Tribe: Compact benefits Florida: Front & Center

As part of a compact it reached five years ago with state leaders, the Seminole Tribe of Florida has enjoyed the exclusive right to offer blackjack and other table games at its casinos. That provision expires July 31. Other gambling proposals could preclude its renewal, including one that would authorize destination resort casinos. In a recent Editorial Board interview, Seminole Gaming CEO James F. Allen made the case for Florida to renew the provision; excerpts follow. You can watch a video of our conversation with Allen and two Seminole Tribe leaders, and read a longer transcript, at OrlandoSentinel.com/opinion.

Q: Why should Florida renew its gambling compact with the Seminole Tribe?

A: The reality is there is a relationship, and it's truly a partnership, between the state of Florida and the Seminole Tribe. We believe, which I think we can demonstrate, that the partnership has been amazingly successful for both the state and the Tribe. …

We have done quarterly meetings with [state regulators] and frankly, we've never had a material issue. … They've actually complimented us countless times on the integrity, the honesty and the sophistication of our operations. … We believe that relationship between the state and the Tribe has been very favorable.

The Tribe has not only met, but exceeded all the revenue projections that we gave to the state. If we were to stay on the current agreement for another 15 years, we would pay the state of Florida based upon our projections … $6.1 billion. …

[Currently] we do not market anywhere out of the state of Florida. We barely market outside Broward County. If we had certainty in this particular partnership with the state of Florida, we would immediately start marketing into Atlanta, into New York City, into Philadelphia … We would market all the way up to Chicago. And we would obviously be then moving more business and more tourism into the state of Florida ...

If we complete these [renewal] negotiations, we're prepared immediately to announce … major hotel expansions [worth $1.6 billion total], both in Tampa and in Hollywood.

Q: Is the Tribe troubled by the fact that compact negotiations with the state haven't begun in earnest?

A: I would say no. ... We would not want to agree with the state on anything until we understood what the state wants. So if they really want to put [in] destination resorts … we, the Tribe, don't have any legal authority or ability to stop that from happening. … If that's what the state wants to do, they should do that. Then obviously, the compact is very specific, all revenue share would cease immediately … We would then compete in a more traditional commercial gaming environment.

Q: You say renewing the compact would help maintain a family-friendly brand in Florida. Isn't Florida already a gambling state?

A: Certainly when you think about the lottery, when you think about pari-mutuels [including horse and dog tracks, and jai-alai frontons], and obviously the Tribes' compact, and then you think about [slot machines in] Miami Dade and Broward ,I don't think anybody could dispute that gaming is here in the state of Florida. I think the question is if you build 10 or 15 destination type casinos, what does that do to the overall image? … I certainly wouldn't want my family and children and nieces and nephews in [that] environment if they were here on holiday … I can tell you it's not good for the family image. Las Vegas tried it, and it was a disaster.

Q: How vital are table games like blackjack to your business model?

A: … We think our relationship with the state of Florida that is most beneficial is to create the three- or four-day visit but with the amenities that are associated with the casino … I think when you take the table games away, [people think] well, it's not quite really a casino. Do I think people would still come to play the slots? No doubt. But I think you can create more energy around the excitement that happens with table games. …

The South American companies … a little over 70 percent of their gaming revenues comes from a game called roulette. We don't have that particular game. But if we look at the number of tourists that are coming to South Florida from South America … if the state of Florida would give us that opportunity, then we would market in South America.…

Q: The proposals in the Legislature currently call only for two destination resorts casinos in South Florida. Could the Tribe live with that?

A: It would be premature for me to state what we could and could not live with at this point. There are going to be so many items. What's the tax rate going to be for the pari-mutuels? Built whereabouts in South Florida? … We would look at that. We would look at the scope that we're offered, obviously look at the term. Then we would evaluate, not one specific item, but all the items to try to understand what's the overall economic model …

Q: How do you feel about just extending the current terms of the compact?

A: It would be premature to negotiate in the media. But what I would tell you is that we believe there is additional opportunity with the scope of gaming that is already clearly defined in the existing compact. For the Tribe to go out and spend $1.6 billion, and create thousands of permanent jobs, and thousands of construction jobs … we think there would be a very positive impact [from extending the compact]. And it would be our hope to continue those conversations. The Tribe has over 90,000 acres of trust land … In theory, it is eligible for gambling. But we've not requested to put gambling all over the state. We've tried to limit it to the existing reservations and specific parts of the reservations where gambling exists today. And we certainly recognize the incredible sensitivity of having that approved when you look at the overall [Legislature].

Q: What do you say to critics who argue for letting the compact expire to reduce gambling in Florida?

A: … Think of this: We gave a billion-dollar guarantee … We have met all the projections and exceeded them. … We would hope that we wouldn't put over 3,000 people out of work. When we actually look at their dependents, the number is 5,122 affected individuals. … The relationship has been beneficial to both the state and the Tribe. … We're hopeful that we can avoid laying all these people off. Obviously, if the state says they no longer want the Tribe's money, we understand that, and I'm very confident that the Tribe would continue to grow and prosper.

Q: So the Tribe would lay off 3,000 people just if it lost the table games?

A: That's correct. That is the actual dealers, the floor people, the pit bosses, the casino administration, the cocktail servers that are associated with that particular department.

Q: A House bill says the state would make $350 million a year from just two destination casinos — a better deal than it's getting under the compact. Do you find that plausible?

A: No, we do not, because I think that only takes into consideration the existing payment that the Tribe made in 2014. … When you look at our $1.6 billion expansion, that math doesn't work. … The bill also suggests a 10 percent reduction in the existing tax [rate] for the pari-mutuels. When you reduce that amount of revenue share with the state of Florida, we believe the math would demonstrate that the state of Florida would actually be going backward.

We would certainly acknowledge that if the state puts two or three destination casinos in South Florida, and two or three in Tampa, and one in Jacksonville, and two or three in the Panhandle, that … in theory, will generate more tax dollars than what we are currently paying with our scope [which is limited] by the existing document. … Hopefully everyone understands the guaranteed money that the Tribe has produced … [The Tribe] has never been in bankruptcy, never had financial problems, and is the only company that enjoys an investment grade rating … [I]f they want to go do business with some of these other companies, then hopefully they would understand most importantly that when they do business with the Seminole Tribe, the money stays in Florida. It doesn't go to Las Vegas, it doesn't go to St. Louis, it doesn't go to New York, it doesn't go to Malaysia, it doesn't go over to Australia or anywhere else. The money stays in Florida … when the tribal council builds a school, or a police department, or the tribal members receive a dividend and they buy a car or they go to a restaurant … We generated $2.2 billion in gaming revenues last year. That doesn't necessarily mean it's profit, but you probably have a pretty good idea of our margins — that's money that's staying in the state of Florida. That's not the case with the other operators …

Q: Any concluding thoughts?

A: We're hopeful that relationship will be able to continue. We certainly recognize that there are those who are looking to expand. …. Certainly the polling throughout the state shows that's not what the citizens of the state of Florida want. Hopefully we can continue to grow in this partnership that's been very beneficial.

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