Tag Archives: Pari-Mutuel

Proposed Amendment Three to the Florida Constitution (Voter Control of Gambling) is misleading and far more expansive than most people believe. The exact impact of the Amendment is unknown, and it may have an unintended impact on Florida’s two Indian tribes. If it is passed now, it will be extremely difficult to undo.

Summary: Proposed Amendment Three to the Florida Constitution (Voter Control of Gambling) is misleading and far more expansive than most people believe. The exact impact of the Amendment is unknown, and it may have an unintended impact on Florida’s two Indian tribes. If it is passed now, it will be extremely difficult to undo.

The Seminole Indian Tribe of Florida and Walt Disney World have been the two main funders of proposed Amendment Three to the Florida Constitution. This Amendment, entitled “Voter Control of Gambling in Florida”, takes away from the Legislature much of the Legislature’s authority to amend gambling laws in Florida (the extent of which is uncertain), and instead requires a “citizens’ initiative pursuant to Article XI, section 3, in order for casino gambling to be authorized under Florida law.”

Many people mistakenly believe that the “casino gambling” referred to in Amendment Three is limited to bringing in big new casinos. The wording of the Amendment cross-references 25 CFR 502.4, and includes
(a) Any House banking game, including but not limited to –
(1) Card games such as baccarat, chemin de fer, blackjack (21) and pai gow (if played as house banking games;
(2) Casino games such as roulette, craps, and keno
(b) Any slot machines as defined in 15 U.S.C. 1171(a)(1) and electronic or electromechanical facsimiles of any game of chance
(c) Any sports betting and pari-mutuel wagering, including but not limited to wagering on horse racing, dog racing or jai alai; or
(d) Lotteries

The wording of the amendment specifically exempts pari-mutuel wagering by stating “As used herein, ‘casino gambling’ does not include pari-mutuel wagering on horse racing, dog racing, or jai alai exhibitions.” Note that there is no exemption in Amendment Three for the lottery language listed in 25 CFR! Depending on how Amendment Three is interpreted, this could have a significant negative effect on the Florida Lottery.

It is unclear what the actual effect of Amendment Three would be if it passes. This could be the Gaming Attorney/Administrative Law Attorney/Appellate Attorney full employment act. The Amendment may or may not be retroactive, meaning that it may or may not prevent types of gambling that are already legal in Florida. As the Florida Supreme Court determined when they ruled that the language could go on the ballot:
“The opponents primarily argue that the Initiative should not be placed on the ballot          because it is unclear whether, if passed, the amendment would apply retroactively            and what effect, if any, the amendment would have on gambling that is currently                legal in Florida—including gambling that was previously authorized by general law           rather than by citizens’ initiative. However, as the sponsor points out, the                             opponents’ arguments concern the ambiguous legal effect of the amendment’s text             rather than the clarity of the ballot title and summary.” (Florida Supreme Court                   SC16-778, SC16-871)

Thus, the Florida Supreme Court specifically stated that the Amendment has “an ambiguous legal effect” and declined to rule whether or not the amendment is retroactive. If they haven’t determined if it’s retroactive, and say it’s ambiguous , how can voters know what it will do?

The wording of Amendment Three states that “Florida Voters shall have the exclusive right to decide whether to authorize casino gambling in the State of Florida.” What does that mean? Slot machines at Pari-Mutuels in Miami-Dade and Broward Counties are authorized by the Florida Constitution. Would it require a new Constitutional amendment to authorize it in different Counties, or at locations other than Pari-Mutuels? The Florida Lottery has certain types of games. Would a new Constitutional Amendment be required to change the tickets, add locations, or sell the tickets in a new style? Could the Florida Lottery use its existing authority to add keno? Would “skill-based gaming” be permitted as a variation on slot machines, or would they require a new constitutional amendment? Can slot machine manufacturers even bring out new styles or themes of slot machines? There are far more questions than answers.

If Amendment Three is construed broadly, so as to require an initiative for any new types of gambling in Florida, I believe that would eventually bring gambling at Florida’s pari-mutuels to an end. A few decades ago, slot machines were electromechanical. Today they are electronic, and video poker, video blackjack, etc. have been determined to be slot machines because they contain random number generators. I can’t predict what new types of gambling will occur in the decades to come, but I do know that there will be new types of gambling, and if the Seminoles and/or the rest of the U.S. can keep up, but the Florida pari-mutuels and Florida Lottery can’t, then the pari-mutuels and Lottery will fall by the wayside. Would any significant number of people gamble today at a quasi-casino that only had electromechanical games?

