Wednesday, November 30, 2016

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2016-11-30 / Top News

All bets are off 

With a Supreme court decision looming, and the Seminole tribe agreement with the state in dispute, Florida has new and unexpected gambling issues 
BY ROGER WILLIAMS 
WHILE THE MANAGER OF LEE COUNTY’S Lucky CafĂ©, hunkered in a Cape Coral strip mall beside a Chinese restaurant, welcomed visitors through her neon-lit door into the darkened interior of a gambling den with about 70 game- sporting computer terminals last week, Florida’s Supreme Court judges continued to wrestle behind closed doors with a case that could change everything about gambling in the Sunshine State. At the Lucky, visitors could purchase cards for cash, use the ATM machine, eat and drink for free (including beer and wine), and play a wide variety of chance games at various betting levels off the colorful screen displays: no-minimum bets, 50-cent bets or $1 minimum bets on some games. Then they could cash out and leave with fresh American greenback — that is, if they’d gotten lucky.
In the Supreme Court, meanwhile, the judges could announce their decision as early as Dec. 1, or on any subsequent Thursday, which is when the Supreme Court always makes public new case law.

The Palm Beach Kennel Club in West Palm Beach has joined in a lawsuit that might end up allowing the club to offer slot machines to its customers. 
COURTESY PHOTO The Palm Beach Kennel Club in West Palm Beach has joined in a lawsuit that might end up allowing the club to offer slot machines to its customers. COURTESY PHOTO In this case: whether a business in Gadsden Countyin the panhandle, population about 47,000, has the right to offer slot machines to gamers merely because county voters approved it, and not by an act of the state legislature or a constitutional amendment passed by Florida voters.
Unfortunately, such an act would appear to violate a 2010 compact in which the state promised the Seminole Tribe of Florida exclusive rights to slots and (for five years, after which no one would have them) covered card games including baccarat, blackjack and chemin de fer, in return for a cut of profits that amounts to billions of dollars over the 20-year term of the compact.

&ldquo;In November 2012, the voters voted in favor of a referendum to allow slot machines in Palm Beach County ... The current gambling public wants more than racing and poker and PBKC should have the right to offer gambling products that their customers want.&rdquo; &mdash; Theresa Hume, spokeswoman for the Palm Beach Kennel Club “In November 2012, the voters voted in favor of a referendum to allow slot machines in Palm Beach County ... The current gambling public wants more than racing and poker and PBKC should have the right to offer gambling products that their customers want.” — Theresa Hume, spokeswoman for the Palm Beach Kennel Club But now all bets could be off. The Tribe continues card games that were meant to be dropped in 2015 and has threatened to quit providing Florida with any cut of profits from any gaming. Both pari-mutuels offering card games the Seminoles see as their exclusive purvey (a judge agreed with the Tribe on Nov. 9) and the bid for opening slot machine operations to others have brought the long-standing arrangement between Tribe and state to a sudden halt.
The Tribe is unequivocal: “Since the State elected to permit a type of banked card game to be played, the protection provided for the Tribe … has been triggered and the Tribe is therefore permitted to continue offering its banked card games (until 2030),” wrote James E. Billie, then chairman of the Tribal Council, in a June 2015 letter to Gov. Rick Scott and members of the legislature.

