BRADENTON, Fla. - The Seminole Tribe sued the state of Florida just days before expiration of an exclusive agreement allowing the tribe to offer lucrative card games at its casinos.
The tribe said in a 12-page complaint filed in U.S. District Court Monday that mediation over its ability to continue offering banked card games had failed, and that the state breached the terms of its compact.
Florida’s compact authorizing the tribe to operate Class III games such as slot machines and card games does not expire until July 1, 2030.
However, a provision in the agreement giving the Seminoles the exclusive right to offer banked card games such as baccarat, chemin de fer, and blackjack in the state was slated to terminate on July 31.
A 90-day “grace period” ends Thursday, and would have required that the tribe end card games at five of its casinos in the Sunshine state, including Hard Rock Hotels in Tampa and Hollywood.
The Seminoles, in a second allegation, also claimed in its suit that Florida failed to negotiate in good faith to extend the gambling agreement in violation of the Indian Gaming Regulatory Act.
While negotiations with the state are continuing, the suit was filed to protect more than 3,000 jobs “as well as billions of dollars in lost revenues to the state and the tribe over the remaining term of the compact,” the complaint said.
Although the Seminoles asked for the card game provision to be renegotiated, the Legislature did not renew it earlier this year.
The tribe was asked to submit a plan for closing down its games in a July 27 letter from the Florida Department of Business & Professional Regulation.
“As the state compliance agency, it is our responsibility to report to the Legislature on matters regarding the compact and we have already received multiple inquiries regarding the offering of banked card games,” wrote DBPR Secretary Ken Lawson.
Tribe chairman James E. Billie said in a statement that there has been significant progress in negotiating a new compact with the governor and state lawmakers. He did not provide any details.
“The tribe has no option but to file [suit] in order to protect its interests and those of the 3,100 employees and their families whose jobs are in jeopardy,” Billie said. “It is following the procedure set forth in the compact for dispute resolution and is seeking a declaratory opinion from the court with respect to the proper interpretation of the compact and the law.”
The suit said that the tribe has paid Florida more than $1 billion in revenue sharing as part of the exclusive gambling agreement negotiated with the state in 2010.
In a report last week, Moody's Investors Service said that its Baa3 ratings reflected the tribe’s substantial market position in the Florida gambling market.
“Also factored into the investment grade rating is our opinion that compact renewal negotiations, currently in process, will be resolved in a manner that does not impair the financial profile of the Gaming Division,” Moody’s said.
The Seminoles have taxable and tax-exempt debt outstanding.
In 2002, the tribe issued tax-exempt bonds to finance its hotel, convention, and gambling operations in Tampa and Hollywood.
The bonds were refinanced in a taxable, private placement in 2005 after the Seminoles received an adverse determination from the Internal Revenue Service that the 2002 bonds were taxable.
The tribe’s bonds are rated BBB-minus by Fitch Ratings and Standard & Poor's.
