No sure bets as Florida lawmakers consider DeSantis’ gaming compact in special session

Gov. Ron DeSantis, a nationally ascendant Republican, is close to nailing down a long-sought gaming deal with the Seminole Tribe of Florida that would expand gaming in tribal facilities and usher online sports betting into the state for the first time.

The gaming compact — if ratified by the state Legislature next week and later approved by federal regulators — would make Florida the largest state in the nation to legalize sports betting, and the Tribe would be the exclusive operator of the digital sports books in Florida for the next 30 years. The Tribe would also be allowed to build three more casinos on tribal property in coming years.

In exchange for all the components of the agreement, the Tribe would give the state a minimum of $500 million in annual payments, an amount that could go up as the market and profits expand.

But there are no sure bets, certainly not about the future of gaming in Florida, where competing interests, political cash, powerful players and lawmakers’ morals and ideologies could make or break a deal that has been more than a year in the making.

“Now the question is, will we finish it up? I believe we will get it done. But I’m not sure I would ever classify it as easy,” said Senate President Wilton Simpson, a Trilby Republican who has made achieving a gaming compact and bringing sports betting to the state a top priority of his term.

Is the deal good enough?

State lawmakers are currently studying and preparing to vote on the compact ahead of next week’s special session. They will also update the state’s gaming laws by considering legislation to establish a Gaming Control Commission and another bill to end a condition that jai-alai frontons, and harness and quarter horse tracks run live races to operate slot machines and cardrooms.

But many concerns remain about the gaming proposals. Chief among them is the possibility of legal challenges as opponents argue the compact violates a constitutional amendment passed by voters in 2018 that requires voters to approve the expansion of all new casino games.

Critics of the compact are also scrutinizing language that could open the door for the Tribe to expand mobile betting to not just sports but all casino games. In Miami-Dade, lawmakers have lingering worries that the compact could lead to new casinos at resorts like the Fontainebleau.

Some of the apprehension revolves around one simple question: Is this a good enough deal for Floridians?

“I don’t know that this is the right compact. I think this was the easiest deal we could have gotten but it is not the best deal,” said Sen. Jeff Brandes, a St. Petersburg Republican. “I think this is the Tribe’s dream deal. This is not Florida’s dream deal.”

Gaming in Florida today

Today, the Seminole Tribe owns and operates the Seminole Hard Rock Hotel & Casino near Hollywood and six other casinos in Florida. But it is not sharing any of its revenue with the state.

The Tribe stopped paying the state $350 million in annual revenue sharing in 2019, after former Gov. Rick Scott refused to crack down on parimutuels that put in card games that mimicked ones that were supposed to be exclusive to tribe-owned casinos under a 2010 revenue-sharing agreement with the state.

Under the federal Indian Gaming Regulatory Act, which regulates gaming agreements between states and Native American Tribes, the state must offer “meaningful concessions” in exchange for the Tribe’s revenue share.

Now, DeSantis has signed a 75-page compact agreement with the Tribe that opens the door for an expansion of the Tribe’s gaming empire by giving it the exclusive right to operate banked card games, craps and roulette at all of its casinos and to build three more casinos on its existing reservation in Hollywood.

In addition, the agreement would make the Tribe the exclusive mobile sports betting hub in Florida. Anyone who is over the age of 21 and located within the state would be able to place bets on their mobile devices primarily through the Hard Rock Digital App. The bets would be received and processed by servers located at tribal casinos.

The deal would also inject needed cash into Florida’s parimutuel industry by allowing it to operate the mobile sports app under their brand in exchange for 60% of the proceeds. The bets would still be placed through the Tribe’s server.

But critics of the deal say it violates a 2018 constitutional amendment that gave Florida voters the “exclusive right to decide whether to authorize casino gambling in the state of Florida,” unless the expanded casino games are authorized in a gaming compact between the state and a Native American tribe.

Earlier in 2018, the U.S. Supreme Court allowed sports betting in Florida and other states, opening the door to allowing the Tribe to introduce it as part of a new gaming compact with the state and bring it closer to its ultimate goals of offering online casino games, the more lucrative product.

Florida’s gaming politics

Portions of the deal appear to be somewhat of a policy shift for DeSantis.

When he was running for governor in 2018, DeSantis didn’t really explain what he would support or oppose on gaming if elected. At that time, his team only said that DeSantis did “not advocate for the expansion of gambling” and that Florida “must remain a family friendly state.”

Three years later, DeSantis is calling the compact he signed “larger and more expansive than any other gaming compact in U.S. history.” If approved, it is expected to produce over $6 billion over the next decade, which DeSantis says will “expand economic opportunity for all Floridians.”

DeSantis’ spokeswoman Taryn Fenske said it would be “inaccurate” to say the governor had a change of heart because the “footprint of traditional casino gambling has not expanded at all in Florida under the DeSantis administration.”

“Online casino gambling remains illegal under state law,” Fenske said.

While negotiating the compact, the governor was “very adamant” that he did not want Florida to turn into Las Vegas or have people playing actual casino-style games in their living room through their mobile devices, according to Sen. Travis Hutson, a St. Augustine Republican who was in the room with Simpson and staff during some of the negotiations.

