Florida gambling regulators delay sale of Magic City Casino
Florida gambling regulators on Thursday refused to sign off on the sale of Magic City Casino, one of the state’s oldest pari-mutuels, to the Poarch Creek Indians, bowing to objections that the public needs to know more about the transaction before final action is taken.
But the Florida Gaming Control Commission, which was created in 2021, could authorize the transfer of ownership before the end of the year, as requested by the pari-mutuel’s lawyer, John Lockwood.
The Havenick family has operated the Miami casino since 1931, when gambling was at its heyday in Florida. The casino includes a cardroom and slot machines.
Magic City’s owner --- West Flagler Associates, Ltd. --- is seeking permission to sell for an undisclosed sum the casino’s permit to Wind Creek Miami, LLC, a “wholly owned subsidiary” of PCI Gaming Authority, Inc., which is owned by the Alabama-based Poarch Creeks, according to an application posted on the commission website.
All but two pages of the 103-page application were redacted. Thursday’s meeting agenda also included a four-page memorandum written by commission staff members recommending approval of the license transfer.
But John Sowinski, president of the advocacy group No Casinos Inc., urged the commission to postpone a decision until the public had an opportunity to more closely scrutinize the deal in what will be one of the panel’s first major tests.
The commission was established “to really elevate the public discussion and bring out in the forefront these types of decisions that are made about the gambling industry in our state,” Sowinski said.
“The public should have the ability to see and kick the tires of everything that is not truly, truly a trade secret,” he said, noting that “94 percent” of the application’s contents were shielded from public view.
But Lockwood argued that the deal could fall apart if it isn’t completed before the end of the year.
“This is such a simple and narrow transaction. I had no idea it was going to become such a hotly discussed topic at this commission,” he said.
Lockwood said he has worked closely since August with commission staff members on the application, which regulators would have approved or rejected behind closed doors before creation of the panel.
The redactions were intended to ensure “there’s no inadvertent dissemination of documents” that are off-limits to the public, such as trade secrets, which are exempt from the state’s broad open-records laws, according to Lockwood.
“I’m not taking the position that every single thing that we submitted to this commission is trade secret,” he said, pledging to work with the commission and its staff “to provide a less-redacted document.”
“But again, I would implore the commission to not delay this transaction into next year because I do have fears as to what that would involve for this entire deal,” he said.
But commission Chairman John MacIver said he was concerned about complying with the state’s Sunshine Law, while noting there’s likely nothing that would be “legitimately objectionable” in the application.
“If there is an over-redaction of material that the public has not had an opportunity to consider prior to us taking action, I think it would be inappropriate for us to take action at this time,” MacIver said.
The chairman told Lockwood the commission could meet again this month to consider the issue.
PCI is the parent company of two businesses that already have permits to operate pari-mutuel facilities in Pensacola and Gretna, a Gadsden County community west of Tallahassee.
The proposed license transfer is limited to gambling operations at Magic City, which for decades offered greyhound racing. A 2018 constitutional amendment ended greyhound racing in the state. The Havenicks’ other gambling operations --- a summer jai-alai and cardroom permit in Miami and a cardroom in Bonita Springs --- will not be affected.
But the purchase of Magic City would vastly expand Poarch Creek’s footprint in Florida.
Wind Creek Hospitality, which is owned by the Poarch Creeks, in 2019 purchased a Bethlehem, Pa. casino from Las Vegas Sands for $1.3 billion. Wind Creek also owns gambling facilities in Alabama, Chicago, Nevada, Aruba and Curacao.
Lockwood said the delay, which affects hundreds of employees, could kill the deal.
“As everyone’s aware, the global economic markets are volatile, to say the least,” he said. “If we have this issue beyond this commission meeting and in the next calendar year, I don’t know what that means for this transaction. Quite frankly, we thought we had everything, and we’ve been preparing and we’re ready to close.”
But Marc Dunbar, an attorney with the Dean Mead law firm who represents the Seminole Tribe of Florida, encouraged the commission to proceed with caution. The transfer of a slot-machines license is more complicated than some other gaming-related permit transfers, Dunbar said, and the commission’s process for handling the Magic City sale could set a precedent for future changes in ownership of pari-mutuels.
“It’s not about necessarily having a bunch of people looking over the staff, it’s just so that the public knows what the vetting went through and so people that are coming in next know what the process is and what the statutes mean,” Dunbar said.
Lockwood, however, said third parties don’t have the legal authority to intervene or object to changes of ownership.
“This gamesmanship with these issues of trying to come in and delay action, I believe could cause serious ramifications and set a very bad precedent for how this commission was originally intended to (be) set up,” he said.
MacIver said the suggestion about gamesmanship “was not lost on me.”
“We don’t want to get back into the, shall we say, environment where all of the stakeholders in this industry are at each other’s throats, again,” he said.