Category Archives: State Policy

Florida Greyhound Ban Amendment Lawsuit filed to Obtain Damages, but does the Lawsuit have Merit?

Casino Watch Focus has reported on the various development of Florida Amendment 13, which bans greyhound racing in the state. Voters overwhelmingly voted in favor of the ban, despite some potential issues with decoupling the gambling from the tracks, an issue known as decoupling. Voters also passed Amendment 3 though, a provision that prevents the legislature from authorizing new forms of gambling without state-wide voter approval. Several tracks have already stopped the live races, but still offer the gambling options they provided prior to the closure. For now, actually expansion of gambling through decoupling hasn’t been addressed, though it seems fairly clear that any expansion of the gambling that was previously allowed, should most certainly require voter approval. Regardless, the Amendment didn’t actually prevent all the gambling at the tracks that many who supported the proposal had hopped or assumed, as the decoupling issue was complicated and most simply wanted to see the live races stop. There is still a lot of gambling and a lot of money being made at various tracks. However, at least one track believes that Amendment 13 took away the value of their facility, and thus they are entitled to compensation. Recently, it was announced that a lawsuit could be filed in an effort to overturn Amendment 13. A lawsuit has now been filed, but this one only seeking compensation. The Orlando Sentinel reports: 

Christopher D’Arcy, owner of D’Arcy Kennel LLC in St. Petersburg, wants a judge to order the state to pay damages for the loss of value of his property, including racing dogs that the lawsuit said could previously be sold for up to $50,000.

Voters in November approved a constitutional amendment, known as Amendment 13, that will shut down Florida’s decades-old greyhound racing industry by a Dec. 31, 2020, deadline.

The lawsuit was announced Monday by the Florida Greyhound Association, an industry group that fought the constitutional amendment, which came after years of calls by animal-rights groups to ban dog racing in the state. The measure easily passed, with support of 69 percent of the voters.

The Florida Greyhound Association went to court last year in an unsuccessful attempt to keep the constitutional amendment off the ballot. The new lawsuit does not try to overturn the amendment but seeks damages under the Florida Constitution and the U.S. Constitution. It makes a claim for what is known as “inverse condemnation” and contends that the amendment was a “taking” of property without compensation.

The main question is whether or not this claim has merit. Clearly these tracks can still offer gambling, which in and of itself provides value to the owners. The Orlando Sentinel continues:

Christine Dorchak, president and general counsel of GREY2K USA, disputed the arguments raised in the D’Arcy lawsuit and said the kennel owner is not owed compensation. “No property is taken under Amendment 13, and this humane law simply phases out an industry that is cruel and inhumane,” Dorchak said in a emailed statement. “Unlike the pig farmer who could no longer use his gestation crates at all, the track land and the dogs themselves retain value.” While greyhound tracks face a Dec. 31, 2020, deadline for ending racing, they were able to stop racing at the beginning of this year. In the past, tracks had been required to run races to offer more-lucrative types of gambling, such as card rooms.

However, the issue of whether or not property has actually lost value can be addressed outside of the decoupling purview, and there are those that don’t think the case has any legitimate legs to stand on given the gambling nature of dog racing in general. Florida Politics online reports: 

One of the lead backers of last year’s successful state constitutional amendment to ban greyhound racing has told legislative leaders that a lawsuit against the measure is “dubious” and “frivolous.”

Carey Theil, executive director of GREY2K USA Worldwide, which aims to permanently end dog racing, sent a letter Monday to state Rep. *David Santiago*, chair of the House Gaming Control Subcommittee, and state Sen. *Wilton Simpson*, who chairs the Senate Committee on Innovation, Industry and Technology, which oversees gambling issues. “We believe this lawsuit is without merit and will be rejected,” Theil wrote. “As you know, no property is taken under Amendment 13, and (it) simply phases out an activity that voters have found to be cruel and inhumane.”

A similar claim was brought in Massachusetts in 20111, he added, resulting in a ruling against a kennel owner. A judge found that the owner “could have no reasonable investment-backed expectations in its greyhound kennel business” because “it operates in the highly-regulated gaming industry.” “Rather than to obstruct adoption efforts and file frivolous lawsuits, the industry would be better served working to ensure there is a successful transition for every track worker and every greyhound,” Theil told the lawmakers.

