Governor Crist Signs Historic Gaming Compact with Seminole Tribe

Nov 14, 2007

The following information was released today from the Office of the Governor regarding the signing of a 25-year gaming compact between the State of Florida and the Seminole Tribe of Florida.

A copy of the final compact and a summary of the historic deal is attached for your review, or click here to access the summary on line.

Should you have any questions or comments, please do not hesitate to contact this office.

Governor Crist Signs Historic Gaming Compact with Seminole Tribe 

Billions of dollars in state revenue estimated, Governor encourages Legislature to use funds to support education

TALLAHASSEE – Governor Charlie Crist today, along with Max B. Osceola Jr., Chairman of the Seminole Tribe of Florida, complied with federal guidelines by signing a 25-year compact that has the potential to provide billions of dollars to Florida’s schools. 

In exchange for significant revenue sharing of profits, the agreement gives the tribe the exclusive right to operate slot machines and card games in the seven existing facilities on tribal lands.  The agreement comes on the eve of the federal government’s approval of a request from the Seminole Tribe of Florida to allow slot machines on tribal lands without any revenue sharing with the state. 

“This historic agreement comes after 16 years of negotiations between the State of Florida and the Seminole Nation,” Governor Crist said.  “Today’s agreement will benefit the entire state for generations to come, as well as benefit the tribe.”

The tribe will pay the State of Florida $50 million upon the federal government’s approval of the compact.  Guaranteed annual minimum payments to the State of Florida will be $100 million.  Starting in the third year, the state will receive between 10 and 25 percent of the revenue on a sliding scale, depending on total revenue amounts.  The Florida Legislature will appropriate the funds.

Through the compact, Governor Crist recommends that the funds primarily be used to enhance and support Florida’s education system.  The Governor also recommends that the Legislature designate five percent of the funds to local governments near the tribal lands to assist with increased economic activity, tourism and anticipated ancillary development.

“While it is the Legislature’s prerogative to appropriate the funds as they see fit, I believe that best use of the funds will be to enhance education,” Governor Crist said.  “The compact will provide much needed revenue that can help us develop world-class schools throughout the state.”

The compact allows the Seminole Tribe of Florida to operate Class III slot machines and banked card games (such as black jack and baccarat) at the seven existing facilities on tribal lands (Immokalee, Big Cypress, Brighton, Hillsborough and three locations in Broward County).  In additon, they will be permitted to conduct six no-limit poker tournaments each year, with 70 percent of the revenue going to charitable organizations

The compact provides a significant disincentive for the future expansion of gambling in Florida. The state will forfeit its share of the tribe’s revenue if such expansion occurs on non-tribal lands.  Excepted from this exclusivity provision are the pari-mutuel facilities in Broward and Miami-Dade counties authorized by the 2004 constitutional amendment and subject to local approval.  Miami-Dade County has not approved the gaming.

The agreement also requires the Seminole Tribe of Florida to develop a compulsive gambling prevention program; submit records to an independent annual financial audit; maintain a legal process for compensating individuals for injuries caused to patrons; ensure consumer protection through compliance with national gaming standards, state building codes and inspections, audits and monitoring of games, financial records and internal procedures. 

The tribe will also make provisions for smoke-free gaming and limit admission to patrons age 21 and older.  Indian gaming casinos on Indian reservations fall under federal jurisdiction.  Governor Crist commented that the federal government had indicated it would allow the tribe to operate the slot machines, even if the state and tribe did not come to an agreement for profit sharing or oversight.

 

News coverage from The Miami Herald is below:

Crist to sign Seminole gambling deal

BY MARY ELLEN KLAS

Gov. Charlie Crist will announce at a 2:15 p.m. news conference that he is signing an agreement to give the Seminole Tribe of Florida Vegas-style slot machines, blackjack and baccarat in exchange for their giving the state at least $100 million a year in cash.

The governor has told legislative leaders he will brief them about the compact details 15 minutes before the Wednesday news conference, but has not told them whether he will ask them to ratify the compact, The Miami Herald has learned.

The deal satisfies the U.S. Department of Interior’s Thursday deadline for the governor to complete negotiations with the tribe.

It also satisfies the governor’s need for a piece of good economic news on Wednesday, when state economists are expected to forecast a $2 billion budget shortfall in 2007 and 2008 — the worst economic outlook in more than a decade.

Under the pact, revenue sharing by the Seminoles with the state would grow each year, depending on the success of the games, but the tribe would guarantee a minimum of $100 million each year.

In return, the tribe will have the exclusive right to operate blackjack and baccarat games at their Hard Rock casinos in Hollywood and Tampa and other sites, and will get to replace their existing Class II slot machines with the more lucrative Vegas-style Class III machines like those now operated at Broward parimutuels, said Barry Richard, attorney for the Seminoles.

The tribe would eventually pay the state 10 percent of its revenue from the new games. Allowing the tribe to ramp up its contribution to the state would give it time to purchase new machines and remodel casinos. The agreement would remain in effect for 25 years.

The compact will mark the first time a Native American tribe will share revenue from gambling with the state. The Seminoles have for decades been in protracted legal battles over gaming rights, and a legal fight over the expansion of gambling the compact would entail is almost certain.

A lawsuit challenging Crist is ”guaranteed,” said Senate Democratic Leader Steve Geller of Cooper City.

House Speaker Marco Rubio has already suggested legislative approval is required for the compact to be valid, and if Crist does not ask the Legislature to ratify it, he will sue.

Geller said he believes the agreement with the tribe ”has a very reasonable chance of being thrown out” if the governor does seek legislative approval.

”It does not generate the maximum amount of money for the state of Florida because it probably puts the parimutuels out of business,” he said. “If you get $100 million but you cancel out $150 million, that doesn’t seem like you’re making money.”

State Attorney General Bill McCollum has suggested that the federal government has no legal authority to threaten the state and impose the Nov. 15 deadline. McCollum said he would file a lawsuit against the Department of Interior if it followed through on its threat to start procedures to give the Seminoles slot machines if the state misses the deadline.

The Nov. 15 deadline is the third imposed by the Interior Department, which oversees Indian gaming agreements. The two previous deadlines passed and were ignored by the parties. But this last one comes on the same day the Interior Department is required to file its answer to a lawsuit by the Seminoles. The tribe is asking a judge to force the federal government to take action against Florida for dragging its feet on the compact talks.

”They don’t want to have to file that brief,” said Richard, who filed the lawsuit for the tribe.

Richard said that while the governor was on a trade mission to Brazil last week, he and the governor’s lead negotiator, Paul Huck, sat down for one last meeting to work out minor issues with the compact.

”There are no substantial changes” from the last draft released in October, he said. As for the threat of potential lawsuits, ”it hasn’t had any impact,” Richard said. “We’ve recognized we cannot contract away any legislative power.”

But federal law requires that the tribe receive something exclusive in return for giving the state money, and that’s card games in this case, Richard said.