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Why Florida is Dragging its Heels on Online Gambling Regulation

Why Florida is Dragging its Heels on Online Gambling Regulation
Will the sunshine state become an online gambling state?

By    |   Wednesday, 06 May 2020 10:16 AM

Online casino gambling has been a huge conundrum in the USA after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006. There has been pressure to bring about changes to the laws in the country for a while now, however, and in 2018 individual states were given the authority to form their own legislation for sports books to within their jurisdiction. Quite a few states have gone ahead and legalized sports betting; however, gambling is still a grey area in the State of Florida.

Current Status of Gambling in Florida

As of now, sports betting is not officially legal in Florida, though betting on horses is accepted. In November 2018 voters approved legislation that banned greyhound racing through Amendment 13, but it will be effective as of January 1, 2021 only.

The other forms of gambling that are legal in Florida are land-based casino gambling run by representatives of the Seminole Tribe of Florida, the lottery and house-based gambling for charitable causes. The legal age for land-based casino gambling is 21 years, while you are allowed to wager on horse racing, bingo, lotteries and poker if you are above 18 years of age.

Online gambling is a grey area as there are no official laws against it; players are free to play at licensed online casinos as long as they are based outside Florida. There has been a ban on Internet cafes that provide online gambling opportunities as well, owing to the busting of an illegal online gambling ring within the state. The law specifically states that online casinos cannot be operated inside Florida.

Reasons for the Delay in Formulation of Online Gambling Regulation

One of the big reasons why Florida has been dragging its feet when it comes to gambling in general, including online gambling is the passage of new legislation that dealt with the authority and method behind passage and implementation of anything to do with casino gambling expansion. You cannot run an online casino based in Florida, but you can definitely keep on playing at US online casinos who seem to have the ability to continue to offer no deposits bonuses, accept transfers and payout winnings.

In November 2018 voters in Florida approved a constitutional amendment relating to the process for future gambling expansion. As per the amendment, any future expansion in gambling in the state would have to be approved by the voters through a statewide vote. This was a big move as earlier, such a move would require approval from the legislators alone.

However, the power to approve pari-mutuel operators – betting companies that have in the business for years and are family-owned – still remains with the legislators at this point in time. The pari-mutuel piece of the gambling picture has been at the heart of another major issue that legislators have been working on. Before we get to that, let us take a quick look at the Compact in place between the Government and the Seminole Tribe and the issues arising out of it.

The Seminole-Government Compact

In 2010, the government and the Seminole Tribe of Florida came to an agreement, called the Compact, which allowed the Tribe to provide casino gaming and run land-based casinos in return for revenues that they would provide to the government.

The situation was a win-win for both sides: the agreement was to run for 20 years, with the government earning a revenue of $350 million annually from it. While that may seem like a significantly large amount, it has still been a good agreement to come to, considering that the Seminole Tribe earned about $2.5 billion annually through the casinos it operated. This was a good way to replenish its businesses as revenues from sale of tobacco products, were falling steeply at that time.

The revenue being generated was sizeable and the grey area that online gambling was in was not really brought into the equation, especially with the UIGEA already being in place, until recently.

However, there have consistently been issues over time, especially after a 2016 order by Judge Robert Hinkle to allow with the Seminole Tribe claiming that the government was backing out of the agreement by allowing pari-mutuel operators to run ‘designated player’ card games, thereby depriving the Tribe of revenue opportunities while allowing the non-tribal operators to flourish.

The pari-mutuel operators had their own grievances, claiming that they were the ones being deprived of proper revenue opportunities because of the agreement in place between the other 2 parties.

The Final Straw – Setback or Way Forward?

Talks have been going on for a while now between the government and the tribe, and the tribe has continued to pay the $350 million despite the issue not being resolved. But this year things have finally come to a head, after talks that started with much promise now seem to have fallen through.

This year, the talks were initiated by Governor Ron DeSantis and at the table were Marcus Osceola, Chairman of the Seminole Tribe of Florida, Jim Allen, Chairman of Seminole Gaming and Jim Shore, General Counsel for the Seminole Tribe. Also present were representatives from the pari-mutuel community, including the likes of Barbara Havenick, whose family owns pari-mutuel interests in Miami-Dade County.

Senator Wilton Simpson, a Trilby Republican had previously worked out a tentative agreement between the government and the tribe that stated that the tribe would pay out $500 million a year to the government and in return the government would pledge to close out designated card games run by pari-mutuel operators. The agreement reached Gov. DeSantis, who refused to pass it saying that he needed more time to explore options.

The fallout of this was two-fold – the Seminole tribe refused to continue paying the $350 million, and the government decided to move on its own by presenting a budget of $92 billion that didn’t include the revenue from the Seminole Tribe.

While this may initially be seen as a financial setback to the government, the bigger picture dictates that this could actually be a way forward, forcing the government to look at other gambling revenue-generating alternatives like legalization of online casino gambling.

Any movement in that direction will of course take time and there is also the added dimension of the ballot approval; anything that the government proposes would need to be approved by the state’s population through a ballot vote.

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Online casino gambling has been a huge conundrum in the USA after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006.
gambling, florida, casino
Wednesday, 06 May 2020 10:16 AM
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