Florida’s first Lottery chief to DeSantis: Axe the warning!

Tennessee Education Lottery President and CEO Rebecca Paul Hargrove, who was Florida’s first Lottery secretary, is asking Gov. Ron DeSantis to veto a controversial measure that would require Lottery tickets and promotions to carry a warning that the games may be addictive.

The warnings could cause a $61 million hit to education in Florida, and could have a major impact on lottery sales nationally, according to Hargrove, who’s also the president of the World Lottery Association.

The Florida bill (HB 629) would require warnings to take up 10 percent of the space on the front of a ticket. Retailers also have to post warnings wherever the tickets are sold.

House Speaker José Oliva, R-Miami Lakes, pushed the proposal.

“The bottom line is, what’s important for people to know is that (the) Lottery, unlike other types of things that we consider possibly habitual or dangerous, is carried out by the state and does nothing to warn people of its habitual nature,” the speaker told reporters earlier this month.

Hargrove said she’s not aware of any other state that requires a warning to take up 10 percent of the front of the ticket, and warned that the warning message will have a “substantial negative impact” not only on the Florida Lottery but on the industry as a whole.

The warning “interferes” with bar codes on the tickets, cautioned Hargrove, who repeatedly referred to the “good causes” supported by state lotteries in her letter to the governor.

And the warning will have a “substantial negative impact on the aesthetics of the ticket,” the 36-year Lottery veteran warned.

“The play area of the ticket is the core of the appeal of these games to the consumer. Reducing the play area of the ticket will reduce the entertainment and play value of the instant game,” she predicted.

Retailers may not want to sell the instant scratch-off games “due to the negative image this warning message conveys about addiction,” Hargrove added.

The warnings could lead to a $235 million reduction in Lottery sales, which would result in a $61 million hit to education. In addition, retailers would lose about $14.1 million in commissions.

Hargrove also said she’s worried that Florida’s warnings could spread to other states.

“Our industry would not want Florida to set in motion a trend in legislatures that ultimately leads to a reduction in dollars for lottery beneficiaries, including college scholarships, pre-K funding, healthcare funding, programs that support senior citizens and state budgets,” she wrote.

Mass. Gaming Commish report: Wynn Resorts execs covered up sexual allegations against Steve Wynn

Former Wynn Resorts executives knew about allegations of rape and other sexual misconduct against company founder Steve Wynn, but did nothing to address the wrongdoing and, in some cases, actively worked to cover them up, according to a report released by the Massachusetts Gaming Commission Tuesday.

The company is trying to convince gambling regulators that it has undergone a “transformation” since Steve Wynn left the company last year while embroiled in accusations of sexual misconduct.

The investigation by the commission’s Investigations and Enforcement Bureau found “that in some instances particular Company executives, with the assistance of outside counsel, were part of affirmative efforts to conceal allegations against Mr. Wynn that came to their attention.”

The report also details allegations by a Las Vegas Wynn manicurist that she became pregnant after Wynn raped her.

That allegation was passed to Marc Schorr, then the Wynn Las Vegas president and CEO and COO of Wynn Resorts, who informed Steve Wynn. There was no internal investigation and a settlement of $7.5 million between Steve Wynn and the manicurist was “structured for utmost secrecy,” the IEB wrote.

There was also a $975,000 payoff in 2006 to a former Wynn Resorts cocktail server, who told the company’s HR chief that she had “wrongfully engaged in a sexual relationship” with Wynn. Two years later, another cocktail server who had been fired was paid $700,000.

Here’s more from State House News Service’s Colin A. Young:

“The Company does not contest the facts contained in the IEB’s report,” Wynn Resorts said in a statement Tuesday morning. The company added, “Any employee who was aware of allegations of sexual assault against the Company’s founder and did not investigate or report is no longer with the Company.”

The report largely mirrored the findings of a similar inquiry led by gaming regulators in Nevada — which led to a record $20 million fine but an agreement that regulators will not take action against the company’s casino license in that state — though the Massachusetts report contains a greater level of detail.

