Blackjack will continue uninterrupted at casinos run by the Seminole Tribe of Florida, parimutuels will be ordered to stop offering controversial competing card games, and the State of Florida will have access to more than $340 million in new money, under a settlement agreement reached late Wednesday between the tribe and state regulators.
Under the agreement, the Seminole Tribe has agreed to continue monthly revenue sharing payments to the state in return for the state’s agreeing to enforce a judge’s ruling that allows it to continue to operate blackjack and other banked card games at its casinos for another 13 years.
The Florida Department of Business and Professional Regulation must also enforce a rule that prevents competing casinos and card rooms from operating blackjack and slot machines that mimic the banked card games the tribe is entitled to operate exclusively in Florida.
The agreement ends a lawsuit that had been pending in federal court and gives the state access to more than $220 million the tribe paid to Florida but was being held in escrow pending resolution of the lawsuit. Another $120 million will be available in the next fiscal year.
“DBPR is glad that the state of Florida has reached an agreement to resolve the ongoing litigation between the state and the Seminole Tribe,” said DBPR Secretary Jonathan Zachem in a statement. “This agreement ensures the continuity of the current Seminole compact and does not allow for any expansion of gaming.”
The tribe sued the state in federal court in 2015, arguing that when state regulators authorized “player banked card games” at more than two dozen parimutuel facilities and card rooms, it violated its 2010 agreement with the state that gave the tribe the exclusive right to operate “banked” card games, such as blackjack, in exchange for making annual payments to the state.
The state counter-sued, saying that the five-year agreement allowing the tribe the exclusive right to operate card games expired in July 2015 and that the tribe’s continued operation of the games was in violation of the 2010 deal. The state asked U.S. District Judge Robert Hinkle to order the tribe to shut down the games.
But ruling last year, Hinkle sided with the tribe and concluded that state gambling regulators violated the gaming compact when they authorized the “designated player games” in poker rooms. Under state law, a “banked” game allows the house to be a participant in the game by paying winners and collecting from losers. Hinkle concluded that player-banked games operate essentially the same way by allowing a player to act as a bank, thereby violating the state’s compact with the tribe.
He agreed with the tribe that the violation triggered an exception to the five-year limit on blackjack-style games and ordered that the tribe be allowed to continue to conduct the banked games for the remainder of the compact’s 20-year term, which expires in 2030.
The state appealed the ruling and, when legislators ended the annual legislative session without renewing the compact or resolving the dispute, the tribe considered withholding payments to the state until the issue was resolved.
“The settlement is one of the rare incidents where everybody benefits,” said Barry Richard, attorney for the Seminole Tribe. “Nobody gave up anything. The state has an immediate infusion of money, and the tribe gets to continue its games.”
The settlement agreement also contemplates that lawmakers could return next session and formally renew the banked card game provisions that have expired in the compact. It states that the tribe will continue payments through the 2018 legislative session “provided that the State takes aggressive enforcement action” by shutting down the illegal “designated player games.”
“The settlement agreement ensures a stable future for the members and employees of the Seminole Tribe of Florida, and the Tribe appreciates the hard work of Gov. Scott and DBPR to get it done.’’ said Gary Bitner, spokesman for the tribe.