Florida joined the dozens of states that have authorized mobile sports betting Wednesday, as legislators wrapped up their special session and ratified an agreement with the Seminole Tribe ushering in the broadest expansion of gambling in Florida in a decade.
But don’t expect to start wagering on your favorite sports teams for a while.
Federal regulators must approve the deal, which expands the gambling monopoly in Florida for the Seminole Tribe, to make sure its guarantee of $500 million in revenue sharing with the state is fair to the Tribe and legal for the state. The U.S. Department of Interior has 45 days after the bill is signed by the governor to make a decision.
“Congratulations on an historic compact with the Seminole Tribe of Florida,’’ said Rep. Chris Sprowls, R-Palm Harbor, at the conclusion of the vote, adding that the complex proposal “was a difficult one to navigate.”
The measure, negotiated with the Tribe by Gov. Ron DeSantis, required some aggressive lobbying by the governor and Lt. Gov. Jeanette Núñez, especially of Miami-Dade lawmakers and conservative House members who privately see the measure as a risky expansion of gambling.
As the governor held a veto threat over hundreds of legislative projects in the $110 billion budget, lawmakers who traditionally would have opposed the measure withheld their opposition. The House approved the deal on Wednesday on a 97-17 vote. The Senate approved the compact on Tuesday, with a 38-1 vote.
“I don’t know if I’m more brokenhearted for my friends on the other side of the aisle that had to fall into line because you had to, and I’m sorry for you,’’ said Rep. Joe Geller, D-Aventura, who voted against it. “Or if I’m more brokenhearted for members on my side of the aisle who came up with every reason in the world to not stand together and make a point.”
He said he was disappointed in Republicans for negotiating a “bad deal” and in Democrats for not uniting against a 30-year deal he said is “too long” with proceeds that “are not enough money” for the monopoly the state is giving the Tribe.
The deal is fraught with precedent-setting implications for the nation and Native American tribes, which could use Florida’s model to negotiate similar arrangements in other states. It is also expected to draw legal challenges over its constitutionality.
A look at the future
If the state clears those hurdles, anyone in Florida over age 21 can start playing the games on their cellphone on Oct. 15. The Seminole Tribe’s Hard Rock casinos in Broward and Hillsborough counties also will have full Las Vegas-style casinos with the addition of roulette and craps, and mobile sports betting will be allowed through online apps managed by the Tribe as well as Florida’s existing racetracks and jai-alai frontons.
“We’re going to allow the Seminole Tribe to offer sports betting where you can be sitting in your bathtub or sitting on your couch, thinking about a football game and you can make a wager, regardless of where you physically are, on your cellphone,’” said Rep. Randy Fine, R-Palm Bay, the House chair of the Select Committee on Gaming.
The House approved the deal after refusing to address a series of Democratic amendments that attempted to direct the spending of proceeds from the Tribe to education and other social service programs. It was an attempt to keep the money from what Geller called “tax breaks for rich guys or the corporations the rich guys own.”
Sen. Jeff Brandes, R-St. Petersburg, was the lone no vote in the Senate, and Sen. Randolph Bracy, D-Orlando, did not vote.
Brandes said his no vote on the compact was based on “principle.”
“We have decided to create a statewide monopoly for one entity for money,’’ he said Tuesday. “That’s it. It isn’t the right thing to do. It doesn’t conform with our Republican values that we are for free markets and open competition in the state of Florida because that is not what this compact does,” he said. “We are putting all our eggs in one basket for $500 million.”
Sen. Travis Hutson, R-St. Augustine, called the compact a “great deal” that will allow the Legislature to “plug holes in the budget” and spending priorities for years to come.
Hutson added the compact includes a major concession to the 26 racetracks, jai-alai frontons and racinos around the state. Under the plan, the Tribe will no longer object to having existing parimutuels operate designated-player card games, a hybrid between blackjack and poker which the Tribe has long considered competition to its blackjack operations.
