Tribe Lawyer: Legal Sports Betting Still Possible In Florida

Tribe Lawyer: Legal Sports Betting Still Possible In Florida

Seminole Gaming could still eventually offer legal sports betting in Florida despite the passage last week of an amendment that put any expansion of gambling under voter control, Barry Richard, outside legal counsel for The Seminole Tribe of Florida told on Friday.

Florida State Senate President-Designate Bill Galvano believes that voters would still have to approve, however.

The auspices of Florida’s agreement – called a compact – with the Tribe would supersede the need for passage by a 60-percent citizen vote as outlined in Amendment 3, Richard said in a phone interview.

“The amendment has an express exemption in it for Compacts with Indian tribes,” he explained, “so the legislature is authorized to enter into an amendment of the Compact to expand gaming on the Seminole reservations.”

And the Seminoles, Richard said, have exclusive right to offer sports betting if it is ever legalized, a stance consistent with that of Seminole Gaming chief executive officer Jim Allen (above). The Tribe owns and offers gambling through Hard Rock International, under what Allen acknowledges in a “semi-monopoly” in Florida at casinos in Hollywood and Tampa, Fla. Hard Rock plans to begin sports betting in an Atlantic City property before 2019.

Galvano, a Republican steeped in state gaming issues, told by email on Tuesday, however, that "legal sports betting in Florida post-Amendment 3 would most likely require a referendum."

"The issue is still open, but the approach will have to change because of the amendment," Galvano said in the email. "The reality is that sports betting has been going on in our state since the origin of professional athletic competition. The recent Supreme Court decision gives us an opportunity to capture a portion of the revenues from this industry, which could be a complete game changer for our budget. Government is limited in its ability to constrain the illegal, under the table, sports betting that is occurring now, but creating a regulatory framework for this existing industry could afford flexibility to reduce other taxes and continue tax holidays that are important to Florida families like the Hurricane Preparedness Sales Tax Holiday we had in June, or the upcoming Back-to-School Sales Tax Holiday in August as examples. ... "I will continue to review and discuss the issue with my Senate colleagues."

Deal Struck In Tallahassee or Statewide?

State legislators and the Tribe have renegotiated their Compact multiple times, including in April to resolve a revenue-sharing conflict. Bargaining would figure to be rigorous again with millions more taxable revenue in play. According to the New Jersey Division of Gaming Enforcement, sports betting has yielded $4.15 million in taxes for that state since legal sports betting debuted there on June 14.

New Jersey taxes sports betting at 8.5 percent, while Pennsylvania, which has legalized but not yet set the regulatory structure for sportsbooks to begin accepting bets, would have an effective rate of 36 percent.

Florida Gov. Rick Scott negotiated the revenue-sharing extension to the current Compact that provides the state $19.5 million monthly and his replacement, either Democrat Andrew Gillum or Republican Ron DeSantis would have the same prerogative. Neither made their positions clear on gambling issues during the election.

How A New Sports Betting Deal Could Be Done

The current Compact could be modified or a new one comprising the Tribe’s entire gaming business in Florida could be explored, Richard said.

“It’s entirely up to them,” Richard said. “They can have a small one that just does [sports betting]. They can do anything that they agree to, but that’s the reason that I said they are now the only game in town when it comes to an expansion of gaming.”

That would be heavily disputed by numerous gambling interests in Florida. And any amendment to the compact would require approval in the legislature, where attempts to modify gambling laws have become mired in recent years and special interest pressure could be mounted.

“You're talking about having a statewide legislature approve a compact amendment that shuts out the entirety of Florida’s commercial gaming industry, and all 30 parimutuel permit holders. Think they might have something to say about that?” pondered Daniel Wallach, a Florida-based lawyer and national expert on sports betting legislation. “It would have to be the state Senate and the Florida House of Representatives, both chambers of the Florida legislature, they would have to approve it and then it would have to be signed into law by the governor."

“Getting legislative ratification, for something that provides a monopoly to the Tribe in the critical sector of sports betting, would be a difficult thing to accomplish, since it would shut out every single commercial gaming operator," Wallach continued. "And they need sports betting."

Wallach said he did not necessarily dispute Richard’s assertion, but found it politically volatile and debatable.

Florida Sports Betting Still Not Imminent

The Tribe has no timetable for pursuing the matter, Richard said. The Florida Legislature reconvenes on March 5.

“I have not had any discussions with the Tribe specifically about it,” Richard said. “I would be surprised if they were not interested in it and given the adoption of the constitutional amendment, they are the only element in this state that could offer sports betting. The legislature, of course, would have to authorize it, would have to amend their compact, but that’s the only way that Florida will see it.”

That makes the Tribe’s decision to underwrite $24.35 million of the $46.2 million raised for a political action group promoting passage of Amendment 3 a shrewd business calculation. If Richard’s contention – which was supported by Kevin Washburn, a University of Iowa law school dean and former Assistant Secretary of Indian Affairs at the U.S. Department of the Interior – is correct, the Seminoles financed a firewall against gambling interests from outside Florida, like MGM Resorts International, which contributed $2.5 million to an anti-3 campaign. It also secured a monopoly on an industry from which it reaped $2.2 billion in revenue in 2015, according to a Politico report.

“I think that was part of it,” Richard said. “A very large part of it is that they were tired of the annual battle over and over and over again every single year, the parimutuels and the outside-of-Florida gambling interests were coming in and lobbying the Legislature and it was like an endless battle. So that’s the main thing that was motivating them.”

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