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Missouri Prosecutors Advance Lawsuit to Shutdown Illegal Gambling Machines Popping Up Across the State

Casino Watch Focus has reported on a recent gambling expansion proposal in Missouri that would legalize slot machines outside of casinos. Currently, legalized gambling in Missouri is limited to a set number of licensed and regulated casinos that exist along the Missouri and Mississippi rivers. The proposal would be an unprecedented expansion in gambling, as it would allow slot machines virtually anywhere in the state. However, the state is currently seeing similar expansion due to illegal gambling machines that operate exactly as these proposed slot machines would. These machines are popping up all over Missouri and the manufacture claims they are not slot machines because the reveal the result of the next spin to the player. These machines act exactly like the pre-reveal machines Florida had to deal with recently and the courts quickly called them out as illegal slot machines. It’s very clear that even though the initial spin shown is your outcome, it’s the spin after that the gambler is paying to see. Players are simply paying in advance and the subsequent outcomes are all a matter of chance. It is a slot machine through and through and a Platte County prosecutor is cracking down on these machines through a new lawsuit that seeks to get clarification by the court. An online source explains:

They look like slot machines, but they aren’t inside a casino.

Video gambling machines have been popping up across Missouri, including in St. Joseph, which has led one prosecutor to file criminal charges to stop their spread. Integrity Vending LLC, based in Kansas, currently faces one felony county of promoting gambling in Platte County.

“In Missouri, games of chance are illegal,” Eric Zahnd, the Platte County Prosecuting Attorney said. “These machines, according to the manufacturer, reveal whether or not you’ll win the next round of the game so they allege that it’s not a game of chance.”

“However to continue to play you have to play through those losing rounds,” Zahnd said.

The legal question that a judge must resolve is whether or not the machines constitute a game of chance, like a slot machine or video poker game. According to Zahnd, the company who distributed the machines, Integrity Vending LLC, has agreed to remove the machines if they’re determined to be illegal. 

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UPDATE: Seminole Tribe Ends Payments to Florida After Failed Compact Negotiations: Special Legislative Session Talks Begin

Casino Watch Focus has reported on the recent news that the Florida legislative session would end with no gambling deal in place. The failure to renegotiate a deal has been an ongoing issue. At the core of the problem is that the Seminoles have exclusive rights to table games and certain gambling. Florida has not been enforcing this exclusivity and the courts sided with the Seminoles. However, the Seminoles have been acting in good faith, providing the state with the estimated $300 – $350 million annual payments the original agreement set up for such exclusivity. But now that the legislature has once again failed to stop others from offering designated card games, which is expanding gambling in the state, the Seminole tribe has decided to now stop providing the good faith payments. The Sun Sentinel reports:  

The tribe had warned it would halt the payments, which totaled nearly $330 million last year, because of controversial designated-player card games offered by many of the state’s pari-mutuel cardrooms. The Seminoles — and a federal judge — say the games violate part of a 20-year gambling deal by the tribe and the state in 2010. That deal, in part, gave the tribe exclusive rights to “banked” card games. 

The Seminole Tribe of Florida made good on threats Tuesday by telling Gov. Ron DeSantis it is quitting a long-standing revenue-sharing agreement with the state after negotiations on a new gambling deal went nowhere this spring. 

In a July 2017 settlement between the Seminoles and former Gov. Rick Scott, the state agreed to drop its appeal of Hinkle’s decision and to take “aggressive enforcement action” against pari-mutuels operating banked card games that violate state law. In exchange, the Seminoles agreed to continue making payments to the state until the end of this month. “Unfortunately, there has not been aggressive enforcement against those games, which have expanded since Judge Hinkle’s decision,” Osceola wrote.

Florida lawmakers considered this possible outcome, and mad adjustments the budget, but some believe the financial contribution, and the gambling restriction that comes from Seminole exclusivity, too import to not make an attempt to resolve the issue.   An online source explains:

State Representative Evan Jenne called for negotiations with the Seminole Tribe of Florida to reinstate the annual payments of an estimated $350 million suspended by the tribe after a failure to reach an agreement about the future of gambling in the state. “That’s just too much money to be left out there unaccounted for in our budget,” said the legislator.

