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Florida lawmakers ready to approve gambling laws but legal challenges await

If a court strikes down the provision opening the state to legalized sports betting, the Tribe has agreed to keep paying the state in order to continue its other new games — such as roulette and craps.
Guests play slot machines. The Seminole Hard Rock Hotel & Casino in Hollywood.
Guests play slot machines. The Seminole Hard Rock Hotel & Casino in Hollywood. [ MIKE STOCKER | South Florida ]
Published May 18, 2021|Updated May 18, 2021

TALLAHASSEE — A sweeping gambling deal that allows mobile sports betting anywhere in Florida neared completion Tuesday, but one big question remained: Is it legal?

On the second day of a week-long special session to ratify the agreement between the state and Seminole Tribe, a House committee and the full Senate voted to create a new state agency called the Gaming Control Commission and agreed to allow the Tribe to offer online sports betting as well as full casino games in exchange for at least $500 million a year in payments to the state for the next 30 years.

“We got a great product, and I think that the court system will have their turn on it now,” said Senate President Wilton Simpson, R-Trilby, after the Senate voted 38-1 for the compact. “We will see if it holds up. I have a lot of confidence that it will.”

Legislators offered little friction or push back on the so-called gambling compact, which was heavily lobbied by Gov. Ron DeSantis and Lt. Gov. Jeanette Nuñez. Even the most conservative members voted for it as Republican leaders worked to assuage their concerns quickly. They expect to adjourn the special session Wednesday.

“The vote that we take on the compact will be most likely the most consequential vote any member will take in their time in the Legislature,’' said Rep. Randy Fine, R-Palm Bay, chair of the House Select Committee on Gambling. Because it’s a 30-year deal, he said, “we have to get it right.”

The House and Senate advanced identical copies of a bill that ratifies the compact and another to create a five-member Gaming Control Commission to regulate gaming. But the House changed another bill intended to allow card rooms and slots casinos to operate without jai-alai matches, harness, and quarter-horse racing, setting up the need to reconcile the differences between the bills.

Rep. Dan Daley, D-Coral Springs, the son of a standardbred horse trainer, successfully appealed to his colleagues on the House Select Committee on Gaming to restore the requirement that Pompano Park be operate live races for tracks to offer card games and offer sports betting through the Tribe’s server.

Repealing the live racing provision, he said, would affect the 10,000-person industry and destroy their livelihoods.

“These are hard-working folks who work day in and day out with their families... to make ends meet and make the business that they love work,’' Daley said. “That’s what I did.”

Is it a constitutional conundrum?

Despite warnings that the compact with the Tribe sets the state up for expensive litigation over whether it is unconstitutional, Florida legislators were persuaded that the agreement creates a successful work around.

The Tribe and the governor say that because all sports bets will go through an internet server on tribal land and because the Constitution allows for new games if they are included in a tribal compact, then the deal does not violate the Amendment 3 provision in the state Constitution. That provision requires that before the state approves any expansion of gambling, it must be approved first by voters in a statewide referendum.

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But even the Tribe’s officials acknowledged it’s an unsettled legal question.

“We certainly think we understood what the intentions were of Amendment 3, but candidly, we could be wrong,’' said Jim Allen, CEO of Seminole Gaming at a meeting of the House Select Committee on Gambling. Under questioning, he added: “We recognize there’s a good chance it could happen.”

Unlike the previous compact, signed by then-Gov. Charlie Crist and the Tribe in 2010, if a court strikes down the provision opening the state to legalized sports betting, the Tribe has agreed to keep paying the state in order to continue its other new games — such as roulette and craps.

Allen said they expect profits from those games will allow them to give the state as much as $400 million a year and only after year two or three of the compact would they start getting profits from sports betting, which he estimated at $100 million a year.

The Tribe’s lawyer, Joe Webster, explained, however, that if the Legislature authorized sports betting and got statewide voter approval, the Tribe could stop all payments. If any new games were authorized through a citizen initiative to the Constitution, the Tribe would not stop paying, he said.

It was clear on Tuesday that the prospect of litigation was already on the minds of lawmakers.

Before the Senate approved the gaming compact, Republican leaders used a procedural move that Sen. Gary Farmer, D-Lighthouse Point, argued could hinder legal proceedings that challenge the 30-year deal.

Farmer, a trial attorney, wanted to ensure a transcript of the hour-long discussions senators had over the gaming deal on Tuesday morning be included in the Senate journal, which serves as the official record of the chamber.

“The fact is that if this is not spread across the journal it cannot be admitted in a court of law,” he said, noting that it would also serve Floridians who want to review what was said prior to the vote.

The Republican-led Senate, however, rejected the motion on a 23-16 vote. All Senate Democrats voted in favor of the move, and Farmer said he was in “disbelief” that Republican leaders would push against a standard transparency measure.

