Friday, November 17, 2017
Politics

State Supreme Court rejects massive expansion of slot machines

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TALLAHASSEE — In a major defeat for counties that wanted to authorize slot machines by referendum, the Florida Supreme Court on Thursday unanimously ruled that Florida counties have no legal authority to ask voters to approve slot machines at existing pari-mutuel race tracks or jai-alai frontons without constitutional or legislative approval.

In a case brought by the owners of Gretna Racing in rural Gadsden County, the court upheld the decision by the Florida Division of Parimutuel Wagering to deny a slots license, arguing that state law does not authorize counties to conduct referendums to enable slot machines gaming.

"In the absence of such a specific authorization, a county cannot initiate a referendum that will authorize the Division to issue a license any more than the county could itself issue a slot machine gaming license," wrote Justice Charles Canady who authored the ruling.

If the ruling had gone the other way, five of the state's eight most populated counties could have been allowed to have slot machines at horse and dog racing tracks. Only Hillsborough, Pinellas and Orange counties still would have been without them.

The decision was signed by five other justices, including the court's newest justice, Alan C. Lawson, who did not participate in the oral arguments made before the court last June. Justice Peggy Quince recused herself because her daughter works for the gaming division of the Department of Business and Professional Regulation. 

Gretna's lawyers had argued that when the Florida Legislature modified the slots statute to allow Hialeah Park to operate slot machines it opened the door for other counties to seek voter approval to bring the games to their pari-mutuel facilities.

But, Canady argued, that while "slot machine gaming is permitted under tight restrictions as laid out by the Legislature in chapter 551" nothing in the statute "grants any authority to regulate slot machine gaming to any county. The only role that counties play regarding slot machine gaming is conducting referenda when authorized by law."

The court's ruling halts the prospect that the state could see the explosive growth of slot machines anytime soon. Eight counties — Brevard, Duval, Gadsden, Lee, Hamilton, Palm Beach, St. Lucie and Washington — had voted to bring casinos to their stressed horse and dog tracks or jai-alai frontons and were hoping on a favorable ruling from the court to allow them to start installing the machines this year.

"The good news is there will not be thousands of slot machines coming to Florida without further action by the legislature," said John Sowinski, President of No Casinos, a non-profit group that opposes expanded gambling in Florida.

The decision also has the potential to revive talks between the governor and Legislature with the Seminole Tribe of Florida over allowing them to operate casino games exclusively in Florida in exchange for annual revenues of as much as $300 million.

"It looks like it is very good for the state of Florida and the Seminole Tribe," said Gary Bitner, a spokesman for the Tribe.

If the court had allowed counties to expand slot machines across the state, it could have invalidated the gaming compact that gives the tribe exclusive operation of slot machines outside of Miami-Dade and Broward counties in exchange for $120 million a year in revenues to the state.

"That could have had far reaching negative impacts to the state," Sen. Bill Galvano, a Bradenton Republican who has been at the core of the Legislature's gambling negotiations for the past seven years.

While the decision stops Gadsden and other counties from moving forward with slot machines immediately, it doesn't mean those counties won't get such an approval from the Legislature later, he said.

"It doesn't mean this issue is gone," Galvano said.

He said the Legislature could still opt to allow those counties to have slot machines, but under terms spelled out by the Legislature after consultation with the Seminole Tribe.

"If we still want to see an expansion of slots, it puts us in the driver's seat," Galvano said

That was a key part of the negotiations between the House and the Senate over a gambling bill that died in the final days of the Legislature's annual session that ended on May 8. The Senate was pushing for legislation authorizing counties that had countywide votes to have slot machines, while the House opposed that provision.

The court heard arguments in June 2016 from owners for Gretna Racing that the rural racetrack should be allowed to install slot machines because it has the approval of county voters.

Much of the case hinged on conflicting legislative intent in existing law. Voters approved the statewide constitutional amendment allowing slot machines in Miami-Dade and Broward in 2003. In 2009, the Legislature modified the law that authorized those slot machines by allowing Hialeah Park Racing, which was not included in the original law, to be eligible for a slots license.

When that bill was passed, Gretna race track was not an operating pari-mutuel facility, but in 2010, the Legislature again changed the law to allow counties to authorize slot machines. Gretna argued that the change applied to all counties, but the state argued that the slots expansion is only allowed if it is first approved by the Legislature or the state Constitution.

Gretna's lawyers challenged that claim, saying the law authorizes a license if a gaming company gets voter approval and runs pari-mutuel races for two years "after the effective date of this section."

The state argued that the case relies on more than grammar and semantics and urged the court to uphold a First District Court of Appeal decision which voted 2-1 to reject Gretna's slots license because the Legislature did not authorize slot machines outside of Miami-Dade and Broward counties. 

Gretna's lawyer, Marc Dunbar, argued that because the court ruled in 2004 that the Legislature had the authority to expand gambling without voter approval, and the attorney general and solicitor general didn't raise the point.

Justice Barbara Pariente asked Dunbar why lawmakers would authorize slot machines at pari-mutuel facilities in Miami-Dade and Broward but not specifically authorize them elsewhere.

"To basically say to 65 other counties you just have to have a referendum and, if you're a home rule [county], you're fine," she said. "This would have been a very, very significant expansion of slot machines … and there is nary a mention in the legislative record of this kind of change."

Dunbar suggested that when the language was first written in 2009, it was a compromise between the House, which opposed expanded gambling, and the Senate, which wanted to allow slot machines in other parts of the state.

"They were trying to meet in the middle," he said. He noted that lawmakers also gave themselves a year to come back and modify the compact with the Seminole Tribe if they authorized gaming outside of Miami-Dade and Broward.

Legislative leaders reached by the Herald/Times, however, offered a divergent view of what lawmakers were thinking when they passed the law. 

Rep. Alan Williams, a Tallahassee Democrat and supporter of Gretna Racing, said he voted for the change to allow counties the opportunity to bring slot machines to their pari-mutuels and "our intent was never to hamstring the counties and tell them what they could not do."

But Sen. Bill Galvano, the Bradenton Republican who has been at the core of the Legislature's gambling negotiations for the past seven years, had held that when lawmakers adopted the change to the state gaming law in 2010, they did not intend to open the door to the expansion of slot machines as Gretna Racing and seven other pari-mutuels around the state are claiming.

"It was not the intent of the Legislature to open the door for counties to hold their own referendums to allow the expansion of slots," he said.

Attempts to clarify the terms of the referendum language have been drafted every year for the past several years but died amid infighting between the competitive factions of the gaming industry.  

In the absence of legal clarification, the law has become another vehicle for gaming owners across the state to use as a method to get access to a lucrative slots license.

After the law was passed, Dunbar and his legal partner, David Romanik, joined with other investors and the Poarch Band of Creek Indians of Alabama to build a racetrack in Gretna, a low-income community north of Interstate 10 in Northwest Florida. If they succeed in getting a slots license, they hope to build the biggest entertainment and gambling complex east of Biloxi, Mississippi.

Contact Mary Ellen Klas at meklas@miamiherald.com. Follow @MaryEllenKlas

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