Jenne, a Democrat who represents 99th District which include most of Hollywood and Southern Broward, said the suspension of payments from the tribe could have been avoided. “It was something that was a long time coming, it’s been talked about for quite some time it’s been nearly a decade since the compact would, should have been signed,” he said.

“They had a promised of exclusivity when it came to games like that and the state has not done their part in holding up that part of the bargain,” said Jenne.

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Florida Gambling Deal Fails to Pass this Legislative Session

Casino Watch Focus has reported on the ongoing gambling negotiations between the Seminole tribe and Florida legislators. Many factors were at play, including a sports betting discussion that looked to circumvent a recent Florida Amendment requiring any new gambling legislation to be passed by a majority of the people. That plan, as well as other gambling issues that were being discussed, has ran out of time this legislative session. In the wake of the news, the only outstanding question is whether or not a special legislative session will be called to deal with any gambling related issues. As of now, it appears the intent is to wait until next year. The Tampa Bay Times reports:

With just days left in the annual legislative session, House Speaker José Oliva on Monday put to rest the possibility of passing a gambling deal. Oliva, R-Miami Lakes, also said he would prefer not to hold a special legislative session to try to pass a gambling bill, likely pushing the issue back to next year. “I think we simply ran out of time this year,” Oliva said.

The 2019 session is scheduled to end Friday. Powerful Sen. Wilton Simpson, R-Trilby, and representatives of the Seminole Tribe of Florida have negotiated for weeks on a deal that included the possibility of sports betting at the Seminoles’ casinos as well as at Florida racetracks and jai alai frontons, with the tribe acting as a “hub.” Allowing in-play sports betting, known as “proposition” or “prop” bets, at professional sports arenas also was part of the talks.

Gov. Ron DeSantis received an outline of a deal and met with numerous gambling-industry officials Friday. But revamping gambling laws is highly complicated as it involves numerous interests, including the Seminole Tribe and pari-mutuel operators. 

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Sports Betting and Other Major Provisions in the Florida Gambling Compact with the Seminole Tribe Could Prevent Deal

Casino Watch Focus has reported on the ongoing efforts to renegotiated the expired portion of the Seminole Gambling Compact. Several attempts have been made over the past few legislative sessions, but nothing has been established and they have been acting in good faith since.  As this year’s session approaches its end, the efforts to finalize a new compact have strengthened. As previously explainedit was suggested that sports gambling could be legalized in Florida without needing to involve a vote of the people. Tribal gambling is not regulated in the same way, so if they were to offer it, its believed that it could be a way to work around the need for voter approval. Florida Politics online explains:

Simpson acknowledged last week that the concept of allowing the tribe to run sports books at the state’s dog and horse tracks and jai alai frontons was intended to sidestep a constitutional amendment that passed in November requiring statewide votes on citizens’ initiatives that would expand casino-type gambling.

But [Florida Gov. Ron] DeSantis, a graduate of Harvard Law School, indicated the constitutional amendment adds another layer of analysis to an already-complicated legal deal that also encompasses serious policy-making decisions.

“Obviously, me and my staff we’re going through it, looking substantively (at) what it means, but also legally. As you know, there’s a lot of legalities that are involved in this. There is just a (constitutional) amendment that passed. You know, the question, does it apply to the tribe? Does it apply to this or that? So there’s a whole host of things I think that need to be vetted through, but prior to yesterday I had not seen the outline. We have it now and are going through it,” DeSantis said.

This sports betting provision in general, however, is being set up in a way that Florida Gov Ron DeSantis believes could cause problems. Florida Politics continues:

With time already an enemy, Gov. Ron DeSantis injected more uncertainty Tuesday into a gambling deal reached by a Senate Republican leader and a representative of the Seminole Tribe, suggesting its passage would be too heavy a “legislative lift.”

The governor said he and his staff have begun scrutinizing “a draft outline” of the agreement, which would open the door for sports betting in Florida, with the tribe acting as a “hub” for sports betting at the state’s pari-mutuels.

But the Republican governor appeared skeptical of some sports-betting provisions in the deal, which reportedly also would permit in-play betting at professional sports arenas.

