Seminoles Expected to Offer Compact Proposal Before End of Week

Posted on: February 14, 2018, 12:00h. 

Last updated on: February 14, 2018, 11:14h.

Florida lawmakers have been locked in negotiations with the powerful Seminole tribal operator this week, as they try to thrash out a new gaming compact.

Seminole Gaming CEO Jim Allen discusses Seminole compact
As Seminole compact negotiations resume, Seminole Gaming CEO Jim Allen said his company had “concerns” about a senate bill that proposes allowing Florida parimutuels to offer designated player games. (Image: Vernon Ogrodnek/Press of Atlantic City)

Senator Bill Galvano, leading the negotiations, told The News Service of Florida he believes the Seminoles could come back with a proposed deal this week.

“I believe everyone left that meeting feeling like there were next steps to be taken. The very specific next step is, after we had talked about the 40,000-foot issues today, to receive later this week a draft compact … one for us to adjust and make a response to,” said Galvano.

There’s big money at stake. In late 2015 Florida Governor Rick Scott agreed a revenue-sharing deal with the tribe that would have been worth $3.1 billion to the state over seven years – the biggest deal of its kind in the US. But the legislature rejected that deal, and now the ship may have sailed.

Seminoles Have All the Bargaining Chips

The Seminoles’ hand has been strengthened by a 2016 federal court judgment that ruled the State of Florida had erred by permitting parimutuel venues to offer so-called designated player games (DPGs). Florida believed these games did not fall under the definition of “banked games” on which the Seminoles have exclusivity.

But the judge disagreed and ruled state had violated its original Seminoles compact, which expired in 2015. The violation gave the Seminoles the legal right to offer banked games exclusively until 2030 under the terms of that compact.

But the Seminoles continued to make payments to the state under the provision that it effectively policed the parimutuels and clamped down on DPGs.

DPG Deal-Breaker

DPGs are a big deal for the operator and will form a large part of the negotiations. But Galvano will try to convince the Seminoles to let the parimutuels host the games in return for the right to offer craps exclusively at their Hard Rock casinos, in line with his gambling reform bill, SB 840.

The Seminoles are understood to be less than enthusiastic about this proposal and are naturally more sympathetic to a competing house bill that would largely maintain the status quo.

“I think [DPGs] are something, from the tribe’s perspective, that still needs to be reviewed,” said Seminole Gaming CEO Jim Allen of the Senate bill.

Our concern, separate from the compact, is that outside influences coming into the state of Florida, non-regulated, is something that we don’t believe is good for the industry in general. I think that that language is something that we’ll have to work through with the state.”

There’s extra pressure on the legislature to get a deal done this year. Next November, residents will vote on whether to approve a Disney-back amendment that would give voters the exclusive right to decide on any future gambling expansion in the state.

Galvano believes that, if passed, this would eliminate the state government’s bargaining power in its dealings with the tribe, effectively handing the Seminoles a gambling monopoly.