“But he [DeSantis] recognized that sports gaming was taking off and that everybody is doing sports betting in other states and that Florida was going to be behind the eight ball if we didn’t do anything,” Hutson said in an interview.

If approved, the compact would make Florida the most populous state in the nation to offer mobile sports betting, which has now been authorized in 29 states.

The Tribe has been building support through a 30-second advertising campaign. It touts the agreement as “historic” and through a spokeswoman, the Tribe said the agreement “keeps Florida family friendly by delivering the most revenue share with the least amount of gaming.”

Cellphone slot games?

Language at the end of the compact agreement, however, says the Tribe and the state can return to the bargaining table in 36 months to consider amending the compact to authorize the Tribe to operate mobile gaming for not only sports betting but “all types of Covered Games online or via mobile devices to players physically located in the state.”

“What Floridians should think about is: Do they want gambling to remain in the three dozen places where it happens today — physical locations — or do they want gambling on their cellphones? First sports betting, then potentially slot machines,” said Rep. Randy Fine, R-Palm Bay, a longtime gaming industry executive who is now retired.

Les Bernal, national director of Stop Predatory Gambling in Washington, said slot machines in cellphones has always been the “endgame” for the Tribe.

“They’ve really wanted to go online for a long time, but the public support has not been there for online gambling,” Bernal said. “And when we say online gambling, we’re not really talking about sports. We’re talking about online slots, roulette and full casino games, because that’s where the money is.”

Fenske said any suggestions that the compact will lead to “slot machines on cell phones are false and deceptive,” adding that casino gambling could not be added in the future without a new agreement and ratification by the Legislature.

But for some Republican lawmakers, a possible gaming expansion is cause for moral heartburn and pause.

“I am concerned about consumers and the impact on families or the sector that is very addicted and the damages that could come,” said Sen. Dennis Baxley, R-Ocala. “I look at it as what’s good for families and for Florida’s future because it is a long-term agreement, 30 years.”

Others are looking at it more broadly and are focusing on the “business terms.” For instance, the Tribe’s revenue share rate on sports betting under the plan would be somewhere between 10% and 15%.

“So is a monopoly on sports betting for 13% a good deal? I think that’s the question that people need to form an opinion on,” Fine said.

DeSantis likes the terms. His office said the Tribe will be paying the state “an above-average revenue share rate on sports betting.”

“Most states receive revenue between 6% and 15% from sportsbook operators. No tribe has agreed to pay more than 13.75% (Connecticut) — and Florida’s Indian Compact rate is exactly the same: 13.75%,” his office said.

A local ripple effect

The gaming compact would also allow the transfer of parimutuel slot machine licenses within Miami-Dade and Broward counties, language that could open the door to former President Donald Trump purchasing an existing slot machine license and transferring it to his golf resort in Doral.

In a surprise announcement Monday, Trump endorsed Simpson for agriculture commissioner, a position Simpson is rumored to be seeking but which he has yet to announce. The endorsement is a potential signal that Trump is fond of Simpson’s efforts in the Senate that could benefit his resort empire.

When asked, DeSantis’ office did not say if the governor supported or opposed the possibility of a Trump gambling hub in Doral. His office only said the “issuance and relocation of slot machine licenses off tribal lands continues to be governed and limited by the Florida Statutes.”

Under the proposed agreement, the Tribe also would not object to moving licenses within 15 miles of an existing casino in Broward County. That language is believed to be for Jeffrey Soffer, the real estate mogul, to transfer his casino permit to the Fontainebleau Hotel on Miami Beach. Soffer owns The Big Easy casino in Hallandale Beach, which cut a $100,000 check to DeSantis’ political committee in the midst of negotiations.

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However, the move would require legislative approval in a separate parimutuel bill, which Simpson says is off the table for next week because the issue is “very, very divisive.”

“If we would have taken up the issue of portability, it would have created an environment that may have made this so big, we couldn’t have gotten the compact done,” Simpson said.

John Sowinski, director of No Casinos, which pushed for the anti-gambling amendment in 2018, fears the door is still open for it to happen.

“I trust the best intentions of legislative leaders who say we are not authorizing this and we don’t want to have portability, but the compact leaves the door open to it,” he said. “If we’re going to etch something in stone, it ought to be etched in stone in a way that closes doors.”

When asked if the issue could come back next year, Simpson said he has not “given that any thought yet.” He added that he values and will consider senators’ input on the issue.

“I have not seen any of my members push on this issue,” he said.

Some in the Miami-Dade delegation, however, are concerned that dormant parimutuel permits could be revived.

“My position is, candidly, district-selfish. We don’t want a casino in Miami Beach,” Sen. Jason Pizzo, D-North Miami Beach, said in a text message. “I understand portability is off the table, so far, but I’m also concerned about dormant licenses/permits being resurrected.”

House Speaker Chris Sprowls did not immediately respond to requests seeking comment on the compact’s terms.

Herald/Times Bureau Chief Mary Ellen Klas contributed to this report.