The manner in which sports betting is set up “could really affect the integrity of the games,” said DeSantis, who, as an undergraduate played baseball for Yale University.

“If I can place a wager on whether the first pitch of a game is going to be a strike or not, well, hell, that’s a big moral hazard, because that’s not necessarily something that would affect the total outcome,” he added.

Clearly sports betting has its own set of issues, but that’s not the only sticking point for a successful compact. Designated player games also need addressed given the temporary agreement expires after May of this year. The Tampa Bay Times explains: 

But some issues opposed by pari-mutuels could imperil the deal’s success in the House, several lobbyists said.

Controversial “designated player” games offered at many of the state’s pari-mutuel cardrooms are a key element of the deal. The Seminoles — and a federal judge — have maintained that the card games violate a 2010 gambling agreement with the state that gave the tribe “exclusivity” over offering banked card games, such as blackjack.

Amid the dispute about designated player games, former Gov. Rick Scott entered an agreement with the tribe in which the Seminoles have continued to pay about $350 million a year to the state, which pledged to “aggressively enforce” how the games are played. But that agreement expires on May 31, and the House and Senate have not included the revenue in next year’s budget.

The deal under discussion would severely alter the way the card games are being played, making them virtually unprofitable for pari-mutuel cardrooms, sources said.

House Speaker José Oliva told The News Service of Florida on Tuesday afternoon that he had seen a “brief outline” of the gambling proposal.

The issues don’t stop there either. There are discussions to decouple horse racing in the same way dog racing was decoupled by the voters last election as well as other intertwined gambling issues. At the end of the day, Gov. DeSantis thinks it could simply be too many issues with too many parties to come to an agreement in time. The Tamp Bay Times continues:

To appease the pari-mutuels about the changes to the designed player games, the proposed agreement would also allow horse tracks to do away with horse races, while keeping lucrative activities like cardrooms and slot machines, which are legal at tracks in Broward and Miami-Dade counties. It is unclear whether such “decoupling” would also apply to jai alai frontons. Dog tracks are already allowed to drop greyhound races, thanks to a voter-approved constitutional amendment passed in November.

The pari-mutuels would also be able to operate sports books, with a cut going to the tribe, but the profits from sports betting wouldn’t offset the losses from the changes in the designated player games, according to industry experts.

Under the agreement, the Seminoles would be able to add craps and roulette to other gambling activities currently underway at the tribe’s casinos. The tribe would agree to pay about $400 million a year to the state, an amount that could gradually increase to about $500 million a year. That’s a boost from the current revenue-sharing agreement with the tribe, but far less than what legislative leaders had originally envisioned.

The decisions by the House and Senate to not include the tribe’s annual payments in their budget proposals takes some pressure off negotiators as lawmakers work to hammer out a final budget in the coming days.

Senate President Bill Galvano on Tuesday afternoon told the News Service that Simpson was continuing to work on the gambling deal, which the president said was still in play.

But with just a week-and-a-half left before the legislative session is slated to end, DeSantis hinted that passage of a compact would be extremely difficult. 

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Missouri’s Largest Gambling Expansion Proposal Since Casino Legalization Emerges in the House

Casino Watch Focus has reported on the various gambling proposals and changes in the Missouri gambling landscape, but this proposal might be the most shocking. The Missouri constitution was amended to allow gambling on riverboats by the voters back in 1994 and since that time, the qualifications for river boat gambling has drastically expanded. Its started as actual river boats that traveled up and down the rivers for a two hour period, but now no time or monetary limits exist and gamblers walk into full scale buildings up to 25 feet off the river bank (albeit with a tiny amount of river water with a tiny amount of river water pumped underneath them as to technically make them water craft). Even still, gambling has always been limited to the Missouri and Mississippi rivers. Now a bill has been proposed in the Missouri house that is so radical, it’s not an exaggeration to call it the largest and most problematic expansion of gambling the state has ever seen. An online source explains:

“This irresponsible bill would permit slot machines on every street corner where a restaurant, bar, convenience store or truck stop is located,” said Mike Winter, executive director of the Missouri Gaming Association. “These machines look and play just like slot machines. If this bill passes, we can expect to see them in every city, town or community across the state. Missouri could very quickly have more slot machines outside of casinos than inside them.”

