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Betting on Turbulence

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The glistening, glass guitar extends 450 feet into the air, soft neon lighting shimmering into the night. It’s the new hotel for the Seminole Hard Rock Casino & Hotel in Hollywood, an ever-present reminder for anyone nearby that just a short drive away are casino games, entertainment, food and drink. But more than that, it’s a symbol of how gambling has altered the landscape of the state.

ELECTRIC BLUE: The October 2019 star-studded grand opening of The Guitar Hotel, which transformed the skyline at the Seminole Hard Rock Hotel & Casino in Hollywood.

Florida isn’t synonymous with gambling like Las Vegas or Atlantic City, but gaming in the Sunshine State is a billion-dollar industry with power players (such as the Seminole Tribe of Florida, which owns that glistening hotel) engaged in an ever-evolving turf war over what can be offered, where it can be offered and for how much.

Gambling is tightly regulated, so it’s not as easy as someone simply opening a casino wherever they’d like. Florida’s complex gaming laws have come about after decades of push and pull involving state lawmakers, owners of pari-mutuel establishments including jai alai frontons and poker rooms, vocal anti-gambling contingents and the Seminole Tribe. And don’t forget the mobsters, too.

The Seminole Tribe earlier this year entered into an agreement with the state that expanded its gaming operations, including paving the way for sports betting in Florida. It also could provide billions in revenue for the state over the next several decades. It’s been met with much controversy, but then again, that’s pretty much expected when it comes to the evolution of gambling in Florida.

THE EARLY DAYS

Of course, gambling has existed for as long as there’s been a Florida. It just hasn’t always been on the up and up. As far back as the late 1800s, residents and tourists were flocking to play craps and roulette at underground casinos such as the Bacchus Club next door to Henry Flagler’s posh Ponce de Leon hotel in St. Augustine. By the roaring ’20s, gambling had become a hot industry, propped up by mobsters. Bootlegger Big Bill Dwyer’s Palm Island nightclub showcased top-end entertainment, plenty of booze and casino games; local law enforcement turned a blind eye to the operation largely because of thousands of dollars’ worth of kickbacks. Al Capone, who had an island hideaway off Miami, invested in the city’s speakeasies and underground casinos. Meyer Lansky had a stake in a number of so-called “carpet joints,” or swanky casino rooms in Broward County. Over in Tampa, the Cuban numbers game bolita had become so popular and lucrative that a bloody turf war sprang up between rival mob gangs.

In 1931, horse and dog racing was legalized in Florida.

The state legalized horse and dog racing in 1931, and four years later gave approval for jai alai and slot machines as a way to replenish a budget suffering from the Great Depression. Slots became numerous along city streets in Florida and available to everyone—even children. According to the Miami Herald, stories of school kids losing their lunch money to the “one-armed bandits” helped fuel a backlash, and by 1937 the state had banned the machines.

Underground casinos and gambling continued to thrive in post-war Florida, but an investigative piece on organized crime by the Herald caught the eye of anti-crime U.S. Sen. Estes Kefauver, who—despite representing Tennessee—made an example of Florida’s thriving gambling culture on a nationwide scale and forced the resignations of the law enforcement officials who gave it safe haven.

HUMBLE BEGINNING: When it opened in 1979, the bingo hall in Hollywood was the first venture into gambling for the Seminole Tribe of Florida.

The following decades saw the state crack down on illegal gambling while interest groups pushed legalized betting. A 1978 amendment to allow casinos in Broward and Dade counties failed, with opposition coming from Gov. Reubin Askew’s No Casinos group that brought together everyone from church leaders to Walt Disney World.

But just a year later, Florida’s gambling industry would change forever.

HUMBLE BEGINNING: When it opened in 1979, the bingo hall in Hollywood was the first venture into gambling for the Seminole Tribe of Florida.

BINGO!

It wasn’t anything fancy; just a metal building with letters spelling Seminole Bingo on the front. Inside were more than 1,000 people at long tables, staring down at their bingo cards. They had paid $15 for a chance to win a pot as large as $1,000. It was 1979 and just the humble beginning of an empire that would change the fortunes of not only the Seminoles, but tribes across the country.

In 1970, small-stakes bingo was legalized in Florida.

The bingo hall in Hollywood was the first serious venture into gambling for the Seminole Tribe of Florida. The tribe consists of the descendants of the roughly 200 Seminoles who fled deep into the Everglades after surviving violence brought by the U.S. government when they refused forced removal in the 1830s.

As a federally recognized tribe, the Seminoles had tried a variety of ways to generate revenue for their people, ranging from cattle ranching to selling tax-free cigarettes. Bingo was legal at the time in Florida, but the law was intended to allow for church groups and such to raise modest amounts for charity. Pots were limited to $100, for example. The tribe decided it wanted nothing to do with limits.

