State cashing in on Seminole gambling money
With the expiration of a gambling deal with the Seminole Indians on the horizon, the tribe for the first time has raked in so much money that it sent an extra $4.3 million to the state.
The 2010 deal, known as a compact, guarantees the tribe will make minimum annual payments, totaling $1 billion over five years, to the state. Revenue was high enough during the fiscal year that ended June 30 to trigger the additional payments.
But the annual payments will be cut nearly in half when the compact sunsets in less than two years unless lawmakers and the governor reauthorize it, according to projections by state economists who met this week.
The latest revenue estimates come a day before the Senate Gaming Committee holds its first on-the-road meeting in Coconut Creek, part of the Legislature's scrutiny of potential changes to the state's gambling scene ranging from casino resorts to the addition of slot machines at pari-mutuels outside of Broward and Miami-Dade counties.
Under the current deal with the Seminoles, the tribe makes the payments to the state in exchange for having the exclusive right to offer banked table games, such as blackjack, along with a monopoly on all slot locations outside of Broward and Miami-Dade counties. The Seminoles agreed to pay a minimum of $150 million in each of the first two years, $233 million in the third and fourth years and $234 million in 2015.
But as part of a complicated revenue sharing agreement, the tribe has to pay additional money if revenues exceed certain thresholds. The tribe's nearly $1.98 million net win in the year ending on June 30 prompted the additional $4.3 million payment, a portion of which goes to local governments.
Next year, the extra money is expected to more than triple, bringing the Seminole's total payment to nearly $248 million, with another $20 million on top of that in the following year.
The compact requires the Seminoles to pay 12 percent on up to $2 billion in earnings from slot machines and table games, including blackjack.
The payments are part of a revenue sharing agreement because, as a sovereign nation, the Seminoles cannot be forced to pay taxes.
The Seminoles also must pay a higher return to the state as their earnings increase, beginning with 15 percent on net revenue between $2 billion and $3 billion and up to 25 percent of a net win over $4.5 billion.
The Seminoles' net win is expected to exceed $2 billion next year and continue to grow, according to the revenue estimators.
At the same time tribal revenues are growing, slot machine revenue --- about $142.2 million this year --- from the pari-mutuels in Miami-Dade and Broward counties is also projected to climb at a rate of about 2 percent per year once Hialeah Park Casino, which began running slots in August, and Dania Jai Alai are fully operational.