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Tribe strikes deal to expand gaming
But the Legislature and others oppose the governor's arrangement.
By STEVE BOUSQUET and STEVE HUETTEL, Times Staff Writers
Published November 15, 2007
Mitchell Cypress, chairman of the Seminole Tribe of Florida, shakes hands with Gov. Charlie Crist after signing the 25-year gaming compact Wednesday in Tallahassee. It gives the tribe the right to operate certain slots and card games in Florida.
"Class III" Las Vegas slot machines replace "Class II" video bingo machines that look like slots.
TALLAHASSEE - Calling it a "very historic day for Florida," Gov. Charlie Crist agreed Wednesday to let the Seminole Tribe of Florida operate casino card games now banned in the state and slot machines at seven sites, including the Seminole Hard Rock Hotel & Casino in Tampa.
The 25-year deal gives the tribe exclusive rights statewide to offer games such as blackjack and baccarat and the only Las Vegas-style slots outside of South Florida. In return, the state will receive a cut of at least $100-million in the first year with the chance to make much more as the tribe's casino business grows.
The agreement was announced on a day when state experts predicted a dire $1.4-billion shortfall in 2008, the second straight year of billion-dollar deficits. It also came on the eve of a deadline set by the U.S. Interior Department for the state and tribe to wrap up a deal.
Federal officials threatened to unilaterally allow expanded gambling on Seminole reservations unless the two sides signed an agreement, called a compact, today. If that happened, Crist said, the state would get no money and have no regulatory control over the casinos.
"I believe it would be irresponsible to allow that to happen," he said at a news conference in the Capitol. "That is a gamble I am not willing to take."
Fight looms large
It's too early to know when the new games might start, said James Allen, chief executive of the tribe's gaming operations. Interior Department officials have 45 days to approve or reject the deal, and opponents in the Legislature and competing parimutuel business pledged to fight it.
The compact doesn't provide approval by the Legislature, even though Crist said for months that legislative ratification was his preference. That surely sets up a clash with House Speaker Marco Rubio, a gambling opponent who has a legal opinion that any compact is subject to lawmakers' approval.
Rubio's legal adviser on gambling, University of Florida law professor Jon Mills, says legislative approval is required because table games permitted in the compact are illegal under Florida law.
The state's horse and greyhound tracks and jai alai frontons complain that giving the Seminoles exclusive rights to card games and slots could drive them out of business. If Crist gave parimutuels the same deal as the tribe, the state's annual take would be $1-billion or more, said Richard Winning, vice president of Derby Lane in St. Petersburg, the state's longest-running greyhound track.
"I think the governor sold the state out cheap, like trinkets for Manhattan to the Indians," he said Wednesday. "Only we did it in reverse."
A gambling expert in the Legislature agreed.
"Crist was terribly misguided," said Senate Minority Leader Steve Geller, D-Cooper City. "Not only does the state of Florida end up with the short end of the financial stick, but for the first time in the state's history, a governor has bypassed the Legislature for approval on a compact."
Attorney General Bill McCollum said federal threats were meaningless because the government has no power to force a state to sign a compact. He said table games would attract crime and threaten the state's image as a family tourist destination.
"I think it will create more criminal behavior. It always does," McCollum said.
Crist recommended that the state's share of the money be spent mostly for education - but he can't mandate that without usurping the Legislature's power of the purse. So while Crist touts the deal as having the potential to provide "billions" to schools, nothing in the compact requires that.
"Gov. Crist, you are a good friend of the Seminole Tribe," said tribal chairman Mitchell Cypress, who signed the deal in the governor's office, ending months of negotiations.
For the past 16 years, Crist's two predecessors, Republican Jeb Bush and Democrat Lawton Chiles, managed to keep the federal government at bay. For six of those years, Bush's brother, George W. Bush, was in the White House.
"It occurs to me that it's the right thing to do," Crist said. "If we don't do it, the federal government will do it anyway and we get zero."
Millions for the state
From more than $1-billion in revenue from slots, baccarat and blackjack, the state would get $50-million when the federal government ratifies the compact and at least $100-million in the first full year of operations.
The take would grow to a minimum of $125-million in the second year. After that, a sliding scale kicks in, starting at 10 percent of revenues up to $2-billion and going up to 25 percent if they exceed $4.5-billion a year.
The tribe projects that as operations ramp up, Florida could reap in the neighborhood of $230-million in the third year and $400-million in the fourth year, said Allen, the chief gaming officer.
Seminole officials have already planned a 24-story resort with 1,500 hotel rooms at their casino in Coconut Creek. The compact could mean expansions in Tampa, Hollywood and Immokalee as well. The tribe expects to more than double its Florida hotel and casino payroll, from 7,000 to 17,000, in three or four years, Allen said.
"As we add more, we can market them not just as a local destinations, but nationally and internationally," he said.
But under the compact, if the Legislature approves video lottery terminals outside Miami-Dade and Broward, the tribe is not required to give the state any money. Crist called that a huge disincentive to expand gambling to other areas.
Crist dismissed the notion that the compact violates a campaign pledge he made last year to oppose expansion of gambling in Florida, and he said he did not see any need for a big debate in the Legislature.
"I don't think a vigorous debate is necessary," Crist said. "If people don't like gambling, they shouldn't go."
At the Tampa Hard Rock on Wednesday, Jane Laffer of Valrico said relaxing restrictions to allow real slots and blackjack could make casinos more popular to tourists. "People don't see this type of gambling as a destination," said Laffer, 60. "If the payoffs were better, people would really come here."
Across Tampa Bay, the few patrons at Derby Lane who had heard about the gaming deal wondered what it meant for the track that opened in 1925 and attracted celebrities like Babe Ruth and Lou Gehrig.
"The casino wiped out the Tampa track, and you've got to figure it's going to happen here now," said Paul Anderson, 38, of Oldsmar after spending a few hours betting on the greyhounds. "But if that's what the people want, you have to do what's best for everybody."
Times staff writers Alex Leary, Jacob Fries and Kevin Graham contributed to this report. Steve Bousquet can be reached at email@example.com or (850) 224-7263.