“They have agreed to let designated-players stay with our parimutuels. That has always been a breaking point, every single year, and we now have that,” he said.
Seminole Tribe wins this hand
The biggest winner is the Seminole Tribe, which has used its operation of the Hard Rock Casino and resort to build a gambling empire that is becoming one of the largest gaming operators in the world. The Tribe will continue to operate slot machines, blackjack and chemin de fer and raffles and drawings at its existing casinos and will now have the ability to build three new casinos at its existing property near Hollywood in Broward County.
Seminole Gaming CEO Jim Allen has estimated that operating full casino games will allow it to cover $400 million of the $500 million it has guaranteed to the state in revenue sharing. If federal regulators allow it to also operate sports betting, that activity is expected to cover the remaining $100 million of the guarantee.
Because Florida voters approved Amendment 3 in 2018 and required voter approval of any expansion of gambling in Florida, the biggest unknown is whether the introduction of a new “hub and spoke model” is constitutional.
That model requires the Tribe to handle all sports betting conducted anywhere in the state through an internet server on its tribal lands, but the compact also allows licensed racetracks and jai-alai facilities located outside tribal borders to build their own apps and take 60% of the proceeds from each bet even though the bet goes through the Tribe’s server.
“As we’ve said from Day One, and as the parties have contemplated, it is an open question,“ said Rep. Sam Garrison, a Fleming Island Republican and a lawyer who was advising Rep. Bobby Payne, R-Ocala, who sponsored the bill to ratify the compact.
“There is no black and white answer whether the hub and spoke model is going to be permitted or not,’’ Garrison said.
Under the federal Indian Gaming Regulatory Act (IGRA), the state may enter into a compact with a Tribe to authorize gambling but only if they occur “on Indian lands.” However, IGRA describes that to mean “all lands within the limits of any Indian reservation” or lands held in trust by the United States for the intended benefit of the Indian Tribe.
Fine, a former gambling executive, said he doesn’t think the sports betting component will survive, thereby triggering the compact’s severability clause, whereby the Tribe will continue its roulette and craps and pay the state a commensurate amount, but sports betting won’t happen.
But Daniel Wallach, a gambling consultant who has studied Florida’s laws, argues that the sports betting model will likely be rejected by the courts or federal regulators because of precedent under federal law and rather than eliminate sports betting, it will give the Tribe a monopoly over the games.
That will “guarantee a tribal monopoly over all in-person sports betting and eliminating all mobile wagering originating off of tribal lands and ALL parimutuel participation in sports betting,’’ said Daniel Wallach, a gambling consultant who has studied Florida’s laws. He argues it is the likely outcome because of precedent under federal law.
House Speaker Sprowls agreed that the legality of the hub and spoke model “is an open question.”
“Some people have looked at and said, ‘Hey, I don’t think it’s going to make it,’ ’’ he said. “I’ve looked at it. I think it will. The reality is that’s going to be resolved by a court. We expected this is probably going to be litigated.”
But he conceded that if the court strikes down sports betting under Florida’s model, the Seminoles will be the only operator that have it at their facilities.
John Sowinski, president of No Casinos, which opposes the compact, agreed there will be litigation.
“This fight is just beginning,’’ he said in a statement. “We are committed to ensuring that the will of the people, who voted by a remarkable 72% landslide to give Florida voters the exclusive right to authorize casino gambling in our state, will be respected.”
Legislators also approved a bill to end live racing and jai-alai at most of the state’s gambling venues, including a controversial provision that would end live racing at the state’s only harness track, Pompano Park. The change has been sought by gambling operators who consider live racing a dying sport and now want to focus on card rooms and sports betting.
After the House Select Committee on Gaming agreed to restore the requirement that Pompano Park operate live races for tracks on Tuesday, the full House reversed that decision Wednesday.
The House rejected an amendment by Rep. Dan Daley, D-Coral Springs, the son of a Standardbred horse trainer, to add the protections for his family’s industry to the Senate bill and then passed the Senate bill.
