

To boost the state's thoroughbred racing industry, the amendment also creates a $20 million annual purse pool financed by proceeds from the compact and another $25 million purse pool paid for by subsidies from the horse and greyhound tracks that operate slot machines but no longer run dogs or horses.

Negron said there would be an annual net increase in revenue to the state from the changes in the measure -- including the six additional slots permits -- of between $90 million to $120 million a year.

Sen. Jack Latvala, R-Clearwater, endorsed Negron's proposal saying it was an effective way to send a message to the tribe that the Legislature, which must ratify the compact, wanted more expanded games for its long-running industries.

"I don't think there's anything wrong with telling the tribe what we want as a Legislature,'' Latvala said.

But Bradley said he opposed the amendment because "it expands gaming more than I'm comfortable with."

The committee approved the amendment, with Bradley among those voting no.

Bradley noted it has taken years to find agreement on in the Senate "because there are so many diverse opinions in the Legislature. All the challenges that were in place last week, two years ago, are still in place today. But I tell you, we are closer to get something done today than we were yesterday."

Negron also tried and failed to pass another amendment to SB 7072 that would have added his bill to declare daily fantasy sports games legal in Florida and impose a regulatory structure within the Department of Business and Professional Regulation.

Negron said he is still hopeful that his bill to regulate the industry can still get through the Legislature, though there is less than four weeks to get it moving. That bill would require daily fantasy sports companies to pay $500,000 to register in Florida and provide assurances their games are fair contests with real winners.  The bills has passed one committee, but has two more to get through before it could make it to the floor of the Senate. A similar bill in the House, has cleared two committees, with still another committee to get through before it can go to the floor of the House.

“I’m optimistic we can get it passed,” Negron said.

Staff writer Kristen Clark contributed to this report