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Crist, Seminoles sign compact that still must get lawmakers' OK

Tribune file photo by CLIFF MCBRIDE

The gaming expansion would pay the state at least $150 million a year.

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By CATHERINE WHITTENBURG | The Tampa Tribune

Published: August 31, 2009

Updated: 08/31/2009 06:27 pm

TALLAHASSEE - Gov. Charlie Crist signed a new gambling compact today with the Seminole Tribe, worth an estimated $6.8 billion over 20 years.

Whether that compact will become law remains to be seen, however. Lawmakers will have to ratify the terms for them to take effect – and the compact leaves out several key demands that negotiators for the Legislature had made.

Lawmakers had set a deadline of tonight for Crist and the tribe to come to agreement based on compact parameters set by the Legislature last spring after successfully challenging the first compact Crist signed with the tribe. The terms that Crist and the tribe inked today give tribe rights to offer Vegas-style slot machines and banked card games like blackjack at its seven existing gambling facilities around the state, including the Hard Rock Casino in Tampa.

That's more than House and Senate negotiators said last week that the Legislature would likely accept.

Lawmakers, many of whom oppose expanded gambling in Florida, have been displeased with the tribe's persistent efforts to re-negotiate the parameters that the House and Senate set last spring after weeks of difficult negotiating. Last week, they signaled only reluctantly that they would agree to banked card games at the Seminoles' Immokalee casino but did not want them at Brighton and Big Cypress.

"It was a difficult lift to get the House to agree to [the games in] Broward, and more difficult to get them to agree to Hillsborough," said Bradenton Rep. Bill Galvano, lead negotiator for the House. "I don't see that difficulty being lessened by adding three more facilities."

The tribe's gaming rights would be near-exclusive, preventing any large-scale expansion of gambling at the state's non-tribal parimutuels. In return, the Seminoles would pay Florida 12 percent to 22.5 percent of their net revenues, based on the size of their annual take. The complex formula boils down to at least $150 million per year, for a predicted total of $6.8 billion for public education over 20 years.

"Another important milestone has been reached in the Seminole Tribe's long effort to establish a compact with the State of Florida" Seminole Tribe Chairman Mitchell Cypress said in a release. "We are hopeful and optimistic that the compact will ultimately become law."

The compact permits limited gambling expansion at the seven parimutuels in Miami-Dade and Broward counties, since voters there have already approved Vegas-style games by referendum. If competition from gambling expansion in Broward hurt the Seminoles' bottom line at their Broward casino, the tribe would get to reduce its payments to the state.

The compact terms would prevent expansion outside the tribe of either Class-II games, like electronic bingo, or Class-III games like slots and blackjack in other counties. If voters in, say, Hillsborough County approved those games for local parimutuels, that would halt payments by the tribe.

Concerned with parimutuels' ability to compete, Galvano said that lawmakers did not want a compact that prohibited those businesses from acquiring Class-II games through existing legal channels.

"That is a concern the members will have trouble with," he said. "A Tampa Bay Downs or similar facility won't really be able to expand at all without impacting the payments to the tribe."

Both Senate President Jeff Atwater and House Speaker Larry Cretul were guarded about the compact and said the issue remains under review.

Senate President Jeff Atwater praised Crist's negotiating efforts but was non-committal about whether he will support it.

"We have received the compact and will begin reviewing it ... to determine what is the best course of action for Florida," Atwater said in a released statement.

House Speaker Larry Cretul was similarly guarded, saying that the issue remains under review.

If lawmakers refuse the terms, the Seminoles may continue offering games and making payments based on the terms of their prior compact, which Crist negotiated in late 2007.

Per federal law, the tribe has a legal right to offer Class-III slots on its land because the games have been authorized elsewhere in the state. Because the tribe is a sovereign nation, the state cannot tax its revenues. Florida can, however, enter into a compact with the tribe that grants the tribe some form of exclusive advantage in exchange for payment.

With the federal government threatening in 2007 to authorize slots at Seminole facilities – leaving the state with no share of the proceeds – Crist negotiated a compact that gave the tribe slots and exclusive rights to blackjack in exchange for payments of roughly $100 million to $125 million annually. The terms guaranteed the state roughly $2 billion to $3 billion over 25 years.

Under a challenge by the legislature, the state Supreme Court voided that compact in late 2008, finding that Crist overstepped his authority by not involving lawmakers. Nonetheless, the Seminoles have been offering games authorized in that agreement and paying the state accordingly – and might continue to do so, if lawmakers reject the latest compact. Thus far, the tribe has paid the state $160 million, but the money sits in escrow until state leaders and tribe sign a new accord.

Lawmakers argue that the high court's ruling voided the prior compact – leaving the tribe with no legal basis for operating the games currently. If lawmakers refuse the latest terms, they are likely to continue insisting that, in Galvano's words, "there is no compact."

Absent a new agreement between the Seminoles and the state, federal gaming authorities could step in to authorize a slots-only arrangement for the tribe, leaving the state unable to collect a portion of the proceeds.

Lawmakers' refusal would also nix the benefits they approved for non-tribal gambling facilities as part of the package, including extended cardroom hours and the ability to offer no-limit poker.

How much the tribe would pay state:
Based on new gambling compact that Gov. Charlie Crist and the Seminole Tribe signed Monday, the tribe would make the following payments to Florida for exclusive rights to offer Vegas-style games:

Year Ending in:

12/1/2010: $150 Million

12/1/2011: $150 Million

12/1/2012: $183 Million

12/1/2013: $236.4 Million

12/1/2014: $261.9 Million

12/1/2015: $292.6 Million

12/1/2016: $308.3 Million

12/1/2017: $319.3 Million

12/1/2018: $330.7 Million

12/1/2019: $342.3 Million

12/1/2020: $354.3 Million

12/1/2021: $366.7 Million

12/1/2022: $379.7 Million

12/1/2023: $395 Million

12/1/2024: $410.8 Million

12/1/2025: $427 Million

12/1/2026: $443.8 Million

12/1/2027: $461 Million

12/1/2028: $481 Million

12/1/2029: $501.9 Million

Total $6.795 Billion

"Another important milestone has been reached in the Seminole Tribe's long effort to establish a compact with the State of Florida" Seminole Tribe Chairman Mitchell Cypress said in a release. "We again want to thank Governor Crist for his continued support and we are hopeful and optimistic that the compact will ultimately become law."

President Jeff Atwater was complimentary in a prepared statement of Crist's negotiating efforts but non-committal about whether he will support it:

"This is a complex issue and I applaud the diligent effort put forth by the Governor's office and Seminole Tribe. We have received the compact and will begin reviewing it in detail. After a thorough review we will work with Governor Crist and the Florida House to determine what is the best course of action for Florida."

Reporter Catherine Dolinski can be reached at (850) 222-8382.

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