Jac VerSteeg: Sen. Joe Abruzzo’s ‘wide open’ alternative to the Seminole Compact

What happens if the Florida Legislature refuses to ratify the Seminole Compact that Gov. Rick Scott negotiated with the Tribe?

No one really knows, of course, but state Sen. Joe Abruzzo, D-Boynton Beach, offered a tantalizing hint toward the end of a recent workshop by the Senate’s Regulated Industries Committee.

Addressing Jim Allen, the CEO of Seminole Gaming, Sen. Abruzzo said:

“In looking at this and all the moving parts and how difficult this issue is, we hear a lot about the compact and a lot about parity and things of that nature.

“…What if we just looked at giving parity to all the pari-mutuels and giving (the Seminole Tribe) the ability to lead it, to have the games you want and not have to pay any taxes to the state? Just open it wide open. Let the existing Florida businesses that have been working and playing and really leading the industry have the games that you have and you would be able to operate the way that you wanted.

“What would the revenue impact be to the state if Palm Beach and Broward, Miami-Dade and other areas around the state had the games? I’m curious about that. Secondly, I do have to add that I strongly believe that the Orlando area should be excluded from any type of gaming area. That’s where we have the leading (family) amusement not only in Florida and the country but around the world.

“That aside, what would be your feelings on that publicly?”

Mr. Allen replied: “If the state of Florida determined that it wanted to expand gambling throughout the state…I would suggest to you the state could probably generate more income.

“…And if that’s what the state’s direction is, then frankly, that’s the clarity the tribe is looking for. Because obviously, under federal law, the tribe would then no longer be making any guarantees and paying any revenue share. And if that meant that now there is gambling all through South Florida or the Panhandle or Jacksonville or Tampa or whatever that may be, obviously over in the Naples area, the tribe certainly respects and recognizes that particular business model.”

Wow. That’s the kind of radical deregulation you’d expect to hear from a Republican — except Republicans tend to not like deregulation that deregulates behavior that carries moral baggage, as gambling does.

Still, Abruzzo’s vision would seem to have some practical benefits. (One of them might be political support from pari-mutuels as he prepares for a possible faceoff with Sen. Maria Sachs, D-Delray Beach, in a newly redrawn Senate seat.)

Other than that, the most compelling reason is that if the Legislature doesn’t ratify the Seminole Compact, then it loses the revenue it promised — $3 billion over seven years. That is roughly three times what the recently expired Compact guaranteed. Losing that revenue would blow a huge hole in the state budget and kill any hope that Gov. Scott could get his $1 billion tax cut.

If the state could replace that revenue — or even increase it — by providing a “wide open” gambling marketplace to pari-mutuels, there would be some impetus to do so.

And remember that a lot of the opposition to the proposed compact is not morality-based. Rather, it is a feeling that existing pari-mutuels have been getting the shaft.

For example, during the same workshop at which Sen. Abruzzo made his comments, Sen. Jack Latvala, R-Clearwater, expressed opposition to the Compact because it did nothing for pari-mutuels outside of South Florida. His concern was echoed by Sen. Garrett Richter, R-Naples.

The state has to keep restrictions on all those other pari-mutuels, or else the Tribe would object to losing exclusivity for key games. But that would not be an issue if there were no Compact.

By focusing on benefits to existing pari-mutuels, including those outside of South Florida that do not have the right to install slot machines, Abruzzo’s solution comes with some built-in support. And, if Seminole Gambling CEO Allen is correct, the Tribe would have no objections. And why should it, since the Seminoles would keep the money they had been sending to the state.

But obviously, there are some huge hurdles as well. It is far from clear what kinds of games the pari-mutuels would be able to offer. Would they all get slots? Would they all get blackjack, which only tribal casinos can offer now? What about roulette and craps, which the proposed Compact would permit exclusively at Seminole casinos?

Settling all those issues would require legislative action — as well as resolution of a number of lawsuits percolating in the background. Getting the Legislature to approve a “wide open” gaming model could prove to be as difficult as getting the Legislature to act on all the side-deals and secondary legislation that are contemplated by the current Compact proposal.

Those include the possibility of lowering the tax rate on pari-mutuels to 25 percent from 35 percent, bringing a new casino to Miami-Dade, installing slots at the Palm Beach Kennel Club and…on and on.

Would the Legislature really deregulate pari-mutuels to the point where they can offer whatever games they want? Seems unlikely at first. But if the Seminole Compact craps out, radical deregulation could start to look like a plausible bet.

***

Jac Wilder VerSteeg is a columnist for The South Florida Sun Sentinel, former deputy editorial page editor for The Palm Beach Post and former editor of Context Florida. Column courtesy of Context Florida.