Seminole Tribe Offers Florida $1 Billion
Apr 23, 2009
From the Miami Herald (above): Governor Charlie Crist and the Seminole Tribe offered Florida a financial lifeline: $1.1 billion in cash over two years in return for giving the tribe a gambling monopoly.
With the Florida Legislature currently in a budget stalemate, Florida Governor Charlie Crist presented a plan on Wednesday, April 22, 2009 that would provide several hundred million dollars more in revenue this year from expanded gambling by the Seminole Tribe of Florida.
The Office of Florida Governor Charlie Crist released the information below regarding the Seminole Compact Accords, which would be an addendum to the original Compact first negotiated between Governor Charlie Crist and the Seminole Tribe of Florida in 2008. Media coverage of the Governor’s annoucement follows.
Included in the Governor’s memo are the following (attachments included):
- Statement from Governor Charlie Crist
- Statements from the Seminole Tribe of Florida Representatives
- What Floridians can expect as a result of the Compact Accords
- The Seminole Compact Accords Timeline
Attached to this memo are the following:
- Draft Bill language submitted to the Legislature for consideration
- Compact Between the Seminole Tribe of Florida and the State of Florida as originally signed on November 14, 2007
Governor Charlie Crist and the Seminole Tribe of Florida today released detailed results of The Seminole Compact Accords. The Seminole Compact Accords effectively represent an addendum to the original Compact first negotiated between Governor Charlie Crist and the Seminole Tribe of Florida.
They also reflect substantive input generated in special committees convened by both the Florida Senate and Florida House to look into terms for a Seminole Compact which would become state law.
Approval now rests with Members in both Chambers of the Florida Legislature, who have been openly and publicly looking for ways to responsibly address Florida’s budget deficit.
Statement by FLORIDA GOVERNOR CHARLIE CRIST
Regarding The Seminole Compact Accords
“As the members of the Florida House and the Florida Senate continue their great work under these historically challenging economic times, I am pleased to announce that continued negotiations with The Seminole Tribe of Florida have resulted in more funding for Florida’s students. I am grateful to the Tribe for their desire to contribute even more – $600 million alone for budget year 2009-2010 – to maintaining a quality education for our children.”
Statements by THE SEMINOLE TRIBE OF FLORIDA REPRESENTATIVES
Regarding The Seminole Compact Accords
“This is an important agreement for the State of Florida and the Seminole Tribe. I want to personally thank Governor Crist and the leaders of the Florida Senate and House for all of their hard work in helping to make this happen,” said Chairman Mitchell Cypress, Seminole Tribe of Florida.
“It has been a true pleasure to work with Governor Crist and representatives of the State of Florida. The Governor recognizes the meaningful contribution of the Seminoles to the history and culture of our state, and his support of the Tribe is very much appreciated,” said James F. Allen, CEO of Gaming Operations for the Seminole Tribe of Florida.
WHAT FLORIDIANS CAN EXPECT AS A RESULT OF THE SEMINOLE COMPACT ACCORDS
On top of the 45,000 new Florida jobs it will potentially create, it provides the following:
- Financial Relief: An up-front payment of $600-million to help alleviate the state’s multi-billion-dollar deficit without having to resort to painful remedies; $1.1 billion in new revenue available for Florida over the first two years.
- Education Funding: Dollars available for education are equivalent to paying the salaries of more than 12,000 Florida school teachers.
- Solidity: Utilizes the financial strength of the Seminole Tribe – the only investment grade gaming company in the world today.
- Jobs: Generates a projected 45,000 new Florida jobs at a time of record unemployment in the state, and establishes Florida as a “destination resort” with more choices than ever before. The Seminole Compact Accords would also protect the jobs of thousands of Floridians currently employed by the gaming industry.
- Limits Expansion/Access: Limits gaming to existing locations currently operating or authorized to operate; the Tribe also agrees to adhere to the state’s age limits.
- Competitive Concessions: Recognizing many legislators’ concerns for providing Florida’s pari-mutuels with a level playing field, the Tribe has agreed to a number of concessions that will help the state’s pari-mutuel industry including allowing 24-hour operations, adjusting poker limits, ATMs on the casino floor and credits to players club members.
