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What´s Next for State-Sanctioned Gambling in Florida?

Posted on by John Lathram

FloridaWith the state-tribal compact about to come to an end, and just days left in the legislative calendar, what´s next for state-sanctioned gambling in Florida?

It would be an understatement to say the situation regarding state-sanctioned gambling in Florida is complicated. At present, the state has a compact with the Seminole Tribe that allows the Tribe to operate six casinos in return for a revenue-sharing deal worth more than $300 million per year. The compact gives the Tribe state-wide exclusivity for house-banked games such as blackjack.

The state also licenses more than 20 pari-mutuel facilities that enable gamblers to place on-site bets on horseracing. Up until 2016, the facilities also offered card games using the “designated player” system to circumnavigate the Seminole´s exclusivity agreement. This practice was found to be illegal by a US District Court, but the Court´s ruling has not been aggressively enforced by regulators.

More recently, the pari-mutuel facilities have also brought in poker-blackjack hybrid games – further infringing on the tribal compact. The Seminoles gave the state three years to sort the mess out, during which time it has continued to honor its agreement and make monthly revenue-sharing payments. The state has done little to comply with the Court´s ruling, and the three year period expires on May 31st.

Negotiations to Revise Compact get Nowhere

The Seminole Tribe not only wants the state to enforce its part of the agreement, it has also been pressing for a while to get craps and roulette games built into the compact. Since the repeal of PASPA last May, the Tribe has also been keen to offer sports betting facilities – ideally online, but it would be willing to settle for in-person betting at its brick-and-mortar establishments.

The pari-mutuel facilities – which also contribute a significant amount to the state´s coffers – aren´t happy with the Seminole Tribe getting exclusivity over sports betting, so a compromise agreement has been suggested in which the pari-mutuel facilities are sub-licensed by the Seminole Tribe to offer on-site sports betting. That might work if it were not considered by some to be an expansion of gambling.

Last November, voters passed an amendment to the constitution that prohibited Florida´s legislature from expanding state-sanctioned gambling in Florida without a statewide referendum. The amendment effectively ties regulators hands for giving the Seminole Tribe what they want; although Senator Bill Galvano claims he has a solution that will comply with the amendment and satisfy the Seminoles.

Too Many Plates Spinning to Achieve Anything

The problem with Galvano´s proposal is that it doesn´t have the full support of the legislature – many of whom are wary about violating their constituents´ wishes to prevent any further expansion of gambling. Furthermore, if the state were to pass legislation to regulate sports betting in Florida without a statewide referendum, there would definitely be a legal challenge from anti-gambling groups.

There is also no agreement over whether any expansion of gambling – whether approved by voters or not – should be on-site only or online. In states that have regulated online sports betting, revenues are considerably higher than those that don´t, and although Florida is not desperate for tax revenues at present, both the state and the Seminole Tribe want to get a satisfactory long-term solution agreed.

So where does that leave state-sanctioned gambling in Florida? The Seminole Tribe has continued to make payments in compliance with its compact; but Florida´s regulators have failed to uphold their side of the agreement, and I can see the Tribe´s good faith wearing thin. Florida´s legislature could go to the electorate to get support for an expansion of gambling, but it seems lawmakers are trying to find ways to circumnavigate existing laws rather than trying to create new ones.

I feel the Seminole Tribe will probably agree to a short-term extension of the current arrangements, provided some enforcement action is seen to be undertaken. Then, of course, the pari-mutuel facilities will kick off and put pressure on the legislature to do something for them. When nothing happens, there will be a greater division of interests between the Seminole Tribe and other gambling stakeholders, and ultimately nothing will ever change. My guess is we´ll be discussing the same problems for years.

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