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Florida Lawmaker May Seek to Reverse No Expansion Amendment

FloridaSenator Bill Galvano has hinted he may seek to reverse a no expansion amendment passed last year in order to get a sports betting bill through the legislature.

Last November, Florida´s electorate voted in favor of a constitutional amendment that prohibits the state passing laws to expand casino gambling without voter approval. The motive behind the amendment was to prevent “special interests” influencing government policy which could result in the development of commercial casinos. Supporters of the amendment claimed any expansion of gambling could tarnish the state´s family friendly image.

Despite the passage of the no expansion amendment, Senator Bill Galvano prepared proposals in February to allow in-person sports betting at Florida´s tribal casinos, horse and dog tracks, and off-track pari-mutuel facilities. Galvano claimed that as the amendment only related to casino gambling, sports betting did not require voter approval. Supporters of the amendment disagreed, and argued that sports betting is categorized as Class III gaming under federal law.

A Lot Has Happened in Florida since February

At the time Galvano introduced his sports betting proposals, the Seminole Tribe of Florida was in dispute with the state over house-banked casino games being offered by horse and dog tracks. The Tribe claimed it had exclusivity in Florida to offer house-banked casino games and threatened to stop the payments due under its compact if the state did not step in to stop the games. The state took no action and, in May, the Seminole Tribe withdrew from its revenue sharing agreement.

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The loss of the $350 million per year in revenue had been widely expected by the legislature, and compact payments were omitted from the state budget for 2019/2020. However, rather than seeing the loss of revenue as a negative step, Galvano believes that without the “cloud of exclusivity” hanging over negotiations with the tribe, Florida will be able to extract far more in revenues by expanding gambling at horse and dog tracks, and off-track pari-mutuel facilities.

To Circumnavigate or Reverse the No Expansion Amendment

Galvano has two options available to him. The first is to circumnavigate the constitutional amendment by repealing existing laws that prohibit sports betting in Florida and then restricting who could provide sports betting facilities and where. Strictly speaking the “repeal and restrict approach” would not breach the constitutional amendment, but it would have its opponents and potentially result in long drawn out court cases before any legislation could be enacted.

The second option is for Galvano to put his gambling proposals to the electorate and ask them to repeal the amendment in order to restore the legislature´s ability to expand gambling. This second option would be time-consuming as the proposed reversal of the no expansion amendment would not be voted on until next November; but it is one that has the favor with House speaker Jose Oliva. Oliva told law.com:

If there’s not going to be a workable compact with the tribe, then we do have to figure out in what way are we going to manage gaming in the state, and what are going to be the proceeds of that to the taxpayers of the state. We do have a governor that has fresh eyes and wants to see all of the options, and we have in President Galvano somebody that understands the issue in depth and wants to explore all options. I’m certainly open to it.

The Implications for Regulated Online Poker in Florida

Regulated online poker in Florida has always been regarded as a distant dream because one of the conditions of the Seminole Tribe´s compact with the state is the prohibition of online casinos and online poker. If the compact is dead, the condition no longer applies, and Florida´s legislators could – in theory – include online poker in proposals to regulate sports betting.

Admittedly it´s a long shot, and while the DOJ´s reinterpretation of the Wire Act is still being debated in the courts, it is unlikely the state would consider joining the existing tristate compact. This would limit the appeal of providing a service to online operators; for, although the population of Florida is almost twice the size of that in Pennsylvania, providing online poker as a standalone service (i.e. without an online casino) might not be financially viable for them in a ring-fenced market.

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