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State, Seminoles Press Arguments In Gambling Dispute

Accusing the state of essentially reneging on a 2010 deal, the Seminole Tribe of Florida is asking a federal judge to declare that tribal casinos have permission to keep operating banked card games, including blackjack, for 15 more years.

In a motion for summary judgment filed Friday, the Seminoles also asked U.S. District Judge Robert Hinkle to order the state back to the negotiating table in a last-ditch effort to try to resolve differences over the games.
Gov. Rick Scott and the Florida Department of Business and Professional Regulation, meanwhile, filed a motion Friday asking Hinkle to rule against the tribe on an allegation that the state failed to negotiate in good faith.
The dueling motions for summary judgment come in a dispute over the Seminoles' "exclusive" right to operate banked card games, including blackjack, at five of the tribe's seven casinos. That exclusivity was part of a broader 20-year deal, called a "compact," signed in 2010.
In exchange for the banked card games, the tribe promised to pay the state a minimum of $1 billion over five years, an amount which it has exceeded. But the five-year agreement regarding the cards expired on July 31. The terms of the compact gave the Seminoles a 90-day "grace period" after the agreement expired to continue operating the banked card games.
But after mediation failed, the tribe filed a lawsuit against the state, alleging that Florida officials had failed to negotiate in "good faith" on a new deal.
The Seminoles' lawsuit is centered on two types of games --- controversial "designated-player" card games and blackjack played with electronic cards --- authorized by state gambling regulators at pari-mutuel facilities. The tribe contends those games violate the exclusivity provision of the compact regarding banked card games.
"Despite the promises it made in the compact, within a year of its approval, the state began permitting others to conduct various types of banked card games without explanation or justification," the tribe's attorneys, Barry Richard and Joseph Webster, wrote in Friday's 31-page motion.
Regulators in 2011 first approved the designated-player --- also called "player-banked" --- games, in which the "bank" is another player, instead of the "house." The designated players almost always are employees of third-party companies.
Under Florida law, a "banking game" is defined as one "in which the house is a participant in the game, taking on players, paying winners, and collecting from losers or in which the cardroom establishes a bank against which participants play." Pari-mutuel cardrooms are allowed to conduct games in which players compete only against each other.
"DBPR has acknowledged that the designated player serves as 'essentially the bank for the game,' " the lawyers wrote, quoting the deposition of Department of Business and Professional Regulation Secretary Ken Lawson.
The games have since swept the state, and are involved in an unrelated, pending administrative complaint.
Also in 2011, gambling regulators authorized electronic blackjack games, the Seminoles lawyers' argued. The tribe put the state on notice in 2011 and again the following year that the games violate the Seminoles' exclusivity regarding banked games, the lawyers wrote.
"The use of electronic cards does not change the nature of the game," the Seminoles' lawyers wrote. "The only material difference between the DigiDeal electronic blackjack game and traditional blackjack found in Las Vegas and other casinos is that the cards used are electronic."
The tribe also accused the state of failing to negotiate about the banked card games in "good faith," as required by the federal Indian Gaming Regulatory Act, which governs tribal gambling, Richards and Webster wrote.
"The state refused to participate in any negotiations regarding such games unless they were part of a renegotiation of the entire compact. It also demanded a substantial increase in the state's revenue share as a condition of such an amended compact without specifying any new benefits for the tribe that would justify the increase sought," they wrote.
Amid the legal wrangling, Scott and tribal leader James Billie in December signed a proposed 20-year compact in which the tribe pledged to pay the state $3 billion over seven years in exchange for being able to add craps and roulette to its casino operations. Lawmakers failed to authorize the proposed deal, however, during the legislative session that ended in March.
The burden of negotiating in "good faith" rests not just with the governor, but with the Legislature as well, the tribe's lawyers argued.
If the compact was not satisfactory to the Legislature, it "could have enacted an amended version and submitted it to the tribe" or reached out to the tribe to propose amendments to the plan signed by Scott, the tribe's lawyers wrote.
"It did neither," they wrote.
The Seminoles are asking Hinkle to declare that the tribe is permitted to operate the banked card games for the remainder of the 20-year compact, which expires in 2030, and to force the state to negotiate. Under federal law, if no agreement is reached within 60 days, each side would submit a proposed compact to a mediator, who would choose one of the plans.
In a dueling motion for partial summary judgment Friday, lawyers for Scott and the Department of Business and Professional Regulation focused on the continued existence of the broader compact as they sought to scuttle the tribe's arguments about a lack of good-faith negotiations.
The federal Indian Gaming Regulatory Act bars the tribe from claiming the state failed to negotiate new terms when a compact remains in place, the state's lawyers wrote.
The state's lawyers alleged in the motion that the "tribe's current suit is an improper attempt to make an end-run around the bargained-for expiration of the tribe's authorization to conduct banking or banked card games."
"When the 2010 compact was being negotiated, the CEO of the tribe's gaming operations proposed the five-year limitation on the tribe's authorization to conduct banked card games because the state Legislature was unwilling to approve a 20-year authorization," the motion said. "The tribe persuaded the state to authorize banked card games by proposing to include in the 20-year compact a five-year limitation on the tribe's authorization to conduct banked card games."
The state rejected the Seminoles' argument that the five-year card deal was intended to be renewed for the remainder of the compact if the games were successful.
"While at the tribe's suggestion the 2010 compact provided the state with the opportunity to extend the authorization to conduct banking or banked card games through an affirmative act of the Florida Legislature, it is undisputed that the Florida Legislature has not provided such authorization," lawyers for the state wrote. "Neither the 2010 compact nor the IGRA (Indian Gaming Regulatory Act) provides the tribe with a right to sue the state under these circumstances to secure a different deal than the one it negotiated in 2010. Therefore, the state is entitled judgment as a matter of law on the tribe's claim for violation of IGRA's good-faith negotiation requirement."