“The Senate is no longer meeting, has no plans to meet so, this, if this is tacked on this bill, it will actually die,’’ said Rep. Chris Latvala, R-Clearwater, sponsor of the House bill.
“Don’t eliminate an entire industry and the 10,000 families that depend on it for the benefit of a deep-pocketed Nevada-based company,’’ Daley said, referring to Caesar’s, which owns Pompano Park.
Moving existing licenses
South Florida Democrats pressed House Republicans to clarify a provision in the compact that says the Tribe would not object to moving licenses within 15 miles of an existing casino in Broward County.
The language is seen as intended to open the door for former President Donald Trump to obtain a gambling license in Miami and transfer it to his Doral resort and for Jeffrey Soffer, the real estate mogul, who has long sought to transfer his casino permit from The Big Easy Casino in Hallandale Beach to the Fontainebleau Hotel in Miami Beach, but it is vigorously opposed in the community.
“Do you have confidence there cannot be a casino in Doral or Miami Beach?” asked Rep. Nick Duran, D-Miami.
Payne answered, “Yes, we do have confidence and feel that will be enforced.”
Rep. Michael Grieco, D-Miami Beach, argued that the compact has removed “one of many hurdles” by including a statement that the Tribe will not object if a license is transferred from one parimutuel to another within 15 miles of its Hard Rock casino in Broward County.
Payne responded that “current law wouldn’t allow you to move slots under the current Constitution.”
Grieco suggested that if the House held a secret ballot, the conservative Republicans in the House would vote against the measure, which has been heavily lobbied by DeSantis.
“This is going to go through. I can’t stop the train,” Grieco said after Democrats allowed Republicans to waive the rules and bring the bill to a vote of the full House without delaying another day.
“I know there’s a bunch of people who are going to vote up on this that don’t want to,’’ he said. “Any scenario that anyone is going to vote up on this and thinks we’re not voting for the expansion of gaming, I don’t think that’s an intellectually honest position to take.”
Complaints about the speed of the process
Democrats also complained that many of them were “locked out of the process” as the legislation has been fast-tracked amid the questionable legal issues as lawmakers adjourned the week-long session after three days.
“I cannot vote to ratify this contract and teach you that you can lock me and my colleagues out of this process and teach you that we can have a meaningful voice on such an important deal for the people of Florida,” said Rep. Omari Hardy, D-West Palm Beach.
As a companion to the gambling deal, the House and Senate also approved legislation to create a new five-member state Gaming Control Commission, which will be the home to a law enforcement arm to root out illegal gambling, such as gray market slot machines at so-called “internet cafes.”
The Senate passed the gaming commission on a 26-13 vote, after it was amended to remove a provision that would have placed a two-year buffer before legislators can serve on the commission. The House approved the same bill 108-7.
“Shouldn’t we have a little distance between the last PAC check and your next vote on the commission?” asked Brandes.
Brandes also voted against creating the Gaming Control Commission after raising concerns that it will be a panel for legislators to retire and make $136,000 a year or be used to hire their friends and relatives.
“This entity will become political,” he warned. “This entity will have commissioners who basically have a job that they don’t really have to show up for. They will meet quasi regularly and they will hear about some backroom card deal that some local sheriff brought down and they will make some decision over it. What are they going to do all day long?”
Sen. Jason Pizzo, D-North Miami Beach, voted for the gaming compact even though he said it was not the best deal for Floridians.
“I think the current posture that we are in right now shows that one side is very good at negotiating and the other has never made a payroll or signed the front of a paycheck,” Pizzo said.
“Good deal or bad deal it is the deal that we have on the table, and I can’t in good conscience turn down the money,” said Sen. Annette Taddeo, D-Miami. “Could we have gotten a better deal? 100% … but this is what we have, and I am voting for it as long as we don’t go against the voters’ intent, which I don’t believe we are.”
Mary Ellen Klas can be reached at [email protected] and @MaryEllenKlas