FTHA Lobbyist Message

Florida Thoroughbred Horsemen’s Association
2022 Legislative Session Report from Johnston & Stewart

As the 2022 Session has officially ended, we want to first take the time to thank you for allowing us to represent the Florida Thoroughbred Horsemen’s Association (FTHA). We are honored to be able to continue to advocate for your legislative priorities and be a part of promoting your industry. We are pleased to submit to you the following report on this year’s gaming legislation activity.

Status Update – 2021 Special Session on Gaming

For the last several years, the Legislature, Governor and Seminole Tribe have struggled to find compromise on a gaming deal to renew the state compact. However, this changed when Governor DeSantis announced a new agreement with the Seminole Tribe in April 2021, which then led the Legislature to hold a Special Session to ratify the gaming compact and pass associated legislation in May 2021.

In brief, the 30-year agreement newly allowed the Seminole Tribe to operate sports betting – bets would be placed through a mobile sports app, with servers located on tribal land. Opponents to the agreement felt that it violated the state’s constitutional requirement for any expansion of gaming to be approved via voter referendum because sports bets could be made off tribal land.

By adding sports betting, as well as roulette and craps at the Tribe’s casinos, the agreement was estimated to benefit the state by at least $2.5 billion over the next 5-years and an estimated $6 billion through 2030. Additional legislation passed during the Special Session included creating a gaming commission to regulate pari-mutuels and investigate illegal gambling, as well as the de-coupling of pari-mutuels, apart from thoroughbred racetracks.

The U.S. Interior Department approved the compact in August 2021, however in November 2021 a federal judge invalidated the compact. The judge argued that the compact authorized sports betting off tribe lands, thereby violating the Indian Gaming Regulatory Act. To date, the federal appeals court has not yet weighed in on reversing the decision.

At this time, the 2021 Gaming Compact, in its entirety, remains invalidated including the revenue share payments by the Tribe to the state. This includes the following provisions:

• Authorizing the addition of table games, such as craps and roulette, at Tribe gaming facilities
• Authorizing mobile sports betting conducted by the Tribe
• Authorizing mobile fantasy sports contests conducted by the Tribe
• Allowing the addition of up to three additional slot facilities within the Tribe’s Hollywood Reservation

While the 2021 Gaming Compact has been invalidated, the Legislature passed additional legislation during the Special Session, separate of the Compact, which remains state law.

SB 8A – Gaming

SB 8A makes changes to Florida law for authorized gaming in the state, including live racing and games, slot machine gaming, and the operation of cardrooms.

• Decouples greyhound, jai alai and harness horse permitholders, by removing the requirement to conduct live racing or games.
• Retains racing requirement’s for thoroughbred permitholders, limited thoroughbred permitholders, and limited wagering license permitholders.
• Provides that cardroom licenses may not be issued to any permitholder, other than a limited thoroughbred permitholder, if the permitholder did not hold an operating license for FY2020-21. Further, in order to renew a cardroom license, a thoroughbred permitholders must conduct the minimum number of live racing performances required under current law (known as the “90 percent rule”).
• Removes the prohibition against racing after 7PM for thoroughbred racing.
• Allows card rooms and slot machine gaming areas to be open 24 hours daily
• Deletes the prohibition against serving complimentary or reduced cost alcoholic beverages to persons playing slot machines at a licensed slot machine gaming facility
• Requires slot machine gaming areas to be located at the address specified in the licensed permitholder’s slot machine license issued for FY2020-21

SB 4A – Gaming Enforcement

SB 4A creates the Florida Gaming Control Commission within the Department of Legal Affairs, Office of the Attorney General. It additionally authorizes the Office of Statewide Prosecution in the Department of Legal Affairs to investigate and prosecute any violation of Florida Statutes referred by the Florida Gaming Control Commission that relates to the lottery, gaming compact, amusement facilities, pari-mutuel wagering, slot machines.

