Jim Allen

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.

 

Sunshine State boosts Moody’s bond rating for Seminoles

Moody’s has upgraded the Seminole Tribe of Florida’s bond ratings, thanks in part to improvements at its two Florida casinos and also to the tribe’s continued payments to the state for banked card games, including blackjack.

Guitar-Marquee-672x372The Seminoles have continued to make the payments even after a federal judge ruled last year that the state had breached a provision in a 2010 agreement that gave the tribe “exclusive” rights to offer the card games. State gambling regulators breached the exclusivity provision in the agreement, called a “compact,” by allowing pari-mutuel operators to conduct controversial “designated player” games, also known as “banked player” games.

U.S. District Judge Robert Hinkle ruled last fall that the tribe is entitled to continue running the games for the remainder of the 20-year compact. The provision allowing the banked card games expired in 2015, but the compact included language permitting the tribe to continue to operate the games if the Seminoles lost exclusivity.

Last week, Moody’s Investor Services upgraded the tribe’s existing term debt and bonds to Baa2 from Baa3, and its Special Obligation Bonds to Baa3 from Ba1.

The upgrade was based in part on the Seminoles’ investments in the tribe’s two biggest casinos — both in Florida — and its continued payments to the state, according to a press release issued by Moody’s Thursday.

“The one-notch upgrade of the Tribe’s ratings reflect Moody’s expectation of continued exceptionally strong credit metrics along with further and substantial investment in the Tribe’s two largest casinos that will help the Tribe maintain its dominant market position over the long-term,” Keith Foley, a Senior Vice President at Moody’s, said in a press release Thursday. “Even with the significant planned capital investment, the Tribe will be able to maintain very low leverage, at less than 2.0 times,” added Foley.

The tribe’s two “largest casinos” are the Seminole Hard Rock Hotel & Casino Hollywood, in Broward County, and the Seminole Hard Rock Hotel & Casino Tampa, on the other side of the state.

The revamped bond rating also takes into consideration the tribe’s continued payments to the state — in excess of $150 million — for the card games, according to the press release.

“The upgrade also considers Moody’s favorable view of the Tribe’s decision to continue to make revenue payments to the State of Florida despite a ruling in the Tribe’s favor that entitles the Tribe under the existing compact, which expires in 2030, to withhold revenue share payments. The ruling is related to the State’s decision to allow others (other than another Indian tribe) to conduct banked card games. As a result of that lack of exclusivity, the Tribe is entitled under the existing compact to conduct banked card games at all of its 7 casinos through 2030 without having to share revenue with the State. Despite the ruling, the Tribe continues to make revenue payments to the State and has not offered banked card games beyond the original 5 facilities allowed by the compact,” the June 15 release reads.

The tribe was unable to strike a new deal with lawmakers and Gov. Rick Scott during the regular session that ended in May. Scott and tribal leaders inked an agreement late in 2015, but the Legislature failed to give it the requisite approval.

Fitch Ratings also affirmed the Seminoles BBB rating last week.

The Seminoles’ “gaming division continues to experience steady, positive operating trends compared to more flat growth seen in other U.S. gaming markets,” Fitch noted in Thursday’s statement.

The Tribe and Seminole Gaming hailed the financial market news.

“The ratings upgrades, affirmations and strong new ratings are great news for the Seminole Tribe of Florida as we look toward a solid, stable future for the Tribe,” Chairman Marcellus Osceola Jr. said in a statement. “It means our Tribal members, employees, customers, vendor partners and community residents can count on many good years ahead.”

Seminole Gaming CEO Jim Allen said, “These improved and renewed investment-grade ratings will save millions of dollars by helping to keep borrowing costs low. They will help Seminole Gaming to continue as one of the world’s most profitable gaming enterprises.”

Hard Rock to spend $500M on Taj Mahal overhaul

Jim Allen, the gambling guru who’s the CEO of Seminole Gaming and chairman of Hard Rock International, said his company is prepared to plunk down $500 million to renovate Atlantic City’s Taj Mahal, the shuttered casino built by President Donald Trump in 1990.

Hard Rock finalized the purchase of the Taj for a reported $50 million in March, long after Trump was no longer affiliated with it.

Allen is a familiar face in the Capitol. For years, the Atlantic City native has been the key point man in the tribe’s negotiations with Florida officials over a deal known as a “compact.”

According to a CDC Gaming Reports story by Aaron Stanley, Allen recently told a gathering of gambling execs that the Taj — and his Atlantic City hometown — are poised for a turnaround.

The Seminoles pulled the plug on a massive overhaul of the Seminole Hard Rock Hotel & Casino Tampa after the Legislature refused to sign off on a deal inked by tribal leaders and Gov. Rick Scott late in 2015.

Lawmakers again failed to approve a revised compact with the Seminoles during the session that ended earlier this month, leaving unresolved questions about the future of  the tribe’s exclusive rights to offer banked card games, such as blackjack, at most of its casinos. A federal judge sided with the Seminoles in a dispute about the games, but the state has indicated it intends to appeal.