Further, the Tribe confirmed today that they would support the proposed 15% tax rollback requested by pari-mutuels on all Class III gaming operations for the benefit of all of the state’s pari-mutuels and racing-related interests.
Approval now rests with Members in both Chambers of the Florida Legislature, who have been openly and publicly looking for ways to address Florida’s huge budget deficit.
Results from several recent polls reveal a majority of Floridians support the Seminole Compact. Public support also includes endorsements from the Florida Education Association, Florida School Boards Association, Florida Association of District School Superintendents, Florida Retail Federation, Florida Restaurant & Lodging Association and Florida United Businesses Association. Additionally, a number of Florida newspapers have editorialized in favor of the Seminole Compact, including the St. Petersburg Times, Bradenton Herald, Tallahassee Democrat, Tampa Tribune, Charlotte Sun and Ft. Myers News-Press.
THE SEMINOLE COMPACT ACCORDS TIMELINE
OCTOBER 17, 1988: The Indian Gaming Regulatory Act (IGRA) is enacted, which permits a tribe to compact with a state for Class III gaming activities permitted by the state for any purpose by any person, organization or entity.
JANUARY 29, 1991: Seminole Tribe makes written request to Florida Governor Lawton Chiles to negotiate a Class III gaming compact, based on the various forms of Class III gaming permitted under Florida law (such as the Florida Lottery).
MAY 1999: Seminole Tribe requests “procedures” to conduct Class III gaming from the Secretary of the Interior in lieu of a compact, under new federal regulations.
NOVEMBER 2 2004: Florida voters approve initiative to amend State Constitution to permit slot machines at pari-mutuel facilities in Broward County and Miami-Dade County if subsequently approved by voters.
2005-2007: Voters in Broward (March 8, 2005) and Miami-Dade (July 10, 2007) approve slot machines at a total of seven pari-mutuel facilities.
NOVEMBER 5 2007: Secretary of the Interior notifies State and the Tribe that he will issue procedures authorizing the Tribe to conduct Class III gaming if a compact is not submitted for approval by November 15, 2007.
NOVEMBER 14, 2007: Governor Charlie Crist and Seminole Chairman Mitchell Cypress sign Class III gaming compact which provides for the operation of slot machines, banked card games and other games; Tribe agrees to pay State $375 million over the first three years of the Compact and at least $100 million per year thereafter for “substantial exclusivity” to offer the games.
JANUARY 7, 2008: Notice is published in the Federal Register that the Compact is deemed and approved by operation of law.
JANUARY 28, 2008: Seminole Tribe begins offering Class III slot machines.
JUNE 22. 2008: Seminole Tribe opens first Class III banked card games.
JULY 3, 2008: Florida Supreme Court rules that Governor Crist did not have the authority to compact for banked card games without the approval or ratification by the Florida Legislature.
SEPTEMBER 11, 2008: Florida Supreme Court refuses to reconsider its decision.
DECEMBER 9, 2008: Seminole Tribe seeks review of decision by U.S. Supreme Court.
JANUARY – APRIL, 2009: The Florida Senate and House of Representatives establish special legislative committees to review the Seminole Gaming Compact and hear public testimony; the Tribe presents to both committees.
APRIL 22, 2009: Governor Charlie Crist and the Seminole Tribe work together to announce the Seminole Compact Accords – an historic and unprecedented offer that immediately provides the State of Florida $600 million and helps provide relief for the state’s financial crisis.
The Seminole Tribe offered $1.1 billion to entice lawmakers to support their gambling plan.
BY MARY ELLEN KLASHerald/Times Tallahassee Bureau
TALLAHASSEE — As legislative budget negotiations reached a stalemate Wednesday, Gov. Charlie Crist and the Seminole Tribe offered the state a financial lifeline: $1.1 billion in cash over two years in return for giving the tribe a gambling monopoly.
