Billion Dollar Easy Cases

written by I. Nelson Rose

#147 © Copyright 2008, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose,

This summer the Supreme Courts of Kansas and Florida decided cases that will change the face of casino gambling in their states and throughout the nation.

The cases were hard fought, since billions of dollars were at stake. The Florida Court ruled that the Governor did not have the power to sign compacts giving the state’s tribes a monopoly on blackjack and other casino banking card games. The other decision was even more crucial, literally life or death – the Court ruled that Kansas could become the first state in the U.S. to own its casinos.

Both cases brought in the most powerful political players. One was titled “Florida House of Representatives v. The Honorable Charles J. Crist, Jr.,” since the suit was brought by one-half of the State Legislature against the Governor. In Florida, it was “State, ex Rel. Stephen N. Six, Attorney General v. Kansas Lottery and Ed Van Petten,” meaning the state of Kansas, through its Attorney General, was suing the State Lottery and its Executive Director.

So, in both Florida and Kansas, the state governments themselves were on both sides of the cases.

Cases like this bring in other parties and lawyers almost beyond numbers. With the Florida House suing the Florida Governor, the Florida Senate joined the fray. The House, Senate and Governor used their General Counsels and hired outside law firms. Since the case would decide whether the Seminole Tribe could keep banking card games and high-stakes poker tables in its casinos, the tribe joined the suit and brought in lawyers from Florida and Washington, D.C. The competition also was represented, Gulfstream Park Racing Association and even the City of Hallandale Beach.

The Kansas case had almost as many parties and lawyers. These included a deputy and an assistant Attorney General; outside law firms; interest groups, such as Stand Up for Kansas, Inc.; and tribes, racetracks and even counties.

Fancy legal terms like quo warranto were thrown around with abandon.

Yet everyone could have saved a lot of time and money if they had simply stopped and asked, “Who is going to win this case?’ Because the cases were easy to decide.

There are, of course, times when even easy cases can be lost through lawyer incompetence. In New York, for example, the state entered into compacts to allow slot machines at tribal casinos. The New York State Constitution clearly prohibits slot machines. But the “anti’s” who brought the suit bizarrely limited their case to the legal question: Does New York allow Class III gaming? The answer is, of course New York has Class III gaming, because it has a state lottery and parimutuel betting on horse races. So the tribes got slots due to poor lawyering.

The outcomes of many cases are difficult to predict. The law is usually fairly clear, but the facts are in dispute. But in the Kansas and Florida cases everyone agreed on the basic facts. And, although the lawyers came up with creative arguments, there was never really any doubt how the Supreme Courts would decide.

The Florida case revolved around the question of whether the governor could sign a compact with the Seminoles allowing Class III blackjack and other banking card games. To answer you need to know only two things: Florida prohibits banking card games, and the State Legislature never approved the compacts nor gave the governor the right to make them.

Almost a dozen other courts had already ruled that when the Indian Gaming Regulatory Act says the state will enter into a compact with its tribes for Class III gaming, that the Governor is not the state. And every court has ruled that it is the State Legislature, not the Governor, who makes the state’s laws.

The Florida Supreme Court expressly found that the Governor did not have the power to overrule the clear public policy of the state.

The Kansas case was equally simple. The difficult question should have been: “How can the State Legislature amend the State Lottery statute to create state-owned casinos?” Someone who did not know Kansas state law would conclude that, of course, the Legislature cannot open casinos by calling them “lotteries.”

But it turns out that question was decided years ago. Due to prior bad case law, in Kansas virtually every form of gambling is a “lottery”.

So that issue was not even brought up. Instead, the only question was whether these state-owned casinos were really going to be owned by the state.

Private operators, like Penn National Gaming and Harrahs, will actually manage the casinos. This is exactly the situation in most of Canada, where the provinces technically own the casinos, but the operators are private companies. (With a few exceptions: e.g., Loto Quebec operates Casino Montreal.) In the U.S. all Indian casinos are owned by the tribes, but dozens are run by private casino companies.

So the legal issue was not that difficult to decide. Because Kansas defines lottery as including casinos, it is legal for the state to bring in private operators to manage the casinos.

Although it was easy to predict how the Supreme Courts would rule, that does not mean we now know the next steps.

Kansas will have the first state-owned casinos. There are no significant legal challenges left and the political opponents have been soundly defeated.

But despite the high Court’s decision, blackjack in Florida is not dead. In fact, as this is written, the Seminoles are still spreading the game.

Although the House won the legal battle, the war is about money. Laws can always be rewritten.

My guess is that a compromise will be reached allowing the parimutuel outlets with slot machines, as well as the Indian casinos, to have banking card games, with a significant share of gaming revenue going to the state. While they’re at it, the Florida Legislature will eliminate the few restrictions left on licensed and tribal high-stakes poker.

But, although these will be laws passed by the Legislature and signed by the Governor, they are not really legal issues. They’re political. This means it is impossible to know what the details of the deal permitting blackjack will be. Or when the deal will be made. Or even if it will be made.

The old saying is that the nation is a government of laws, not of men. Updating that, we can also say that Florida is a government of laws, not of men or women. But men and women, and racetracks, tribes and a lot of other political players decide what actually becomes law.

© Copyright 2008. Professor I Nelson Rose is recognized as one of the world’s leading authorities on gambling law and is a consultant and expert witness for governments and industry. His latest books, Internet Gaming Law and Gaming Law: Cases and Materials, are available through his website,

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