&ldquo;People say we need that for economic development, but the fact is we have economic development. We&rsquo;re growing almost as fast as in the 10 years before the bust, and our tourism has broken records every year for last eight years in terms of money spent or people coming here ... So we don&rsquo;t need more gaming.&rdquo; &mdash; Frank Mann, Lee County commissioner “People say we need that for economic development, but the fact is we have economic development. We’re growing almost as fast as in the 10 years before the bust, and our tourism has broken records every year for last eight years in terms of money spent or people coming here ... So we don’t need more gaming.” — Frank Mann, Lee County commissioner In addition, he noted, the Tribe now has a right “to stop making exclusivity payments to the State.”
But the legislature failed to resolve the problem in the last session — the next one begins in March — and now the Supreme Court, in effect, will referee the fight. 
The contenders 
The Palm Beach Kennel Club has joined the Gadsden County entrepreneur, known as Gretna Racing LLC, in the lawsuit.
As it stands, slots exist only in Indian Tribal venues, or in Miami-Dade and Broward counties.
If judges agree that Gadsden can have slot machines, says Paul Seago, executive director of NoCasinos, a nonprofit agency devoted to restricting gambling in the state to its current footprint in Tribal-owned venues or authorized pari-mutuel businesses, “it would mean an unprecedented change in gambling in the state of Florida.”
Already, voters in six other counties, including Lee and Palm Beach, would likely have the chance to bring in slots, too — to the Palm Beach Kennel Club and to Lee’s Bonita-Fort Myers Corp. that hosts a greyhound track, for example — if Gadsden also gets them.
Mr. Seago and others call this “gambling creep,” and argue from an economic standpoint (not a moral one, he says) that the reality of more slots, and then more casinos would be disastrous for the state and its economy.
“So in Gadsden County they got barrel racing approved — there had never been a pari-mutuel event before. And now they have flag-drop horse racing. They plough a field, someone stands out with a flag, and two horse have at it, like drag racers.”
That was a carefully calculated strategy, he says.
“They did it so they could open a card room, and then they applied for a slot machine.
“The state said, ‘No.’ So they appealed to the First District Court of Appeals, the court found for them, then a new court said no.”
Now, they have appealed to the state Supreme Court, in a case called ‘Gretna Racing versus the Florida Department of Business and Professional Regulations.’”
Economists are not happy.
A 2015 report by state economists cites “cannibalization” — creating a demand for one product by killing demand for another — as a chief concern in looking at the economic value of gambling in any Florida community.
As it stands, there are 40 operating licenses at 28 pari-mutuel locations where gamers can gamble on horse racing, harness and quarter-horse racing, greyhound racing or jai alai games.
And there are 24 pari-mutuel facilities that can run card-room poker games, along with slot gaming in seven parimutuels. Those are located exclusively in Broward and Miami-Dade, a rule established by the legislature in 2004, and agreed to by the Seminole Tribe.
The 2010 compact with the Tribe called for covered or banked games at seven Seminole venues: in Glades, Broward (three), Collier, Hendry and Hillsborough counties.
With all of that, by 2013-14, Florida ranked third in the top 10 states for revenue received from gambling, with $1.694 billion, behind Pennsylvania and New York.
But it’s not enough — at least not enough to be fair, argues Theresa Hume, spokeswoman for the Palm Beach Kennel Club. In addition to equal opportunity, it’s also a matter of public will for a non-Tribal business outside Broward and Miami-Dade to have a chance at competition.
“In November 2012, the voters voted in favor of a referendum to allow slot machines in Palm Beach County,” she says. “This was supported by the Palm Beach County Board of County Commissionersand other county organizations both public and private. The current gambling public wants more than racing and poker and PBKC should have the right to offer gambling products that their customers want.”
Current state law allows off-reservation casinos with slot machines in Miami-Dade and Broward counties but nowhere else, and that isn’t fair either, she suggests.
“The Palm Beach Kennel Club needs additional products to survive. Like any business, PBKC needs to evolve with the times and demands of their patrons to compete. The addition of slot machines will level the playing field for PBKC with its competitors in Broward and Miami-Dade counties. Local residents wouldn’t have to leave the county with potential tax dollars that could stay in Palm Beach County. With additional gaming, PBKC would create a highly significant economic impact in terms of jobs, taxes, tourism and goods and services.”