In 1979, Seminole Tribe opens a high-stakes bingo hall in Hollywood, defying the state’s $100 jackpot; U.S. Supreme Court eventually rules in favor of the tribe.

Broward County Sheriff Bob Butterworth had tried to shut down the bingo hall before it even opened, but a lawsuit brought by the tribe claimed state bingo law couldn’t be enforced on tribal land. A judge allowed the bingo hall to keep operating—and it kept attracting crowds. Jackpots were raised to more than $100,000. New Cadillacs were advertised as big prizes on some nights. In 1981, a U.S. Court of Appeals sided with the tribe in Seminole Tribe of Florida v. Butterworth. They could operate high-stakes bingo despite what Florida law dictated. It would prove to be a pivotal decision that would lead to gaming on Indian reservations nationwide and generate billions in revenue for the tribe. But in those early days, the tribe saw it as just another attempt to raise a little money. Chairman James Billie once told the Seminole Tribune: “(I) didn’t know if we would survive. If we didn’t, we planned to make the building a skating rink.”

In 1984, Offshore gambling cruises, or so-called cruises to nowhere, start to operate.

The building is now the Seminole Classic Casino, triple the size of the original and offering slots and table games and other entertainment in addition to bingo. It’s one of six tribe-owned casinos statewide (including the Seminole Casino Hotel in Immokalee). That glimmering guitar hotel is just a short trip north on U.S. 441. The tribe doesn’t disclose specifics on revenue figures,

but Politico obtained a deposition from a court case in which the casino operations claimed to bring in $2.2 billion in 2015 alone. Nationwide, gaming on tribal lands generated $34.6 billion in fiscal year 2019, according to the National Indian Gaming Commission.

In 1986, voters reject an amendment for casinos in hotels, but approve a state lottery.

After the success of the bingo hall, other tribes nationwide set up similar venues, testing state and federal law in the process. In 1988, the Indian Gaming Regulatory Act was established to provide some sort of framework for gaming on tribal lands. Types of games were divided into classes: Class I games were low-stakes, traditional gaming that were readily allowed; Class II were games like bingo and a lottery which, if they were legal in the surrounding state, could occur without regulation on tribal land; Class III were the most lucrative games typically found at Vegas casinos such as slot machines and blackjack, and could be allowed if the tribe and its surrounding state agreed upon them in a compact. As part of a compact, tribes would often agree to a revenue-sharing provision with the state worth millions or billions of dollars. By the way, casinos on tribal land are exempt from state taxes.

The following years tested the relationship between the tribe and the state, which stalled on entering into a compact. This complicated the tribe’s efforts to expand its gaming offerings, but also saved it from entering into a revenue-sharing deal.

It’s important to note that the Indian Gaming Regulatory Act requires that net revenue from casinos is required to go back into the tribal community. For instance, the money from the Seminole casinos goes toward education and health services, tribal government operations, business development and direct payments to the tribe’s 4,000-plus members. The success of the gambling operations over the last 40 years has helped pull the tribe out of abject poverty, said Jessica Cattelino, author of High Stakes: Florida Seminole Gaming and Sovereignty. “It’s allowed people to live more comfortably and pursue the lives they wanted to lead,” she says. “It’s about the money, but it’s really about control of your destiny.”

In a move that surprised many in the business world, the tribe purchased Hard Rock International and its restaurants, hotels, casinos and extensive memorabilia collection for $965 million in 2006. It meant the tribe had a presence in 44 countries around the world at the time. At a press conference in Times Square, then Vice Chairman Max Osceola Jr. said a now-famous line: “Our ancestors sold Manhattan for trinkets. Today, with the acquisition of the Hard Rock Cafe, we’re going to buy Manhattan back one hamburger at a time.”

THE RISE AND FALL OF THE GREYHOUND

While tribal gaming was flourishing, the pari-mutuels were suffering. The heyday of dog racing and jai alai was long gone. Other gambling options, including a state lottery introduced in 1986, had whittled business away. The fast-paced sport of jai alai had found a big following in the Miami area, in particular—but frontons (the facilities where the game is played) started closing in the ’90s and were not coming back. Only four professional frontons now exist in the United States.

At its peak, settling in at the greyhound track was akin to a day at Disney. The industry cultivated a classy image, as celebrities including Frank Sinatra and Joe DiMaggio were commonplace at the tracks during their trips to Florida. By the late ’70s, 20 tracks operated in the state.

The Naples-Fort Myers Greyhound Track opened in 1957, and the Hecht family, who owned the Flagler Dog Track in Miami, purchased the venue in 1972 and expanded it to accommodate 10,000 visitors. Attendance reached its peak in the late ’80s, then started to slow.

