DeSantis’ gambling deal means billions for Florida, but is it enough?

TALLAHASSEE — Gov. Ron DeSantis’ deal-making skills are getting a test.

DeSantis inked a $500-million-a-year gambling agreement with the Seminole Tribe of Florida, which is expected to generate at least $2.5 billion during the first five years of the deal.

Some lawmakers, though, think the state could have done better, given how much gambling the Seminole Tribe will get to control.

“This is the dream deal of the tribe,” state Jeff Brandes, R-St. Petersburg, said. “This was the easiest deal for the state — not the best. But this was a great deal for the tribe.”

The Florida Legislature kicked off a special session on gambling Monday that could have far-reaching ramifications for the state. Lawmakers want to work quickly. House Speaker Chris Sprowls said the deal could be ratified by Wednesday.

In the 30-year deal, known as a “compact,” the Seminole Tribe agreed to pay at least $500 million a year to the state, which is up from about $350 million the Seminoles paid under an older agreement. Those payments are made in exchange for gambling exclusivity.

DeSantis’ office has been lobbying lawmakers on both sides of the aisle to secure the deal’s passage, and some representatives think the Seminoles should be paying more, said state Rep. Evan Jenne, one of the House Democrat’s leaders.

“That is their sticking point as to why they don’t plan on voting for the compact as it stands, both Republican and Democrat,” said Jenne, D-Dania Beach.

But Jenne added, “If we don’t sign the compact, we get nothing.”

Visitors play the machines at the Seminole Hard Rock Hotel & Casino in the week of May 12, 2021. (Courtesy of Seminole Hard Rock Hotel & Casino)

Visitors play the machines at the Seminole Hard Rock Hotel & Casino in the week of May 12, 2021. (Courtesy of Seminole Hard Rock Hotel & Casino) (Seminole Hard Rock Hotel & Casino/Courtesy)

The Seminoles are in line to be the biggest winners of the special session. The tribe will have control over sports betting, get to offer craps and roulette, and build three new casinos on its Hollywood reservation.

DeSantis thinks the deal will be a boon for the state’s coffers, hailing the agreement as “larger and more expansive than any other gaming compact in U.S. history.”

The previous deal signed in 2010 was also supposed to be for 30 years, but fell apart in 2019 when the Tribe stopped paying the state over what it said was a breach of the compact — the practice of allowing other gambling operations to host games similar to blackjack and other banked card games. The Tribe was supposed to have a monopoly on banked card games under the original deal.

In the currently proposed deal, sports betting alone could account for more than $100 million of the revenue, according to an analysis from state economists. That would be more than double the $49.4 million brought in by New Jersey, the largest legal sports betting market according to the National Conference of State Legislatures, in 2020 when many sports leagues were shuttered due to the coronavirus pandemic.

That projection is based on a tax rate of 13.75% of the total winnings on bets placed directly with the Tribe’s software, which can be done anywhere in the state. Most states with legalized sports betting have tax rates ranging from 5% to 20%, according to the NCSL. And unlike other states, Florida would be granting a monopoly to the Tribe on the new revenue stream.

Rep. Randy Fine, chairman of the House Select Committee on Gaming, defended the latest agreement but said the 2010 version tied the state’s hands.

“The only meaningful exclusivity that we’re giving the tribe is sports betting. Everything else is sort of what it already is,” said Fine, R-Brevard County. “We’re hampered by what I would consider a terrible compact done in 2010. So we’re not on a green field where we can do whatever we want.”

Bob Jarvis, a gambling expert at Nova Southeastern University, said he thinks the deal could be worth up to $1 billion a year given the Seminoles are essentially being handed a monopoly over sports betting.

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“The tribe is better at negotiations than the state,” Jarvis said. “Clearly this is not enough money.”

If the Legislature approves, the deal will face additional regulatory hurdles. The federal government must sign off.

It also could face legal challenges.

No Casinos, an anti-gambling group, said only voters can approve sports betting under Amendment 3, which passed in 2018.

Supporters of the gambling deal say sports betting can be approved by the Legislature because of a provision in Amendment 3 that allows the state to negotiate gambling deals with the Seminole Tribe.

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