“The IEB investigation shows that over a course of years, a limited group of executives and employees in positions of authority at the Company, including in the legal divisions, were aware of certain allegations of sexual misconduct against Mr. Wynn involving employees, but they disregarded Company policies when it came to handling those allegations,” the report’s executive summary says. “The investigation also shows that in some instances particular Company executives, with the assistance of outside counsel, were part of affirmative efforts to conceal allegations against Mr. Wynn that came to their attention.”

The IEB report details the allegations made by a Wynn Las Vegas manicurist who reported to her supervisor in 2005 that Steve Wynn had raped her and that she was pregnant by him. That allegation was passed to Marc Schorr, then the Wynn Las Vegas president and CEO and COO of Wynn Resorts, who informed Steve Wynn. There was no internal investigation and a settlement of $7.5 million between Steve Wynn and the manicurist was “structured for utmost secrecy,” the IEB wrote.

There was also a $975,000 settlement to resolve a 2006 allegation from a former Wynn Resorts cocktail server who told the company’s human resources chief that she had “wrongfully engaged in a sexual relationship” with Steve Wynn. There was no internal investigation of that allegation, the IEB said. In 2008, another cocktail server who had been fired sent a demand letter to a Wynn Resorts attorney in which she alleged an “intimate relationship” with Steve Wynn. There was no internal investigation and the parties agreed to a $700,000 settlement, the IEB said.

Steve Wynn has denied allegations of non-consensual relationships but in a statement initially given to a Wynn Resorts special committee investigating the allegations, he said he “had multiple consensual relationships during my tenure at Wynn Resorts and made no attempt to document them.” Steve Wynn did not agree to be interviewed by Gaming Commission investigators either under oath or on a more informal basis, the IEB said.

Matt Maddox, who replaced Steve Wynn as the gambling empire’s CEO last year, told the commission Tuesday that Wynn Resorts is a new company and detailed changes to its executive structure and board of directors, and updates made to company policies.

“Fourteen months ago when the Wall Street Journal article came out, our company was shaken to its core. We were in crisis, and many of us were in denial. … I knew when I took over on February 7, 2018, that we had to be strong, be fast and get to the truth. Only the truth was going to let this company survive and thrive. We had to be transparent, cooperative and progressive,” Maddox said. “We were going transform ourselves from a founder-led company that was about a man into a progressive company that’s about the 25,000 people. We weren’t just going to get to best practices – we were going to lead.”

Soon after the IEB report was released Tuesday morning, Wynn Resorts went live with a new website offering details on changes at the company in the last year.

The company’s board is entirely new and all the executives identified in a Nevada Gaming Board report as having had knowledge of Steve Wynn’s alleged acts have left the company, per Wynn Resorts. Everyone who was responsible for disclosing a settlement involving Steve Wynn and one of his alleged victims to the Mass. Gaming Commission is also gone, and only Maddox, now the company’s CEO, remains from the company’s original list of qualifiers.

Whether the five commissioners think that the steps Wynn Resorts has taken in the wake of the Wall Street Journal article that ignited the commission’s investigation are sufficient for the company to maintain its suitability is an open question.

“Remedial measures are certainly important, but they do not erase the past and as the Nevada Gaming Commission’s recent historic regulatory fine demonstrates, this is a very serious issue of corporate governance which requires careful consideration,” Wells told the commission Tuesday morning.

Wells also told the commissioners they will have to consider that in 2013 when the Gaming Commission deemed Wynn Resorts suitable, three of the people found individually suitable — Steve Wynn, his ex-wife Elaine Wynn who owns significant shares in the company and sat on its board and Wynn Resorts’ then-general counsel Kim Sinatra — were aware of the 2005 settlement but did not disclose it to regulators. Steve and Elaine Wynn were both also aware of the rape allegation behind the settlement but did not disclose it.

“The Commission will have to consider whether the Massachusetts gaming law and regulations mandated disclosure of the 2005 settlement and related sexual assault allegation or any other allegation of sexual misconduct or sexual conduct involving Mr. Wynn and a subordinate employee,” the IEB wrote in its report.

After opening statements from both sides Tuesday, the commission began considering the differences in how Wynn Resorts and its executives handled two complaints of inappropriate behavior at Encore Boston Harbor and the litany of allegations against Steve Wynn. The IEB called as its first witness Denise Murphy, a partner from the law firm Rubin Rudnick who specializes in employment law.