Industrywide, popularity of dog racing started to dwindle in the ’90s, in part through uncovered instances of abused and drugged dogs and a strong backlash from animal rights activists. A report from the Association of Racing Commissioners International shows that bets on dog racing fell from $3.5 billion in 1991 to $500 million in 2014.

Track owners scrambled to find alternative forms of revenue, and successfully lobbied the state to legalize low-stakes poker at pari-mutuel facilities in 1996. “We all started to add poker rooms,” says Isadore Havenick, whose family owns the Naples-Fort Myers facility in Bonita Springs. “We had to plan for the future.”

By the time Florida voters overwhelmingly banned dog racing in 2018, it wasn’t a surprise.

“It was coming to a point where you could tell that it was close to the end or close to a crossroads of some sort,” he says.

The last race was May 3, 2020, an unceremonious end in the midst of a pandemic. Later that year, the family opened the Bonita Springs Poker Room fronting Bonita Springs Road. The new building features 37 poker tables, a room simulcasting horse racing and a Brass Tap restaurant. The family plans to keep the rest of the land, looking at opportunities for other development.

So far, the poker room has been a success, starting to gain traction toward the end of tourist season and the waning days of the pandemic, Havenick said. Many of those coming are the longtime visitors to the track. “Thankfully, our customers have been loyal,” he says.

MAJOR BET: The Seminole Tribe of Florida had a press event Dec. 7, 2006, top left, in New York City when it acquired Hard Rock International. The $965 million purchase included 124 Hard Rock Cafes in 45 countries.

AGREEMENTS AND DISAGREEMENTS

By the 2000s, the Seminole Tribe was still leading the way when it came to gambling in the state. After years of tense exchanges, the tribe and Gov. Charlie Crist came to an agreement on a compact that, among other things, would allow for slot machines in casinos in 2007. But a delegation led by then state Sen. Marco Rubio took offense because it wasn’t run through the Legislature first.

In 1989, penny-ante poker in private homes allowed.

The state Supreme Court sided with the legislators; the governor had to start from scratch. In 2010, a new deal was ratified that allowed for use of slots and banked card games such as blackjack in exchange for revenue sharing.

The deal gave the tribe an opt-out on revenue sharing if pari-mutuel facilities also offered card games, something the tribe claimed did happen. In 2019, the tribe opted out. The state was out at least $350 million per year.

The new compact approved earlier this year gives the tribe the right to build three new casinos and exclusive rights to operate craps and roulette. In exchange, the state receives $2.5 billion in revenue sharing over the first five years, and possibly $6 billion through 2030.

In 2010, Gov. Charlie Crist approves compact with Seminole Tribe after previous deal struck down by state Supreme Court.

The most controversial measure, however, is the arrangement that the tribe gets rights to online sports betting. After a Supreme Court decision in 2018, 31 states have legalized sports betting, many allowing for mobile apps to place bets. “[The tribe] recognized legal sports betting with a mobile component as an opportunity for the tribe to reinstate its revenue sharing with the State of Florida in exchange for additional gaming exclusivity,” spokesman Gary Bitner said via email.

In Florida, players of age would be able to place bets anywhere in the state through the Hard Rock app. It also allows pari-mutuels the ability to partner with the tribe for their own branded app as long as they share 40% of the profits. This could position the tribe to command the emerging online gambling dollar in the state.

The Bureau of Indian Affairs declined to approve or deny the compact during the mandatory 45-day federal review period, essentially allowing it to go into effect. The tribe can start its sports betting operations on Oct. 15. However, litigation is likely.

In 2018, voters approve ban on dog racing and an amendment that requires all expansions of casino gambling be put to voters.

The No Casinos organization says the sports betting measure violates a 2018 amendment passed by voters that required expansions of casino gambling to be approved by voters, and the Havenick family’s businesses filed a lawsuit in federal court asking a judge to block the implementation of sports betting. The tribe and Gov. DeSantis countered that the amendment doesn’t apply in this case because the servers that would track the bets are located on tribal lands.

FUTURE WAGERING: Online sports betting, above, may spark the next phase of gambling in Florida.

The Bonita Springs Poker Room opened last year.

In another complication, online sports betting operators DraftKings and FanDuel announced they were behind a proposed amendment for 2022 that would put to voters whether to allow mobile sports betting in the state. Bitner called it a “political Hail Mary from out-of-state corporations” to undermine the compact and its revenue-sharing structure.

If anything, the recent developments means the turf war over Florida’s gambling dollar is entering a new phase: The debate won’t just be about what can be done in physical locations in the state, but who can establish a gambling empire online, as well.

Photo Credit: Courtesy Seminole Hard Rock Hotel & Casino Hollywood, Courtesy Seminole Tribe of Florida, Florida Memory, Getty, Courtesy Seminole Hard Rock Hotel & Casino Hollywood, Courtesy PBS Contractors, Courtesy Naples-Fort Myers Greyhound track

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