Her version of benefits is a matter of sharp dispute; those arguing against expanded gambling generally point first to the economic catastrophe of Atlantic City, N.J., where city leaders brought in casino gambling in the 1980s thinking it would boost their struggling economy and then watched the city die around them. Small businesses disappeared, jobs disappeared and money vanished into the casinos without trickling out into the surrounding communities. 
The compact 
Economics aside, the legal problem with allowing slots outside the tribal venues — and banked cards games, too — is this: in 2010, Gov. Rick Scott and the legislature signed a compact with the Seminole Tribe accepting billions of dollars over a 20-year period in return for a state guarantee that the Tribe would be the sole purveyor of slots and banked card games, and those card games would cease to be offered starting in 2015.
In a banked card game, the house or business serves as a “bank,” and players must play against the bank and take their winnings from it.
“The 2010 compact was supposed to be a firewall against gambling creep,” says Mr. Seago, “and in some ways it was, until some smart lawyers decided they could get around it.”
Almost immediately, pari-mutuel gambling operations began to introduce card games they claim were not banked — the cards were electronic, for example, and the “bank” might not be an employee of the house.
The Seminoles complained, and then ultimately insisted they no longer had the exclusivity they’d been promised, so they no longer had to pay the state a cut of the money and they could continue to offer banked card games such as blackjack and baccarat.
Meanwhile, internet cafes such as the Lucky, outlawed by Gov. Rick Scott and the legislature in 2013, exist in what some call a “gray area” of the state’s complicated gambling laws — although both Mr. Seago and the Lucky manager, who did not give her name, acknowledge they’re illegal but operate with little current enforcement or monitoring.
“Even the state of Florida says they’re illegal, but in certain towns you can have them here — our people want them so, you know, we’re going to let them,” the Lucky manager explains.
Enforcement at this point is nearly non-existent when it comes to Internet Cafes.
Lee County’s Sheriff Mike Scott declined a request to talk about them, nor had any enforcement or operations occurred at any of several addresses where internet cafes exist in the county between last Jan. 1 and June 1 of this year, said spokeswoman Sgt. Anita Iriarte, or in two previous years.
In Collier County, “We monitor internet cafes to ensure compliance, and we also respond to complaints when we receive them. We partner with the Florida Division of Alcoholic Beverages in some of these investigations,” said Lt. John Poling of the Vice and Narcotics Bureau.
In Lee County, although huge sums of money would be at stake should the Supreme Court decide Gadsden County could introduce slots, “local regulation of internet cafes has not been a recent topic of discussion at a county staff level or with the Lee Board of County Commissioners,” noted Betsy Clayton, county spokeswoman. “The state regulates that activity.”
That doesn’t mean some commissioners aren’t thinking about it, though, and watching the Supreme Court briefings on Thursdays at 11 a.m.
“I do not want to see Florida and in my case Lee County open its doors to other types of card games or slots,” says Commissioner Frank Mann.
“People say we need that for economic development, but the fact is we have economic development. We’re growing almost as fast as in the 10 years before the bust, and our tourism has broken records every year for last eight years in terms of money spent or people coming here.
“So we don’t need more gaming.”
At the state level, “the Department of Business and Professional Regulation does not license or regulate Internet Cafes,” said Kathleen Keenan, the communications director.
Instead, they sue to stop slots outside of Tribal venues. And if they succeed, the picture for internet cafes could change suddenly and for the worse, as far as their operators are concerned.
Until then they carry on, seeking to offer what enticements they can to bring in locals and visitors who don’t want to drive to casinos or pari-mutuels.
At the Lucky, there is no liquor license so the beer and wine are free, along with food, under a “host” arrangement. That way, it doesn’t run afoul of liquor licensing laws. And the payoffs come in cash on the barrel, or the computer terminal as the case may be.
“That thing’s ready to pop,” the manager says, pointing to an electronic wall sign where a neon figure nearing $2,700 glitters across the big room. The sum could be had by winning at a non-minimum or 50-cent minimum game.
“But to win that other one,” she adds, pointing elsewhere, you have to pay $1 a bet.”
In other words, you have to bet big. ¦