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Judge Holding Cards In Seminole Tribe Gambling Dispute

Seminole Hard Rock building
Seminole Hard Rock Casino

A federal judge appeared convinced Wednesday that Florida gambling regulators' decision to allow controversial card games violated an agreement with the Seminole Tribe that gave tribal casinos exclusive rights to conduct "banked" games such as blackjack.
The controversial "designated-player" games allowed at pari-mutuel facilities were the focus of the trial that closed Wednesday after U.S. District Judge Robert Hinkle grilled Anne-Leigh Gaylord Moe, a private attorney representing the state Department of Business and Professional Regulation.

"The state has permitted banked card games to go on (at pari-mutuel facilities). … It's a stretch for you to convince me that the state did not permit that," Hinkle, who is expected to rule in the coming weeks, told Moe.

The Seminoles and their lawyers accuse gambling regulators of violating a 2010 deal that gave the tribe exclusive rights to operate banked card games, such as blackjack, in exchange for $1 billion in payments to the state. A five-year agreement regarding the cards — part of a larger, 20-year deal called a “compact” — expired last summer, but the Seminoles have continued to offer the games.

The tribe accuses the state of failing to negotiate in "good faith" on a new agreement. The Seminoles' case is centered on two types of games --- designated-player games and slot machines that simulate blackjack --- authorized by state gambling regulators at pari-mutuel facilities.

The tribe's lawyers contend that, by allowing the designated-player games, the state violated the exclusivity provision in the compact. Under the terms of the agreement, the Seminoles are allowed to continue to conduct the games --- without paying the state any money --- if anyone else is permitted to offer banked card games.

But the state wants a federal judge to order the Seminoles to stop operating the banked card games. Its lawyers insist that the designated-player games authorized by the state do not violate the compact, even if the manner in which they are being played at some cardrooms might.

Pari-mutuel cardrooms are allowed to conduct games in which players compete only against each other. The Seminoles allege that designated-player games in which a player acts as the "bank" — paying winners and collecting from losers —  violates the terms of the compact.

In 2014, the department's Division of Pari-mutuel Wagering adopted a rule governing how the designated-player games should be conducted. The designated-player rule appears to be an "end run around the prohibition" against banked card games, Hinkle said.

But Moe insisted that an executive-branch agency could not authorize something that is banned in state law.

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."

Department Secretary Ken Lawson, who was present for Wednesday's closing arguments, would not respond to questions from reporters.