Murphy conducted for the IEB an independent review of the handling of two complaints of inappropriate behavior against an executive at Encore Boston Harbor, Wynn Resorts’ roughly $2.5 billion casino project in Everett. The resort is set to open in June if the commission determines Wynn Resorts is still a suitable operator.

The first Encore Boston Harbor complaint, from January 2017, involved an employee who reported that the executive “massaged her shoulders while he was looking over her while she was making plane reservations for him,” Murphy said. The second complaint, in July 2017, was based on an incident when “the executive and the individual went to Starbucks and got coffee. She tried to pay, the executive tried to override her and put his hand, from behind, over her mouth and put out his own credit card.”

Murphy said Krum and another Encore Boston Harbor official immediately launched investigations upon becoming aware of the complaints and worked to ensure that the employees who made the complaints were fully heard and were kept apprised of the company’s response to the complaints. After the second complaint, which was filed against the same executive by a different employee, Wynn Resorts fired the executive.

“I think the company did everything right, in the context of their limited resources in Boston,” she said when asked for her overall assessment of the handling of the complaints. Murphy added, “The company did, as far as I’m concerned, they did what they’re supposed to do.”

The IEB concluded that Murphy’s review “demonstrates that the two Encore Boston Harbor complaints received drastically different treatment compared to the allegations against the company CEO and Chairman.”

“There is a striking contrast between the manner in which the two Encore Boston Harbor complaints were treated on the one hand, compared to the manner in which the allegations against Mr. Wynn … were treated on the other hand,” the IEB wrote. “Clearly, the Company had policies in place and possessed the understanding and sophistication to appropriately deal with workplace sexual misconduct complaints.”

After about six hours, including an hourlong lunch break, the Gaming Commission recessed its hearing at 3:50 p.m. Tuesday to resume the proceedings at 10 a.m. Wednesday.

Wednesday’s session is expected to begin with a presentation from Wynn Resorts, the company’s first chance to make a detailed and thorough response to the IEB’s findings and the issues raised during the first day of the hearing.

The new members of the company’s board of directors are expected to play a central role in that presentation, testifying as a panel on the changes to the board and management at Wynn Resorts. The company will also call upon an outside expert to “present her expert report and analysis of the Wynn Resorts Ltd. changes at the board level,” according to Jed Nosal, an attorney at Brown Rudnick who is representing Wynn Resorts.

“We look forward to sharing more information tomorrow about the transformation of the company’s governance, policies, training and culture,” the company said in a statement issued at the conclusion of the proceedings Tuesday.


“Manufactured crisis” or special interest shakedown?

Apparently, Truth or Dara isn’t alone in viewing a potential special session with dread.

John Sowinski, the head of No Casinos, asked legislative leaders to ignore what he’s calling “a fictional crisis manufactured by gambling lobbyists who want you to re-convene the legislature so they can try to make one more run at a major expansion of gambling before the November elections, when Florida voters will likely approve Amendment 3.”

Sen. Bill Galvano and Rep. Jose Oliva, Republicans who will take over as the leaders of their chambers later this year, last week resuscitated persistently elusive gambling issues, as they explore a deal with the Seminole Tribe.

They — and House Speaker Richard Corcoran — say the urgency is required because of a potential $400 million hit to the state budget, should the tribe decide to stop making payments to the state.

But Sowinski’s not buying it.

Here’s the full text of the letter he wrote to the leaders today:

Dear Speaker Corcoran and President Negron:

I have recently read press reports that there is discussion of holding a special session on the issue of gambling in the hopes of coming up with a “deal.”  If ever there was an issue that the legislature has already spent too much time, energy, intellectual capacity and political capital, it is gambling.  And whenever this issue comes up in Tallahassee, negotiations between the chambers seem to be more focused on coming up with a “deal” that satisfies competing gambling interests than enacting solutions that are in the best interests of the people of Florida.

Some articles have indicated that the reason convening a special session is being considered is because there are concerns about a potential revenue loss if the Seminole Tribe does not keep making payments to the state for banked card games, now that the state has failed to meet a deadline to provide for strict enforcement related to “designated player games” at pari-mutuel facilities.  The urgency of this matter is curious, since no facts have changed since the end of session that would now make this such an enormous priority that it could merit a call for a special session of the Legislature.

