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How to advance Florida gambling? Look to the courts

By Nick Sortal, CDC Gaming Reports

Once again, it took the courts, not the Florida legislature, to generate some progress regarding the state’s gambling landscape.

Last week, Governor Rick Scott announced an extended deal between the state and the Seminole Tribe of Florida, an agreement that will allow the tribe to conduct blackjack and other table games at its casinos in the state through 2030.

The tribe had been part of a complicated attempt to solidify gambling policy in the state, trying to balance the business interests of racetracks and the concerns of some about gambling infiltrating itself too deeply into every corner of the state. But yet again this year, legislators could not push a deal through.

Two court cases moved the needle. In one case, the tribe gained leverage when a judge ruled that the state violated its compact with the tribe by allowing designated player games, such as Ultimate Texas Hold ‘em and Three-Card Poker, at racetrack card rooms. (Those entities argued that those games constituted poker.)  That ruling meant that the Seminoles, should they wish, could continue to offer their existing games and not pay a dime to the state. The second case was initiated by the state, which filed suit because the tribe had continued to offer its table games even though that portion of an agreement had expired in 2015. (A third lawsuit, filed by the tribe, complained that the state had not negotiated in good faith.)

Roll all that together, and Scott and the Seminoles found a way to work a deal that didn’t have to involve the legislature: they signed a “settlement agreement” that ends the cases, including any possible appeals, with the state to collect revenues that the tribe will happily pay for the certainty of having table games for more than a decade. The tribe can also now proceed with plans to expand their hotels in Hollywood and Tampa and to continue to grow what is now $2.4 billion of annual revenues.

The agreement took the Legislature by surprise, and could influence the legislature’s negotiations in working out a more comprehensive deal.

Senator Bill Galvano, who has overseen gambling negotiations and who is slated to take over as president of the Senate after next year’s elections, told The News Service of Florida that the settlement agreement could make it more difficult for the state. “It’s almost as if we’re guaranteeing for the tribe that the status quo will continue for the balance of the compact,” he said.

But striking a deal to end the lawsuits has its advantages. Native American casino compacts with states must go through the National Indian Gaming Commission, which has been more stringent in recent months about ensuring that such compacts are of actual benefit to the tribe. A settlement agreement is not a compact; thus, it doesn’t have to face such review.

This recent news in Florida reminds me of statements made by attorney Daniel Wallach, an expert in the legalities of daily fantasy sports and sports betting. Wallach has long argued that progress toward sports gambling will come via the court system, rather than legislatures, because there is a greater sense of urgency.

For example, the New Jersey sports betting case now scheduled to go before the Supreme Court could pressure legislatures to hustle up and solve the questions themselves. “It’s all about leverage,” Wallace said. That’s true, but I think that sometimes it’s about bypassing the legislators entirely, because they can’t get to an agreement.

In Florida, it’s unclear whether the state came up with the idea of settling the cases as a way to move things forward, or whether it was part of a grand plan by the Seminoles. (The tribe is smart enough to not show up Scott by crowing that they worked out a deal by leveraging the state’s mistake of allowing banked card games.) But the tribe has long been efficient with its resources, and parlaying a court win into an extended agreement is certainly within their playbook.