“This is not what Missouri voters envisioned when they voted to approve casino wagering in Missouri,” Winter said. “Voters were very careful to restrict casinos to certain locations and to limit the number of casinos.”

The bill would bypass a vote by Missouri residents, who first authorized casinos by ballot initiative in 1994 and also voted to limit the number of casinos to 13 in 2008.

Not only does the bill drastically expand gambling, it seemingly bypassing regulation by the Missouri gambling commission and it leaves vulnerable those people and families who could be most impact by gambling addiction. The source continues:

If passed, the proposed gambling expansion is expected to heavily impact rural areas throughout the state. The same towns and cities that opposed casinos in their communities could suddenly see hundreds of slot machines in family restaurants, convenience stores and other retail establishments.

HB 423 would prohibit anyone under the age of 21 from playing lottery slot machines but oversight would be minimal as compared to the strict rules that regulate casinos. Busy retailers with machines on their premises would be solely responsible for monitoring their use.

“The proposed regulations, security and oversight are simply inadequate,” Winter said. “This gambling expansion would bypass not only our state’s voters but also our strong gaming commission, which establishes and enforces strict gambling regulations in our casinos.”

Missouri casinos and the Missouri Gaming Association provide a full range of programs to promote responsible gaming and to help those who have a gambling problem. Retailers hosting lottery slot machines would not be required to provide similar responsible gaming education.

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Florida Votes to End Dog Racing – What Comes Next?

Casino Watch Focus has reported on the complicated decoupling issue masked as a simple greyhound ban that later officially became known as Amendment 13The amendment needed 60% voter approval to pass and it received 69%. At face, the Amendment will end live dog racing at the end of 2020, but many questions remain. The Amendment also decoupled the gambling requirements at those facilities from the actual live racing.   This means the facilities aren’t shut down completely, but they can offer simulcast races and slot machines and other prior authorized forms of gambling. The Orland Sentinel explains that some tracks will operate as these mini-casino’s, while others will have fewer options:

While all other tracks in Florida also have card rooms to supplement their dog-racing revenue, Sanford Orlando does not, making its future more tentative.

Florida’s 11 active dog tracks will have until Jan. 1, 2021, to phase out their live greyhound racing. They’ll still be able to race horses, if their tracks can accommodate the event, and they’ll still be able to have wagering on simulcast races from other tracks, including from dog tracks in the five remaining states where the practice is still active and legal.

The questions of how much gambling expansion will also need exploring thanks to the passage of Amendment 3, which will now require voter approval for new gambling. This is a bit of a grey area as it may seem clear that a new simulcast track may not be able to be built without voter approval (a key worry with decoupling as it would be far easier to set up a simulcast location and operate as a mini-casino via decoupling), but expanding the gambling at an existing location may be perfectly permitable. The key example is the number of slot machines. The Sun Sentinel explains how existing tracks could simply drastically increase their numbers as the amount allowed is already established: 

Dog track owners in Florida will be allowed to keep operating card rooms. They’ll be able to run slots in the case of dog tracks in Broward and Miami-Dade counties. So, another result could be that track owners will use their space to expand restaurants and nightlife, or even casino floor space. In turn, the combination of anti-gambling expansion Amendment 3 and anti-dog racing Amendment 13 could mean already existing casinos offer more entertainment options for patrons. 

There already is an example of that. The Magic City Casino in Miami had been a dog track until last year, when the state Department of Business andProfessional Regulation gave it permission to convert to ajai-alai fronton.

The decision capped off a six-year legal fight between the casino and state regulators. With the jai-alai court taking up far less room than the track, Magic City Casino has plans to expand by putting the jai-alai court where its entertainment venue, Stage 305, is now and then building a much bigger entertainment venue on top of the old dog track.

The Big Easy Casino, a Hallandale Beach dog track, would have to stop racing within three years. What might be in store? An option for the Big Easy could be to expand lucrative slot machines. According to its own website, the casino currently offers “more than 500” slot machines. The upper limit for perimutuel casinos under state law is 2,000, though none of them at this point have approached that limit. 

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