Sen. Kathleen Passidomo, R-Naples, said she opposed the motion because it would create “a ton of work for staff.” Sen. Travis Hutson, R-St. Augustine, told reporters that Farmer sprung the issue on the Senate at the “11th hour without asking” leadership about it.

There’s a Broward County issue

Another element of dispute was over how to divide the proceeds of the revenue share from the Seminole Tribe to local governments. A Broward County compromise worked on by Rep. Marie Woodson, D-Hollywood, gives the city of Hollywood 42.5 percent of the local revenue share, as opposed to 55 percent in the current compact with the Seminole Tribe. The town of Davie will receive 22.5 percent, as opposed to 10 percent in the current compact. The city of Dania Beach will receive 10% of the local government share and the county will get the remaining 25 percent.

In the end, the final say will be up to either the federal Department of Interior, which also must approve the compact, or a federal court.

A federal Indian gaming expert hired by the House raised new concerns whether the deal with the Seminole Tribe of Florida and the state will be approved by federal regulators.

“If it is struck down it will be struck down on the grounds that it violates the Indian Gaming Regulatory Act,’' said George Skibine, who was the assistant director of the Indian Gaming Regulatory Commission under former President George W. Bush and also served under former President Barack Obama.

Skibine referred to a lawsuit relating to online gaming in California and said the Indian Gaming Regulatory Commission agreed with an appeals court ruling that said an online gambling operator violated federal law because the transactions were not limited to taking place on tribal land.

“The issue is that IGRA requires that gaming occurs on Indian land,’' he said. “When you have internet gaming, if the bet is placed on Indian land that is definitely Indian gaming. If the bet is placed outside of Indian land and it is received by the Tribe on Indian land, then there is the question as to where the gaming is taking place.”

He said that although the California ruling doesn’t apply to Florida, Skibine said it “indicates that this is going to be a difficult decision for the department.”

Another challenge to the compact will come from Amendment 3, the constitutional amendment approved by voters in 2018, which requires that before the state approves any expansion of gambling it must be approved first by voters in a statewide referendum.

Amendment 3 defines casino gambling as “any types of games typically found in a casino that are within the definition of Class 3 gaming under the federal Indian Gaming Regulatory Act.”

IGRA says that if a state legalizes a form of gambling, the Native American tribes in the state have to be allowed to offer them. Amendment 3 backers argue that because legislators cannot authorize sports betting without voter approval, then it cannot be authorized by a compact.

John Sowinski, executive director of No Casinos and the political committee Voters in Charge, which sponsored Amendment 3, said the arrangement calls for “mental and legal gymnastics to purvey a fiction and illusion.”

Sowinski was one of the speakers at a rally hosted by the conservative Florida Family Policy Council, which bused about 200 gambling opponents from around the state to the Capitol for a rally Tuesday. After the event, attendees flocked into the Capitol to make their case to lawmakers face-to-face.

“I don’t want to live in Pottersville,” said Alan Stevenson of Green Cove Springs in Clay County. He and his wife, Mary Lib Stevenson, strode the halls of the Capitol after the rally, carrying a copy of the film “It’s a Wonderful Life” to illustrate Stevenson’s reference to a land of vice.

Gambling opponents say that other provisions of the compact violate the state Constitution. For example, the compact provides for historic racing machines and “other electro-mechanical facsimiles” of Class 3 games that are defined as casino games in the state Constitution. They also note that the compact violates the federal Wire Act and other federal laws regulating transactions.

South Florida Democrats raised concerns about a provision in the compact that says the Tribe would not object to moving licenses within 15 miles of an existing casino in Broward County. The language is seen as intended to open the door for Jeffrey Soffer, the real estate mogul, who has long sought to transfer his casino permit (The Big Easy Casino in Hallandale Beach) to the Fontainebleau Hotel on Miami Beach, but it is vigorously opposed in the community.

Sen. Jason Pizzo, D-Miami, questioned whether the Senate bill sponsor, Hutson, was confident the compact would not allow a casino on Miami Beach. Hutson said that in order for that to happen, the Legislature would need to approve a local preemption law.

Several Democrats complained that the complex issues were being hurried through and there was not enough time to make changes to the agreement.

Rep. Christine Hunschofsky, D-Parkland, asked what the Tribe is going to do to protect consumers’ data privacy.

Allen didn’t provide an answer but said that they currently use a “sophisticated system where the guest has to opt in” with their existing loyalty program. He acknowledged that consumer data privacy is an issue that “becomes more serious on a daily basis.”

She asked if lawmakers were to pass data privacy legislation next year to protect consumers, as they tried but failed to do this year, would the Seminoles be subject to it?

Allen said that because it is not in the compact and the Tribe is a sovereign nation not controlled by state law, it wouldn’t have to comply with the law.

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