The deal would allow the Seminoles to continue running blackjack tables at their Hard Rock Casinos, plus five other tribe sites, and it would give them the exclusive right to operate Class III slot machines outside of Miami-Dade and Broward counties.
In return, the Seminoles would send the state an unprecedented check for $600 million in 2009-10 and another for $500 million, if needed, in 2010-11. During the 25-year agreement, the total minimum payment to the state would be $2.5 billion, minus interest payments for the upfront money in the first two years.
The trade off for Florida: no payment at all in year three, then payments that would slowly ramp up again in years four through 25.
Crist called it ”significantly improved” over the gambling agreement he originally negotiated in 2007, which was later invalidated by the Florida Supreme Court because the Legislature had not made blackjack legal in Florida. He commended the Seminoles for their generosity.
”That’s a tremendous assist, at the right time, by wonderful people,” Crist said.
Tribe leader Max Osceola called it ”a great day.”
Senate President Jeff Atwater, R-North Palm Beach, said the Seminole cash ”could be valuable” and provide some comfort to lawmakers as they negotiate differences in the budget.
But the lead gambling negotiators in the House and Senate called it a bad deal for Florida.
”Our approach to the compact is not about filling a fiscal need,” said Rep. Bill Galvano, R-Bradenton. ”We are facing budget problems, but taking out a line of credit from the Seminoles is not a responsible way to balance our budget . . . Front loading the payments is a short-term solution that will lead to long-term problems for our state and its industries.”
Sen. Dennis Jones, R-Seminole, the Senate’s lead negotiator, said the agreement seems to indicate the governor has backed off his support for the Senate plan to offer additional games to horse and dog tracks to better allow them to compete with the tribe.
”Now that there’s more money up front, the Indians don’t want parimutuels to have any expansion and that’s probably not going to sit well in the Senate,” Jones said.
The proposal must be approved by the Legislature to become law. In addition to the upfront cash, the agreement allows lawmakers to reduce the 50 percent tax rate on the seven parimutuels operating in Miami-Dade and Broward counties to 35 percent. It allows them to operate 24 hours a day, offer free alcohol to patrons, set-up ATM cash machines on the casino floor and raise poker limits.
The proposal also eliminates an earlier provision that if the tribe’s net wins decline below $1.37 billion, their payments would cease.
”With the exception of the funding, there were no material changes,” said Barry Richard, a lawyer for the tribe who helped draft the proposal.
He said the tribe decided to offer the money when it became clear that lawmakers were struggling to find a way to fill their budget deficit.
The tribe arrived at the $600 million figure because it roughly equals the difference between the House and Senate budgets and also because it combines the amount they would have owed the state this year under the previous agreement — $288 million — and the amount they can borrow from financial markets.
Under the plan, the state would split the cost of the loan 50-50 with the tribe.
”This changes the whole picture,” Richard said. ‘Who else can give the state $600 million? . . . It would be difficult for the Legislature to say ‘no thanks.’ ”
”I say take the money and run,” said the Senate Republican leader, Alex Diaz de la Portilla of Miami. He praised the deal as ”creative” and a way to avoid cuts to ”critical services for vulnerable Floridians.”
For the parimutuel industry, it’s a tough bargain.
”It’s a reasonable offer,” said Marc Dunbar, a lawyer and lobbyist for Gulfstream Race Track in Hallandale. ”But I don’t see any significant change in the tribe’s position. There are a lot of legislators who have parimutuels in their districts that are outside Dade and Broward. Are they going to be willing to take the money from the tribe and forsake their incumbent industries?”
Crist has an answer: ”Do this for the children of Florida.” He said he believes the money should be dedicated to education and urged lawmakers to be open-minded.
He is also optimistic that in years three and four, the same years the stimulus money from the federal government ends, the economy will have rebounded and the state won’t need the cash.
”It is already starting to happen in fact — the hopeful beginning of the end of the recession,” he said.
He said the tribe’s offer is ”more than what we have right now — which is nothing.”
Herald/Times staff writers Marc Caputo and Amy Hollyfield contributed to this report. Mary Ellen Klas can be reached at meklas@MiamiHerald.com
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