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US – Seminoles dangle $1.8bn ‘economic reward’ to ease gambling compact home

By - 8 February 2016

The Seminole Tribe of Florida is looking to whet the appetite of Florida’s lawmakers with the promise of a huge $1.8bn expansion at the Seminole Hardrock Casino Hollywood which would include a huge, guitar-shaped hotel.

The proposal is seen as an ‘economic reward’ offered by the tribe in return for a continuation of a state-wide monopoly for certain casino games which is up for renewal. The tribe’s proposal includes an 800-room, 36-floor silver, guitar-shaped hotel along with five new restaurants, including a new Hard Rock Cafe, a buffet, dessert shop, nightclub and Swamp bar. The project would create 19,452 jobs, including 4,867 full-time positions and 14,585 construction jobs. Its fruition depends on the granting of a 20-year deal which would give the Seminole tribe exclusive rights to operate blackjack, craps and roulette in its seven casinos.

The deal has already been signed off between Governor Rick Scott and Seminole Chairman James Billie but is yet to be approved by the State Legislature.

Governor Scott said: “I think this is the biggest compact ever signed in this country. I think it’s fair to the state of Florida and it’s fair to the Seminoles. What the Seminoles have done in the state is remarkable. This compact will have a positive impact on job growth. Now it’s up to the House and Senate to make their decision.”

Seminole Gaming CEO James Allen added: “The Seminoles have done what we said we would do. We have created something that is, I think, an international tourist destination and an integrated resort that’s not just about gaming. This will rival not just anything here in the state of Florida, but Atlantis and anything in the world. The tribe has the financial resources to do it as well or better than anybody. We need the support of the governor in order to move this on but we are optimistic.”

The deal would provide Florida with $3bn over seven years starting in 2017 and structured on a sliding scale that increases as the tribe makes more profit.

Neither the House nor Senate have yet drafted legislation to approve any gambling bill. Indeed the House has said it is examining three different gambling bills, including one that would allow a new casino in Miami and let a Palm Beach County track add up to 750 slot machines. The tribe though could be allowed to operate an average of 3,000 slots at each site with as many as 6,000 at some of its operations. Another proposal would lower the slot tax at eight racetrack casinos in South Florida from 35 per cent to 25 per cent and allow them the chance to offer blackjack, capped at $15 per hand if the compact is approved.

That suggestion has been slammed by other gambling operators in the region.

Dan Adkins, Vice President of Mardi Gras Casino, said it was ‘worthless’ and that he wouldn’t be able to put it into operation.
He also said gambling operations had to have a tax rate closer to the 15 per cent rate of the tribe and that they shouldn’t be forced to offer live sports that weren’t profitable such as greyhound racing.

“There is no interest in greyhound racing any more, yet we’re forced under legislation to operate it, so I have an expense that the tribe doesn’t have,” Mr. Adkins said. “We want the elimination, or the option, for live racing so we don’t have to do it if it’s not productive. We want blackjack with a competitive limit, around $100. And we need a tax rate closer to the 15 per cent rate of the tribe. We have to protect our interests and that is what we are doing. There’s a lot of litigation ahead of us.”

Miami venue Magic City’s Vice President Isadore Havenick went further saying it would be the ‘death of the pari-mutuels industry as a whole.’

“It would put us at such a severe disadvantage with the tribe that a lot of us would not be able to compete in the long term,” he said. “We are terrified for the future of our business.”

The Seminoles believe that if approved in the current legislature, the iconic Hardrock guitar symbol could appear on the horizon as a hotel building by 2018 however with the current legislative session finishing on March 11, lawmakers believe it will prove impossible to pass a revised version of the deal by then.

A further obstacle lies in the form of a federal lawsuit lodged in October by the tribe against the state after the part of the previous compact allowing it to offer blackjack expired. That lawsuit, set for trial in July in Tallahassee, would decide whether the Seminoles can continue to operate blackjack tables. The Florida legislature is believed to have been angered by the tribe’s decision to continue offering blackjack in the interim.

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