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State Deal With Tribe To Gamble Goes Bust

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By JEROME R. STOCKFISCH and CATHERINE DOLINSKI

The Tampa Tribune

Published: July 4, 2008

Las Vegas-style slot machines are still beeping and blinking at Hard Rock Hotel & Casino off Interstate 4 in Tampa, but a state Supreme Court ruling on Thursday left lawyers, lawmakers and Seminole officials scrambling to determine the future of tribal gaming in Florida.

The high court scrapped the agreement that allowed the Seminole Tribe to offer high-end slot machines and blackjack card games at its seven casinos. Justices said Gov. Charlie Crist did not have the right to execute a gaming "compact" between the state and the Indians, and his agreement in November violated separation-of-power provisions of Florida law.

"The governor has no authority to change or amend state law," the court said. "Such power falls exclusively to the Legislature."

The ruling came in a suit filed in November by the state House of Representatives.

At stake could be billions of dollars in potential state revenue Florida stood to earn from tribal gaming.

It was not immediately clear how the decision would affect gaming at the Seminoles' casinos. Six of them, including the local Hard Rock off I-4 and Orient Road and another massive Hard Rock entertainment complex near Hollywood, already have installed so-called Class III slot machines, and blackjack is being played in Hollywood.

"Nothing's going to happen overnight," said Barry Richard, the tribe's Tallahassee-based attorney.

The tribe said it would continue to offer existing gaming until court challenges are exhausted.

The political and legal wrangling over the Seminole deal began last fall as Crist and the tribe were making progress in negotiations. Florida was already under the gun, with the U.S. Department of the Interior warning that it would impose its own procedures for Class III slots for the tribe - with no state involvement whatsoever.

House Speaker Marco Rubio, R-West Miami, and his top lieutenants sent a letter to Crist in September warning that any agreement would not be valid unless ratified by the Legislature. In the letter, they said their opposition to the expansion of gambling meant that the pursuit of increased revenue for the state "should be of secondary importance" in negotiations.

In November, Crist announced the deal: The Seminoles would be allowed to offer the same Class III machines that are now legal in South Florida parimutuel sites. Previously, the tribe's "slot machines" were actually revved-up bingo games in which players squared off against each other. Class III machines are said to be much more exciting to play, and since the opponent is the "house," jackpots are typically larger.

The kicker: Crist also allowed the tribe to exclusively offer "banked" card games such as blackjack and baccarat, where players also take on the "house." Previously, tribal poker rooms only allowed players to face one another.

In return, the state would receive a cut of the revenue. That money was in the form of minimum annual payments of $100 million, with a sliding percentage scale in later years ranging from 10 percent to 25 percent as gaming revenue rose into the billions.

Crist estimated the state's take at $1 billion over the first five years of the contract, and a half-billion dollars a year every year thereafter. The money was to be dedicated to education needs.

Rubio filed suit on behalf of his chamber within days of Crist's announcement. Thursday's ruling reignites the Tallahassee standoff between the two.

Asked whether the Legislature might ratify the existing compact, Rubio said no.

"We're not going to do that, for several reasons," he said. "The first is it's a bad deal economically."

The compact negotiated by Crist does not generate enough gain for the state, Rubio said, and threatens to put existing parimutuels out of business, costing the state tax revenue and jobs.

"I'm no fan of parimutuels, and no fan of gambling, but I do understand math ... I believe this deal is a net loss," he said.

Rubio said he is not interested in offering the Seminoles card games such as blackjack. "What I hope is this: The governor will negotiate a new compact on Class III slots, paying taxes at a rate comparable to what the parimutuels pay."

Crist said Thursday evening that "we'll just be reviewing it over the weekend. I'm disappointed. I think it was a very good compact for the people of Florida. It certainly would have helped with the budget and been good for the people of Florida."

George LeMieux, Crist's former chief of staff and one of the key negotiators of the compact, said he expected further legal action, whether it is a petition by the Seminoles for a rehearing at the state Supreme Court or filings in federal court.

LeMieux, now a private-sector lawyer, cautioned he was not speaking on behalf of Crist's office. However, "the question for the speaker is now that he's succeeded in getting the compact thrown out, what is his solution where we're going to get the Seminoles to agree to pay the state money when they don't have to?"

The court ruling giving the Legislature a say in a gaming compact raises the issue of a potential special legislative session. Rubio called that a "possibility." Senate president Ken Pruitt, R-Port St. Lucie, said he would not consider it until legal appeals have been exhausted.

The Seminole Tribe has already made more than $60 million in payments to the state of its first $100 million owed. Pruitt, the Senate president, said that money remains in the general revenue fund and was not factored into the state budget or its financial outlook. The money is available to be returned to the tribe if that is what is necessary, he said.

Reporters William March, Ted Jackovics and Carlos Moncada contributed to this report. Reporter Jerome R. Stockfisch can be reached at jstockfisch@tampatrib.com or (813) 259-8402.

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