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Thursday, Oct 02, 2014
Business News

State eyes gambling expansion gingerly, fears losing Seminole money


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TALLAHASSEE — Money is addictive, and a cool $200 million or so a year is usually impossible to resist.

But that’s what your state lawmakers could be passing up if they choose to expand gambling in Florida.

The state’s deal with the Seminole Tribe of Florida guarantees it a minimum $1 billion cut of revenue from the tribe’s gambling income over five years. The tribe operates Tampa’s Seminole Hard Rock Hotel & Casino and other gambling facilities across the state.

But the agreement, known as the Seminole Compact, also guarantees the Seminoles exclusive rights to offer Las Vegas-style gambling outside Miami-Dade and Broward counties. If they lose that exclusivity through expanded gambling, the Seminoles don’t have to pay another dime.

Their 2013-14 payment alone is estimated at $233 million, with $226 million going to the state and $7 million to local governments.

With a new study suggesting a minor economic lift overall from more gambling in Florida, lawmakers may have to think hard before pulling the trigger on new gambling.

The study and comments from upcoming public workshops are supposed to be blueprints for a big gambling bill during the 2014 legislative session, including whether to allow Las Vegas-style destination casino-resorts.

Last year, a bill died in the Legislature that would have permitted the construction of three destination hotel-casinos in South Florida.

The Senate gaming committee is scheduled to meet Monday to discuss a working draft of the gambling report, authored by New Jersey-based consultant Spectrum Gaming Group. The final version is due Nov. 1. The public workshop closest to Tampa is 3 p.m. Oct. 30 at the George Jenkins High School auditorium in Lakeland.

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Spectrum suggests “that the introduction of casinos, whether standalone destination resorts, or addition of slot machines at existing parimutuels, will lead to modest economic benefits,” its report said.

The part of the compact that gives the Seminoles the right to offer certain card games, such as blackjack, expires in 2015 unless reauthorized. They do not want to let it go and are willing to spend big to keep it, recently contributing $500,000 to Gov. Rick Scott’s re-election, for example.

“The Seminole Tribe worked for two decades to secure a gaming compact with the state of Florida that provided a more stable future for the Tribe and its members and allowed for significant sharing of gaming revenue with the state,” tribal spokesman Gary Bitner said. “The tribe wants to maintain that steady, stable course through 2015 and beyond.”

State Sen. Bill Galvano, a Bradenton Republican who represents parts of Hillsborough County, sits on the gaming committee and worked on the compact when he served in the House.

“These issues are so complex and there are so many competing interests; it’s not something you can rush,” Galvano said. “The idea is to really understand the gaming industries within the state of Florida and their potentials. Also, the gaming laws are not uniform; they’ve been put together piecemeal.”

The problem with cleaning up the regulations is that any changes could run afoul of the compact.

“A change to the compact is not something that can be accomplished overnight,” Galvano said. “You’re talking about a negotiation between two sovereigns … and (it) has to have federal approval.”

But plenty of interests beyond this tight group want a piece of the action.

Campaign contributions in Florida from gambling concerns totaled more than $2.8 million for the 2012 election cycle, according to the National Institute on Money in State Politics. Hartman and Tyner Inc., which runs Mardi Gras Casino on Broward County’s Hollywood Beach, gave $67,400 alone.

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Dan Adkins, Hartman and Tyner’s chief operating officer, said he doesn’t envy lawmakers. His business could benefit by adding games besides the slots, poker and dog racing it now offers, but he acknowledges the allure of the Seminoles’ easy money.

“If I were in the Legislature, that’s a tough one,” Adkins said. “Cash on the table is hard to turn away from.”

The money train first tried to get rolling in 2007. The Seminole Tribe and then-Gov. Charlie Crist inked a deal that was later challenged by the House of Representatives on separation-of-powers grounds and ultimately invalidated by the state Supreme Court.

Crist and the Seminoles signed a revised agreement in 2010, bumping up the state’s guaranteed share. The compact allows slots and card games, but prohibits roulette or craps.

The federal law governing Indian gambling defines three classes of play: The first is “social games solely for prizes of minimal value;” the second is made up of bingo and some card games; the third includes “banked” card games, such as baccarat and blackjack with house dealers, as well as slot machines and virtually everything else.

“Class III,” as insiders call it, is where the money is.

“Why should we have a disadvantage in product with what the tribe has?” Adkins said. “We’re in a competitive market; let us compete.”

Adkins added that though he thinks any new gambling should be approved by voters on a county-by-county basis, he’d be “ready in a heartbeat” for full-blown Vegas-style play.

“Give me a level playing field and I’ll give you a business plan,” he said.

Peter Berube, Tampa Bay Downs’ general manager, would be happy with slot machines to boost his thoroughbred track’s purses — the money paid out to the owners of horses.

The compact allows for slots only at other pari­mu­tuels — dog and horse tracks — in Broward and Miami-Dade counties.

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Slots revenue would help him attract better horses from across the country — and presumably would stoke more wagers. Only about 20 percent of horses racing at Tampa Bay Downs come from within Florida, he said.

“Money talks,” Berube said. The Florida “sunshine is good, but at the end of the day, money is what the drives the horsemen on where they decide to race.”

Even though Tampa Bay Downs already brings a lot of economic muscle to the area, he added, “we’d just like the opportunity to offer Class III gaming and determine what the makeup of that would be.”

Berube figures that income from slots could increase his purses from $175,000 to $275,000 over the track’s main season from Dec. 4 to May 4.

Meantime, lawmakers are mindful that whatever they do is likely to fuel a lawsuit.

“The competition among gaming entities, historically, has risen to the level of legal challenges and regulatory challenges, and that’s something we also have to be mindful of as we navigate this issue,” Galvano said.

And the Seminoles have too much to potentially lose.

The Hard Rock in Tampa has undergone multiple expansions over the past few years, Bitner said, with the latest being “a new high-limit area of the casino and another created especially for our Asian guests.”

“It is now the fourth- largest casino in the United States, based on the number of gaming positions (seats at table games and slot machines), and the sixth-largest in the world,” Bitner said. “Executives at Seminole Gaming are always considering opportunities to expand the Tribe’s Tampa casino complex.”

So the likelihood of putting together a plan and having it universally accepted isn’t high, Galvano said.

“I don’t see that there’s a quick and easy resolution,” he said.

jrosica@tampatrib.com

(850) 765-0807

Twitter: @jlrosicaTBO

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