Florida tribe snubs state, feds by making own slot machines

Jeff Testerman

Monday, Sept. 11, 2000 | 10:57 a.m.

TAMPA, Fla. -- In a federal suit filed against the Seminole Tribe of Florida three years ago, the U.S. Attorney's Office in Tampa claimed the tribe's electronic slot machines were illegal and asked a judge to order them removed. Today, that lawsuit is stalled and the tribe is making more money than ever on the machines.

And now there's a new twist: The Seminoles have cranked up a business manufacturing their own electronic slot machines.

That news took federal prosecutors by surprise.

"Not only are they having their machines in their casinos, but now they're manufacturing them? That sort of redefines chutzpah," said Adelaide G. Few, the assistant U.S. attorney handling the lawsuit. "It seems to me that kind of thing ought to be investigated by the FBI."

The tribe's new business might run afoul of a 1962 federal law regulating the manufacture and transport of gambling machines. The law requires anyone involved in the manufacture of gambling devices to register with the the U.S. Attorney General's Office if the business affects interstate or foreign commerce.

It isn't clear whether the tribe is selling its machines to other clients in Florida or elsewhere. But tribal administrator Timothy Cox said the machines are being produced as part of a joint venture with a company in the Caribbean country of Belize.

The machines "come in disassembled and we assemble them," Cox said.

The tribe provides graphic design and software parameters to Technologies Brazil, the Belize company, Cox said. "We give them that information from our attorneys and they do the rest."

The Gambling Devices Registration Unit at the U.S. Department of Justice has no record of registration by the Seminole Tribe or Technologies Brazil.

"Nothing came up," justice spokeswoman Kara Peterman said last week. "There is no such application on file."

Violation of the act carries a maximum penalty of a $5,000 fine and a two-year prison term. Any devices manufactured or transported in violation of the Johnson Act can be seized and forfeited to the government.

Cox referred other questions about gambling devices to tribal gaming administrator Ron Padgett. Padgett was contacted twice but declined to discuss the matter. Written questions about the manufactured devices were faxed to tribal attorney Jim Shore, but he also declined to respond.

The electronic slot machines are the lifeblood of the Seminole economy.

The tribe also offers low-stakes poker and high-stakes bingo at its casinos in Tampa and four other Florida towns, but the slots account for an estimated 90 percent of all gambling receipts.

Overall, profits from gambling operations provide the cash to finance nearly 95 percent of the $203-million-a-year Seminole budget. Casino revenues also have enabled the tribal council to increase dividends to each of the 2,500-plus tribe members to $2,000 a month beginning in October.

The Seminoles have hundreds of the machines at their largest casinos. The computerized video slot machines feature full-color touch screens, take paper currency in denominations from $1 to $100, and can be played in English, French or Spanish. The popularity of the slots stems from the promise of jackpots of $50,000 or more.

After the failure of referendums in 1978, 1986 and 1994 to legalize Las Vegas-style casino gambling, Florida has rebuffed every Seminole overture for a state compact. The tribe even held out a 55-45 split of gambling profits with the state if it could offer roulette, blackjack and other Las Vegas games. The late Gov. Lawton Chiles and Gov. Jeb Bush both said no.

To settle the impasse, U.S. Interior Secretary Bruce Babbitt in April issued new rules designed to give tribes the opportunity to offer full casino gambling on reservation lands without a state's blessing.

Almost immediately, Florida Attorney General Bob Butterworth filed a federal suit challenging Babbitt's rulemaking authority. Attorneys expect little action on the case until next year, after the presidential election.

The lawsuit focusing on the legality of the video slot machines has been pushed to the back burner until the Babbitt rulemaking squabble is straightened out.