Amendment Three could be construed more narrowly and be interpreted as saying that this would only prevent new people from entering legal gambling in Florida. It could be interpreted as saying that because Florida’s current Constitution specifically permits casino gambling at pari-mutuels and specifically permits the Lottery, that casino gambling is already permitted at those locations (maybe just in Miami Dade and Broward, maybe not). Therefore, while no other new operators can be permitted to operate places where casino gambling as defined above occurs, any type of casino gambling would be permitted at the current locations authorized in Florida’s Constitution. It is impossible to tell at this time what the Amendment actually does.

Also, the wording of the amendment seems perhaps intentionally confusing. As a County Commissioner in Broward County, Florida, and a former State Senator, I am frequently asked questions about the proposed amendments. Broward has generally been supportive of casino gambling. Many people seem to be supporting this amendment because they are supportive of expanded gambling in Florida, frustrated with the inability of the Florida Legislature to expand this gambling, and therefore believe that passing this will give more local control, enabling the voters of Broward to pass expanded gambling.

The summary of the Amendment says that “Florida voters shall have the exclusive right to decide whether to authorize casino gambling”, but unless you follow the cross-reference to Article XI, section 3 of the Florida Constitution, the summary never explains whether the vote is a local vote or a Statewide vote. For example, the Platform Subcommittee of the Broward Democratic Party voted to support Amendment Three, because “#Homerule. Gives citizens the right to decide on casinos being built in their cities, instead of Tallahassee”. That is almost exactly the opposite of what the Amendment does. When I explain that Amendment Three requires a statewide petition drive, followed by a statewide vote (not a local vote) and passage by 60%, Broward voters seem horrified, and then oppose it. Please note that the Supreme Court ruling permitting the existing wording was approved by a vote of 4-2. Two Supreme Court Justices ruled that the Ballot Title and Summary were misleading.

In order to begin the initiative required by Amendment Three, it would require signatures from 8 percent of the voters in each of ½ of the state’s Congressional districts, and 8% of the total voters statewide, based on the number of votes cast in the last Presidential election. This is an amazingly high bar, and normally requires an extremely high expenditure of funds for paid petition gatherers. The Supreme Court of Florida would have to approve the wording of the proposed Petition. If all of this occurs, the proposed initiative would need 60% of the votes cast in order to pass. It is worth noting that many experts believe that Amendment Three will pass despite these obstacles. As of the date that I write this, it is estimated that the supporters of Amendment Three have raised over $27 million dollars, without any well-funded opposition thus far.

It seems quite clear that if Amendment Three does pass, it would be extremely difficult and expensive to try and rewrite the Constitution again to undo or amend this language to permit additional types of “casino gambling” in Florida. It is clear that an investment of tens of millions of dollars would be required to attempt to change the gambling laws, with no guarantee of success. Few if any companies would be willing to make that commitment. It may make sense for the Seminole Tribe to invest over ten million dollars because if Amendment Three passes, they believe that they would have a monopoly on all new types of gambling on Florida, including Sports Betting. It would make far less economic sense for any one company, which would be one of many companies engaging in gambling in Florida, to put up similar dollars without the same exclusivity that the Seminoles (and potentially the Miccosukees) would enjoy.

Finally, one of the biggest questions remaining is whether or not the Seminole Tribe of Florida may suffer from the law of Unintended Consequences. The Seminole Tribe clearly intended Amendment Three to not apply to Seminole Gambling. The wording of the Amendment states “In addition, nothing herein shall be construed to limit the ability of the State to negotiate gaming compacts pursuant to the Federal Indian Gaming Regulatory Act…”(emphasis added) However, because of the wording that is used in the Amendment (and in a twist that only Lawyers can love), this may not be sufficient.

