Summary
Gov. Crist had until 11:59 pm tonight to reach a new agreement with the Seminoles. He did, giving them unlimited slot machines in seven locations. But it also gives them blackjack and other table games in all seven casinos, which the Legislature had limited to two counties. Therefore, the new Compact is just as invalid as the last one he signed, unless the Legislature signs off on this one, to get the billions of dollars of new revenue.
Analysis
Gov. Charlie Crist signed a tribal-state compact in 2007 letting the Seminoles have slot machines and banking card games, like blackjack. But the Florida Supreme Court ruled, correctly, that tribes can only operate games permitted by state law -- Florida law allows slot machines in parimutuel outlets in two counties, but no one can offer blackjack. The Court held the Compact invalid, because only the State Legislature can decide what forms of gaming are legal in the state. In light of threats, of questionable legality, by the federal Secretary of Interior to impose rules for slot machines without the state's input or revenue sharing, the State Legislature authorized Crist to enter into a new Compact by 11:59 on August 31, 2009. This he did, with only a few hours to spare. The Compact allows unlimited number of banking card games and slot machines. The latter is good news for manufacturers, like IGT, Bally Technologies, WMS Industries, Sigma and Aristocrat (Australia: ALL, ADR: ARLUF), as can be seen by the size of the revenue sharing, with predictions of new gaming revenue in the billions each year. But the former makes this Compact just as invalid as the first one.
The State Legislature authorized the Governor to enter into a Compact which allowed blackjack and similar games only in Broward County and Hillsborough County. As the Florida Supreme Court has already ruled, the Governor simply does not have the power to authorize other forms of gambling. There are some additional discrepancies between what the Legislature authorized and the Governor agreed to with the tribe; the strangest one is putting a limit of only $100,000 on patron tort claims where the Legislature required that injured patrons could receive up to $1 million. The revenue sharing is also different, but still a minimum of 12%, reaching up to 25% of gaming win over $2.25 billion in Broward County. So the Legislature will have to decide if they can live with this, or hope for another, better deal. And they only have an up or down vote.
My money is on them reluctantly approving it, with side requirements for more insurance coverage for patrons and better tax breaks for competing non-Indian gaming facilities.
I. Nelson Rose consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
