Landing gambling expansion will be complicated; legislation offers glide path, with turbulence still ahead

By: and - May 14, 2021 5:16 pm

Casino at Hialeah Park Race Track, in Dade County. Credit: Joe Raedle/Getty Images

Florida could soon allow sports betting via cellphone from Key West to Pensacola — but getting there will require building an elaborate bureaucracy to protect punters, oversee betting platforms, and account for all that money.

Legislation filed Friday could get the state there — and more.

Just days before the Florida Legislature gathers to consider the gambling compact that Gov. Ron DeSantis negotiated with the Seminole Tribe of Florida, Republican lawmakers in the Senate filed nine pieces of legislation Friday morning, followed by six similar measures in the House Friday afternoon that would ratify the 30-year, $2.5 billion deal and build that regulatory structure.

The minimum revenue to the state of $2.5 billion would be paid by the tribe over five years. Negotiators of the compact predict the state take will rise to $6 billion over nine years.

The Legislature is tasked in next week’s special session with ratifying the compact signed last month by the governor and the chairman of the Seminole Tribal Council, adopting legislation to implement it, and submitting the compact for final review by the federal government, due to the involvement of a federally recognized tribe.

Sports betting involves wagering on professional and collegiate sporting events, as well as international Olympic competitions and other kinds of sporting contests, including automobile races. If enacted statewide, such bets could be placed by people physically located anywhere in the state via mobile and other electronic devices, provided the wagers are run through servers on Seminole Tribe property. Currently, those wagers are not legal outside tribal land.

The tribe is a sovereign nation not subject to state laws that have banned sports betting and certain other kinds of gambling elsewhere in Florida.

The bills also would legalize “Fantasy Sports” contests for players as young as 18 statewide, according to an official Senate summary of the gaming compact. Players would pay a fee to a company licensed by the state and select players from across a sports league to comprise a fantasy team. They would collect based on how well those players do on a given day or season.

“All winning outcomes reflect the relative knowledge and skill of the contest participants and are determined predominantly by accumulated statistical results of the performance of individuals, including athletes in the case of sporting events,” one bill says.

Oversight would be strict: Companies offering these games would need state licenses, and their owners and officers would undergo criminal records checks, including fingerprint samples that the state would retain. People with criminal records need not apply. Employees and their family members would be barred from playing.

Separate legislation establishes the requirements for acquiring a license and paying fees to the state.

The main pieces of legislation (House Bill 1-A and Senate Bill 2-A) ratify the gambling compact and authorize the vast expansion of sports betting beyond tribal lands.

The hub-and-spoke mechanism of allowing sports betting statewide (the spokes) through servers located on tribal land (the hub) is intended to get around Florida’s constitutional ban on expanding gambling except by statewide voter referendum. Whether its role as the hub will make the spokes exempt from the constitutional amendment is disputed.

The implementing bills authorize the governor to seek federal approval of the compact from the Bureau of Indian Affairs in the U.S. Department of the Interior, now under Democratic President Joe Biden’s administration. Deb Haaland, confirmed as Interior secretary just two months ago, is the first Native American to hold that post.

The tribe would continue to have exclusive rights to host certain games and would soon be able to add craps and roulette to its offerings. The outcome of the federal review is not a certainty, according to a Forbes analysis published Friday.

Pari-mutuel facilities in Florida would be free to run “designated-player” or “banked” card games — players play against the dealer and not against each other — such as blackjack.

Under the last compact, signed in 2010, banked games were to be exclusive to the tribe, but the state breached that provision by allowing those games to be played beyond tribal lands, leading to the tribe halting revenue-sharing payments to the state in April 2019. The lost revenue is estimated at $350 million, according to legislative analyses.

The potential “partnerships” between the tribe and struggling pari-mutuel facilities — with each gaining authorization for more games than they had before — is designed to reduce friction between these longtime competitors, lawyers for the two sides said in briefings this week.

Pari-mutuel wagering is a regulated industry in which first-place, second-place, and third-place winners collectively share prizes. It applies to multiple events, including horse racing and jai-alai, both of which have been losing ground as interest in card games, slot machines and online betting has grown.

Another pair of bills would give the powerful position of top gambling enforcer to Attorney General Ashley Moody, a statewide-elected Republican and ally of the governor.

The bills would create a “state gaming control commission” in Moody’s Department of Legal Affairs, plus a Division of Gaming Enforcement. The Office of Statewide Prosecution, also under Moody’s aegis, would gain authority to investigate gambling operations.

The Florida Department of Business and Professional Regulation has long been the lead in enforcing gambling regulations, but the compact calls for an enforcer with much broader duties and enforcement powers. Who exactly should be appointed to such a commission, and what interests they may and may not represent, promises to be a flashpoint for debate.

A pair of bills in the House and Senate would keep secret the records of investigations conducted by the proposed gaming commission into gambling-related offenses.

Another pair would officially would kill greyhound racing in Florida (already banned by a referendum in 2018) and “decouple” certain games tied to certain permits and licenses. It would clarify the ability of pari-mutuel permit-holders to offer slot machines and card rooms.

As interest in horse racing and jai-alai dwindles — and with dog racing outlawed — many gambling operations want to shift from live events to games and slots, according to briefings delivered to lawmakers and news media this week.

Bingo games could soon be offered by pari-mutuel facilities in addition to the usual charities. Serious players may run their bingo games at pari-mutuel facilities by using regulated “electronic card minder” devices. As many as 350 such minders could operate in a facility at the same time.

View all the special-session bills and staff analyses as they become available at this link.

No Casinos, the organization that successfully promoted passage of Amendment 3 in 2018, opposes expanding gambling in Florida except as approved by statewide voter referendum. It argues that gambling soils Florida’s family-friendly reputation, promotes gambling addiction, and increasingly targets tech-savvy young people who can ill afford to gamble.

The Seminole Tribe operates seven casinos in Florida and would be authorized under the proposed compact to build three more on tribal land in Broward County over the 30-year term of the agreement.

The proposed changes in the way Florida regulates gambling permits and licenses could create a host of new opportunities for the gaming industry. The possibilities include speculation that former President Donald Trump could acquire an existing permit or license to allow him to open a casino at his resort in Doral, in Dade County, as reported Tuesday by USA Today Network.

Dade and Broward counties are the only two in Florida where casinos are authorized by local referenda.

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Laura Cassels
Laura Cassels

Laura Cassels is a reporter, former statehouse bureau chief, and former city editor. She is a classical pianist, a Florida State University graduate and proud alum of the Florida Flambeau, an independent college newspaper. Contact her at [email protected]

Michael Moline
Michael Moline

Michael Moline has covered politics and the legal system for more than 30 years. He is a former managing editor of the San Francisco Daily Journal and former assistant managing editor of The National Law Journal. He began his career covering the Florida Capitol for United Press International. More recently, he wrote for Florida Politics.