On November 14, 2007, and against my advice, Governor Charlie Crist signed a “Compact” with the Seminole Tribe of Florida. Former Governor Crist is a close friend, and I warned him in advance that the Governor does not have the authority to enter into a compact under the Indian Gaming Regulatory Act (IGRA). The Governor has the authority to negotiate a compact, but he does not have the authority to execute the compact without Legislative approval. When Crist signed the Compact, he was sued five days later by the Florida House of Representatives. The Florida Supreme Court decided this issue in Florida House of Representatives v. The Honorable Charles J. Crist, Jr., (999 So. 2d 601). The Court chose not to take up the general question of whether the Governor has the authority to enter into a Compact with Florida Indian tribes under any circumstances without Legislative approval, although they cited to several other State and Federal decisions, and in each cited case, the Governor was ruled not to have such authority. Following judicial principles of deciding cases on narrow grounds when possible, the Supreme Court ruled that it would violate the Constitutional Separation of Powers for the Governor to enter into a compact with the Indian Tribes when the compact gives the Indians a type of gambling otherwise illegal in Florida. The Court stated at page 613:

“The House claims that the Compact violates the separation of powers on a number             of grounds.8 We find one of them dispositive. The Compact permits the Tribe to                   conduct certain Class III gaming that is prohibited under Florida law. Therefore, the           Compact violates the state’s public policy about the types of gambling that should               be  allowed. We hold that, whatever the Governor’s authority to execute compacts,             it  does not extend so far. The Governor does not have authority to agree to legalize           in some parts of the state, or for some persons, conduct that is otherwise illegal                   throughout the state.”

Crist negotiated a Compact with the Seminoles, but it required Legislative approval or ratification. The wording of Amendment Three only exempts negotiation of a Compact from Amendment Three. Of course, the New Governor of Florida will be able to negotiate a compact with the Seminole or Miccosukee tribes, as Governor Crist did. However, there is nothing in the language of Amendment Three that appears to exempt Legislative approval or ratification from Amendment Three. I believe that it would have been far clearer if Amendment Three said ““In addition, nothing herein shall be construed to limit the ability of the State to negotiate and ratify gaming compacts pursuant to the Federal Indian Gaming Regulatory Act…”(emphasis added). The word ratification is missing from Amendment Three. I know that the Seminoles feel that the wording of Amendment Three is sufficient to cover both negotiations and ratification. I know that other Lawyers who I respect have a different opinion. I offer no conclusion here, but I believe that this is another ambiguity which may need to be decided by the Florida Supreme Court, if Amendment Three passes by the required 60% vote.

Will the Florida racing dates wars between Hialeah and Gulfstream return? Fight between Florida Horsemen and Oxford Downs continues. Gaming financial news

  • “Its Baaack…”  For many years, a regular fight in Tallahassee was the Legislative battle over racing dates between Gulfstream Park and Hialeah Park.  This finally ended when Hialeah ran its last thoroughbred race in 2001.  Hialeah lost its pari-mutuel permit, and then returned as a quarter-horse track.  However, according to the Fort Lauderdale Sun-Sentinel, Hialeah is once again considering thoroughbred racing.  Although Hialeah says that it would like to work cooperatively with Gulfstream, those of us who went through racing date wars wonder if this is the first step towards a renewed racing date battle.  Hialeah has also announced a $60 million dollar expansion to their Casino facility.
  • The fight between United Florida Horsemen ( which includes the Florida Horsemen’s Benevolent and Protective Association, the Florida Thoroughbred Breeders and Owners’ Association, and the Florida Quarter Horse Association) and Oxford Downs continues, according to an excellent article by Carlos Medina in the Ocala Star-Banner.  UFH contends that the Oxford track is not a real pari-mutual, just a front for a card room.  “It’s preposterous.  The State of Florida never ceases to amaze me”, … It’s a phony baloney deal they are pulling off.” said Kent Stirling, President of the FHBPA. The FTBOA has filed for an injunction, alleging that Marion County should not have permitted Oxford Downs to open. Tony Mendola, one of the owners of the track, disputes the allegations. Although Mendola admits that there is currently no clubhouse, permanent restrooms, concessions are limited to water and soda, and the races are minimal, he explains that once the card room and simulcasting are producing revenue, that the facility will improve.
  • According to Bloomberg, Aristocrat Leisure Ltd. of Australia is buying Video Game Technologies, Inc, of Tennessee, for $1.3 billion dollars.  This would increase Aristocrat’s number of gambling machines from 8,200 to 28,400.
  • Moody’s Investors Service has downgraded its outlook for the United States gaming industry from stable to negative.

 

 

 

DCA rules in favor of Magic City on Pari-mutuel permit, racing date battle between Gulfstram and Calder ends, New Cruise-to-Nowhere in Jacksonville, Steve Geller speeches

The last month has been very busy from both a gaming law perspective here in Florida, both in terms of new issues to deal with in Florida, as well as my own speaking schedule.