Most observers see this as a fictional crisis manufactured by gambling lobbyists who want you to re-convene the legislature so they can try to make one more run at a major expansion of gambling before the November elections, when Florida voters will likely approve Amendment 3.

But of even greater concern is that many people suggest a political fundraising benefit to holding a special session, given the gambling industry’s sordid reputation for seeking gambling approvals by making huge contributions to campaigns and electioneering committees.  Their views on the matter were summed up by one pari-mutuel owner who recently told a reporter that if the Legislature didn’t pass a gambling bill to benefit his industry, “They’ll never see any of my money ever again,” the owner said. “Why bother?”  I know it is not reflective of your intent, but their attitude seems to be that they are owed something because of their political contributions.

You can tell the gambling interests and assure the people of Florida that public policy is not for sale in Tallahassee by resisting gambling lobbyist pressure for a special session.  Convening a special session that will be seen as a genuflection to the gambling industry would provide voters with a perfect illustration of why Amendment 3 is so badly needed.

The simplest way to ensure continued compact revenues would be for the state to take steps to comply with the consent agreement it entered into with the Seminole Tribe.  At the very least, use your oversight authority and budgetary discretion to ask the Division to present to you a plan for vigorous enforcement.  Ensure that they take whatever steps are available to them and have whatever resources are at their discretion and yours to do the job.  At the very most, fixing this problem would require a one page bill. But only in the world of gambling legislation and the myriad of lobbyists who influence it would such an easy fix come at a price of expanding gambling throughout the state.  Sadly, that is what any proposed “deal” has always included.

I’d also like to add two other points to the discussion.  First, it is not just my opinion, but proven history that revenue promises made by the pari-mutuel industry, and specifically their promises about slot machine revenue, simply can’t be trusted.  In 2004, Florida voters narrowly approved with 50.8% of the vote (before 60% was required for constitutional amendment passage) the amendment approving slot machines at seven existing facilities in Miami-Dade and Broward Counties.  Voters were promised that these machines would generate a half-billion dollars per year in revenue for education.  These revenues have never exceeded $188 million.  Then a few years ago these same pari-mutuels promised that if their tax rate was cut from 50% to 35%, revenue to the state would increase because of the capital improvements they would make, even convincing state revenue estimators.  Last year your revenue estimators put forth a report showing that they were wrong, and these cuts resulted in less revenue to the state.  Now they want their tax rate cut from 35% to 20%.  Banking on pari-mutuels to provide a reliable source of revenue to the state is, pardon the pun, a bad bet.


Finally, I would like to bring to your attention how Amendment 3 would likely impact any expansion of gambling that you might pursue at this time.  When we drafted the amendment, we considered the possibility that some gambling advocates might want to “beat the buzzer” with gambling expansion prior to passage of the amendment.  The last thing we wanted was to have our own amendment trigger an expansion of gambling.  So we wrote the amendment, not to govern “expansion” of gambling, but to set a constitutional standard for whether a form of casino gambling is authorized in the state.  Under Amendment 3, in order for a form of casino gambling to be authorized in the state, it must be approved by Florida voters through statewide voter initiative.


As it turns out, the only existing forms of gambling that would be impacted by Amendment 3 are those that exist through loopholes, including the vexing designated player games and internet cafés.  But if the legislature enacts new forms of casino gambling, such as gifting slot machine licenses to pari-mutuel operators outside of Miami-Dade and Broward Counties without voter approval through constitutional initiative, even before passage of the amendment, Amendment 3 was written to de-authorize any such expansion.  Therefore, any revenue you might seek to add by authorizing additional gambling now is speculative at best.  The analysis done of Amendment 3 by your revenue estimators sitting as the Financial Impact Estimating Conference is consistent with this assessment.


We appreciate your leadership, and the fact that the Legislature has, for the past seven years, resisted continued attempts to expand gambling.  We ask you to resist this last ditch effort by gambling interests to force a major expansion of gambling upon our state.





