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Jai alai permit may endanger state's Seminole gambling compact

TALLAHASSEE — Miami could be home to South Florida's eighth slots-and-poker casino long before any destination gambling resort breaks ground, under a permit quietly sought by the owners of Flagler Dog Track and Magic City Casino and approved by state regulators.

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Flagler lawyer John Lockwood uncovered a never-used loophole in a 30-year-old parimutuel law and used it to persuade the state Division of Parimutuel Wagering to give West Flagler Associates a permit to operate summer jai alai — and potentially slot machines. The company owns Magic City Casino and would operate its new facility as Magic City Jai Alai.

The fresh permit comes loaded with advantages legislators never imagined in 1980, when the law was first written. For starters, it comes with an opportunity to build a new jai alai fronton and poker room anywhere in Miami-Dade County, including downtown Miami or Miami Beach.

It also comes with the chance to operate slot machines — the result of a 2009 law that opened the door for Hialeah Racetrack to operate slots after Miami-Dade voters authorized them for three other parimutuels in the county. If West Flagler decides to pursue the lucrative Las Vegas-style slot machines, jai alai would become a sideline.

"This permit doesn't change the gaming debate, because West Flagler hasn't decided what its intentions are with the permit,'' Lockwood told the Times/Herald on Monday. "We are trying to decide what makes sense for the client."

The decision by state regulators to grant the jai alai permit came just days after two state legislators filed a bill designed to limit the expansion of parimutuel and strip-mall gambling in Florida and replace them with mega casinos, known as "destination resorts."

The permit could affect the state's revenue sharing compact with the Seminole Tribe, which says that if slot machines are awarded to more than four parimutuels in Miami Dade County, the tribe can cease paying the state. Magic City Casino, Miami Jai Alai and Calder Racetrack now operate slot machines, and soon Hialeah Racetrack will operate them as well.

The tribe is expected to pay Florida $233 million next year in exchange for its exclusive operation of black jack and other banked table games at its seven casinos, and is scheduled to make similar payments for up to 20 years.

This is the second decision by state regulators that has allowed the expansion of gambling using parimutuel permits, and both of them could threaten the compact.

The state previously awarded a horse racing permit to Gretna Racing LLC, a company whose primary financing comes from the Poarch Band of Creek Indians in Alabama. The Gretna company will ask the Gadsden County Commission on Tuesday to conduct a referendum during the Jan. 31 presidential preference primary to allow slot machines at the horse track.

If the referendum succeeds and the state grants Gretna a permit to operate slot machines, the conditions of the compact will be violated and the state could stop receiving money from the tribe.

Lockwood believes Gretna's potential for getting slot machines poses a greater threat to the compact at this point than West Flagler's jai alai permit. Just as the state couldn't deny West Flagler a jai alai permit, he believes it will not have grounds "to deny that they would be qualified for a slots permit,'' he said. "The tribe would absolutely stop payments."

Mary Ellen Klas can be reached at meklas@MiamiHerald.com or on Twitter at MaryEllenKlas.

Jai alai permit may endanger state's Seminole gambling compact 10/31/11 [Last modified: Tuesday, November 1, 2011 1:58pm]
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