  • The First District Court of Appeals in Florida has recently entered a ruling on a long-standing dispute over whether West Flagler Associates, Ltd. In Miami, the parent company of Magic City Casino, is entitled under Florida law to one or more summer jai-alai permits under a law that has existed for many years, but has not been used until the last three or four years. There have been different interpretations of this law, and the DCA entered an order overruling the interpretation of the Florida Division of Pari-Mutuel Wagering. According to Miami Today, The DCA ordered the DPMW to reconsider its ruling; it is not clear whether the DPMW will actually issue the permit. As of the time of writing this blog, it is not clear whether either side will seek to appeal the ruling to the Florida Supreme Court. A similar case involving an application from Hialeah Park is currently pending in front of the Third DCA.
  • The battle over thoroughbred racing dates in Miami Dade County has existed since before the County was called Miami Dade County. It now appears to be over. Originally, this was a three way battle between Hialeah, Gulfstream, and Calder racetracks. Hialeah then ceased thoroughbred racing, and Gulfstream and Calder remained to fight. Now, according to the Tampa Times, the parent company of Gulfstream (the Stronach Group), and the parent company of Calder (Churchill Downs) have reached an agreement where Churchill Downs will no longer operate thoroughbred racing at Calder. Instead, the Stronach Group will operate the racing dates located at Calder, while Churchill Downs will continue to operate the casino operations at Calder. Under Florida law, there must be a minimum of 40 days of thoroughbred racing at Calder for them to continue to keep their cardroom and casino permits. This deal also provides for Churchill Downs to sell its 50% stake in HRTV (a racing broadcast network) to Stronach.
  • According to Jacksonville.com (the Florida Times Union), a new gambling boat based in Mayport is set to begin operations. Cruises to Nowhere are governed by the Johnson act. Gambling is only permitted outside of the territorial limits of the United States (three miles from Jacksonville). While South Florida was once home to many Cruises to Nowhere, the presence of Indian and pari-mutuel casinos has greatly diminished the presence of Cruises to Nowhere in Florida.
  • According to multiple news sources, Sheldon Adelson , casino magnate from the Las Vegas Sands, has contributed $2.5 million dollars to the Drug Free Florida Committee, a group formed to oppose Amendment Two to the Florida Constitution. Amendment Two would permit the legal use of Medical Marijuana. The major committee funding efforts to pass Amendment Two is United for Care. John Morgan is both the major funder of United for Care, and is the senior Partner of Morgan and Morgan, the firm which employs and has been so helpful to Governor Charlie Crist. Adelson has been a substantial contributor to Governor Rick Scott. It is widely speculated that Adelson’s contribution to Drug Free Florida is designed to help Scott in his reelection campaign.
  • I have had a busy early summer. On May 20 I was at the Borgata Hotel Casino in Atlantic City as the Moderator of the East Coast Gaming Conference panel entitled “Florida- Ripe for Major Expansion?” The Panelists were Florida State Representative Jim Waldman, the Ranking Democrat on the Florida House Gaming Committee; Isadore (“Izzy”) Havenick, VP of Magic City Casino and Naples /Fort Myers Dog track; Lonny Powell, CEO of the Florida Thoroughbred Breeders and Owners Association; and Rod Matamedi, Senior Economic Associate, REMI. I also attended the National Council of Legislators from Gaming States meeting at the Hyatt Regency Hotel in La Jolla, where I spoke on several committees. I spoke at the Pari-Mutuel Committee on innovations in pari-mutuel wagering, I gave the Committee on Casinos an update on enforcement in Florida of the ban on “Internet Cafes”, and I spoke to the State-Federal Relations Committee on the current state of federal Internet Gambling laws, and my prognosis for additional Federal Legislation this year. To the best of my recollection, this was the only time any speaker has spoken at three different committees at any NCLGS meeting.

 

 

Steve Geller, Esq., is the former Minority Leader of the Florida Senate, and a Shareholder at Greenspoon Marder, P.A. He served on the Gaming committees of the Florida Legislature during the entire 20 years that he served in the House of Representatives and Senate, including serving as Chair of the Committee. He is an “A-V” rated lawyer, and chairs the Gaming Law Practice Group at Greenspoon Marder, where he has represented State and National clients. Greenspoon Marder is a law firm with approximately 160 attorneys in Florida, and the Gaming Law Practice Group can call on the expertise of other attorneys in the firm, in areas such as transactional law, labor and employment law, litigation, appellate law, etc.