Scrambling for gambling

As talks between key lawmakers and the Seminoles heat up, the anti-gambling group behind a constitutional amendment going on this fall’s ballot is taking to the air waves to scold the Legislature for trying to beat voters to the punch.

Voters In Charge, the political committee that pushed the “Voter Control of Gambling Amendment,” is running a 30-second TV ad and a 60-second radio ad — in additional to digital and social media advertising — starting today, according to a release issued by the group this morning.

If approved, voters statewide would have to approve any expansion of gambling, something now largely controlled by the Legislature. A recent poll showed 76 percent support for the measure, which will appear as Amendment 3 on the November ballot and was largely bankrolled by a Disney company and the Seminole Tribe of Florida.

Anticipating passage of the proposal, legislators are scurrying to craft a new 20-year agreement with the Seminoles, prompting the attack from Voters in Charge.

“They’re trying desperately to expand gambling now, before voters have their say,” a female voiceover on the TV ad scolds.

Sen. Bill Galvano and House Speaker-designate Jose Oliva met with Seminole Gaming CEO Jim Allen, and the tribe’s lobbyist Will McKinley, yesterday. Galvano told Truth or Dara he expects the Seminoles to give the legislative leaders a draft compact this week.

“The reaction by gambling lobbyists and Tallahassee politicians shows exactly why we need Amendment 3,” Sowinski said in the release announcing the ads.


Louisiana riverboats could set up slots onshore

Florida’s “cruises to nowhere” have been a sore spot for pari-mutuel operators, and the Seminole Tribe, whose gambling efforts are landlocked while the ships are able to offer casino-style gambling once they get a few miles offshore.

In contrast, Louisiana lawmakers may consider doing the opposite — allowing riverboats to set up shop on dry land, to make them more competitive with neighboring casinos in Mississippi and get the cash flowing.

This from the Times-Picayune:

“The chairman of a gaming task force said Thursday (Jan. 25) it would recommend that the Louisiana Legislature allow riverboats to place slot machines on land up to 1,200 feet from the shore to generate more revenue and compete with casinos in Mississippi.”

Read the full story here.

Hunkering down at the Hard Rock during Irma

The rest of the state may have come to a screeching halt as Hurricane Irma wreaked havoc throughout Florida earlier this week.

But the slots didn’t stop spinning at the Seminole Tribe of Florida‘s Hard Rock casinos in Hollywood and Tampa, both areas that were affected by the historic storm.

The hotels at the casinos also provided a haven for storm workers, according to Seminoles spokesman Gary Bitner.

“Both Hard Rocks stayed open during the storm with limited service options and mostly for hotel guests. Both hotels hosted a large number of emergency responders,” Bitner said in an email.

Tribal leaders took out full-page ads  in several Florida newspapers on Thursday to express their appreciation for the 600 employees who worked throughout the storm.

“We salute our Seminole Gaming employee team members, our vendor partners and contractors who worked tirelessly through Hurricane Irma,” the ad reads. “They exemplify the unconquered survivor spirit of the Seminole Tribe of Florida.”


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While Irma packed a powerful punch, the damage at the casinos was mostly limited to landscaping, according to Bitner.

Nevada gambling regulators ponder pot

budWith the advent of recreational marijuana in Nevada, at least one of the state’s gambling regulators wants weed to be included in “responsible gaming” policy.

According to a report by CDC Gaming Report’s Aaron Stanley, Nevada Gaming Control Board member Terry Johnson expressed concern about adding the impacts of marijuana to those of alcohol or problem gambling in the state’s regulations governing responsible gaming.

“We have existing regulations that talk about impairment from alcohol and gambling, but the statutes and regulations are silent on… what happens when the persons might be impaired from marijuana intoxication and continue to gamble,” Johnson, who has served on the NGCB since 2012, said, after explaining that an operator had been recently fined for allowing a patron to continue to gamble while visibly intoxicated from alcohol.

Johnson spoke yesterday at a University of Nevada-Las Vegas event hosted by the American Gaming Association.

Florida, which legalized medical marijuana last year, doesn’t have any gambling regs on the books specifically dealing with pot, either.

Nevada regulators concerns may be heightened by what could be the nation’s first marijuana mega-store opening soon near downtown Las Vegas.

Click here for more on that.