• The commission consists of 5 members, one from each appellate district, appointed by the Governor
  • At least one member must have at least 10 years of experience in law enforcement and criminal investigations
  • At least one member must be a CPA licensed in the state with at least 10 years of experience in accounting and auditing
  • At least one member must be an attorney admitted and authorized to practice law in Florida for the preceding 10 years
  • The salary of a members is the same as a commissioner serving on the Public Service Commission (approximately $136,000 annually)
  • The commission must appoint an executive director, located in Leon County, to supervise, direct, coordinate and administer the activities needed to fulfill the commission’s responsibilities
• Creates a Division of Gaming Enforcement within the commission, specified as a criminal justice agency. The commission must appoint a director of the division who is qualified by training and experience in law enforcement or security
• The commission is required to exercise all regulatory and executive powers of the state with respect to gambling, including pari-mutuel wagering, cardrooms, slot machine facilities, oversight of gaming compacts executed by the state pursuant to the Federal Indian Gaming Regulatory Act, and any other forms of gambling authorized by the State Constitution or law, excluding state lottery games as authorized by the State Constitution.
  • Review the rules and regulations promulgated by the Tribe for the operation of sports betting, and propose to the Tribe consumer protection measures to help prohibit underage persons from engaging in sprots betting and assist patrons with information related to compulsive or addictive gambling problems
  • Evaluate information reported concerning abnormal betting activity or patterns, conduct with the potential to corrupt a betting outcome of a sports event, and the use of data deemed
  • Review any matter within the scope of jurisdiction of the Division of Pari-mutuel Wagering, including the regulation of licensees, permitholders or persons regulated by the Division
  • Receive and review reported violations and determine if such violation is appropriate for referral to the Office of Statewide Prosecution
  • Submit written recommendations to enhance the enforcement of gaming laws to the Governor and Legislature
  • Annually report to the Governor and Legislature concerning recent events in the gaming industry including pending litigation or facility license applications, commission actions, state revenues and expenses associated with each form of gaming, performance of each licensee, compliance actions, disciplinary actions, investigations conducted, an any additional information and recommendations
  • Provide an annual legislative budget request

Gaming Activity – 2022 Session

With the compact in flux, the 2022 Legislative Session was relatively quiet in terms of gaming legislation. With 2022 being an election year, the Legislature convened for Session early. The 60-day Session began on January 11 and adjourned sine die, three days later than scheduled, on March 14. Difficulties in budget negotiations necessitated the delay, but the Legislature ultimately passed a record budget totaling over $112 billion for FY2022-23.

The 2022 Legislative Session saw limited policy bills passed, with only 285 bills passing both chambers, as the Legislature and Governor’s office focused on constitutionally required redistricting for both state and congressional seats. The Governor recently vetoed the Legislature’s approved congressional maps, and a Special Session on congressional redistricting is scheduled to begin on April 19.

In terms of gaming legislation, only one bill passed the Legislature:

SB 2510 – Florida Gaming Control Commission

The bill makes the following changes related to the commission and the Pari-Mutuel Wagering (PMW) Trust Fund:

• Deletes a requirement that each member of the commission be appointed from each one of the five appellate court districts considering the Supreme Court’s request to create a new Sixth Appellate District.
• Allows a person who has lobbied for a state agency to be appointed as a commissioner or employed as a commission employee.
• Moves the hearing and notice requirements exemption in ch. 120, F.S., for pari-mutuel stewards, judges, and boards of judges from the Division of Pari-mutuel Wagering (division) to the commission.
• Deletes the PMW Trust Fund from the Department of Business and Professional Regulation and, instead authorizes the commission to administer the PMW Trust Fund.
• Removes language specifying that the PMW Trust Fund is for slot machine regulation, making the PMW Trust Fund available for all the commission’s operations.
• Provides that the daily license fees for pari-mutuel wagering are to be used to fund the operating cost of the commission rather than the division and the proportionate share of the office of the secretary and administration.
• Deletes the transfer of funds from the PMW Trust Fund to the General Revenue Fund.
• Requires the commission to evaluate the license fee for slot machine regulatory requirements and make recommendations to the President and Speaker on the level of slot machine license fees by January 1, 2026.
• Provides that the game promotion statute (s. 849.094, F.S.) does not apply to actions regulated by the Florida Gaming Control Commission.

SB 2510 will be effective July 1, 2022, pending the Governor’s signature.

The PMW Trust Fund is the only source of funding for the commission, and is comprised of pari-mutuel licensure fees, admission fees, breaks tax, and the tax on handle. Absent the passage of SB 2510, and in previous budget years, any revenues deposited into the PMW Trust Fund over $1.5M were required to be transferred to the General Revenue Fund. If SB 2510 is signed into law by the Governor, and pending the Governor’s line-item veto decisions on the budget, the Florida Gaming Control Commission will receive record funding for FY2022-23 of over $9.7M.