After Sale To Tribe, West Flagler Rents Magic City Casino From … Itself?

Written By Steve Schult on March 28, 2023
West Flagler leases Magic City Casino for jai-alai

West Flagler Associates is selling Magic City Casino in Miami to an Alabama-based Indian tribe.

The ownership group already sold the underlying real estate to the Poarch Band of Creek Indians. But the sale is still pending approval by Florida gaming regulators. The sale of the Florida casino is expected to pass soon.

However, West Flagler intends to continue operating its jai-alai matches and professional league at Magic City’s fronton. As a result, West Flagler will rent the facility from the tribe.

Except they aren’t. At least not technically. In a sense, West Flagler is renting from … West Flagler?

Seminole Tribe objected to third party in the lease structure

During the March 10 Florida Gaming Control Commission meeting, West Flagler’s trio of jai-alai licenses were up for renewal. But the Seminole Tribe objected.

Marc Dunbar, the tribe’s attorney, cited a change in the lease agreement for the complaint.

“Last night, the underlying documents changed,” said Dunbar to the three commissioners at the meeting. “The greyhound permit holder is essentially leasing to a strawman, a non-pari-mutuel permit holder. And the strawman is leasing to a jai-alai fronton. There is no authorization in the statute whatsoever for the pari-mutuel to lease to a non-pari-mutuel.”

Dunbar said the new lease violated Florida statute 550.475.

Previously, the Poarch Band of Creek Indians was supposed to rent directly to West Flagler. The Alabama tribe used its corporate entity, Gretna Racing, to help facilitate the sale of the property. Gretna was supposed to serve as the landlord to West Flagler.

Gretna Racing already has a Florida gaming license. It operates a pari-mutuel facility about 30 miles northwest of Tallahassee.

Instead of leasing directly to West Flagler, Gretna will lease the building to Hecht Investments. Then, Hecht Investments will sublease the building to West Flagler.

West Flagler added third party to avoid possible regulatory problems

The Seminoles claimed the agreement violated Florida law. But West Flagler said the change was made to avoid problems with the commission.

“Yes, we have put in a third party between this to ensure there is no potential violation of the statute there,” said West Flagler’s attorney John Lockwood. “However, I don’t believe the statutes restricts this at all.”

After about an hour of debate, the FGCC approved the deal.

What is Hecht Investments?

According to the Florida Department of State Division of Corporations, Hecht Investments is an active company founded in 1984. The company headquarters is based in Miami.

But the more important detail is who owns it. Alexander Havenick owns the company.

Havenick is a Florida-based attorney and entrepreneur specializing in gambling and cannabis. He was also the former COO of the Casino at Dania Beach, one of the few other Florida pari-mutuels still spreading jai-alai matches.

Additionally, Havenick owns West Flagler Associates. Therefore, one of Havenick’s companies will generate revenue and pay rent to another one of his holdings. And the non-gaming entity will pay the rent forward to the tribe.

In essence, West Flagler is paying rent to West Flagler in a seemingly unnecessary extra step to pay rent to the Poarch Band of Creek Indians.

The lease agreement would be null and void if the FGCC doesn’t approve the sale. In that case, West Flagler would retain ownership of the property.

Photo by Shutterstock
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Steve Schult

As Managing Editor of PlayFL, Steve will stay on top of all things related to the Florida gaming industry. He is also a veteran of the gambling world. The native New Yorker started covering high-stakes tournaments in 2009 for some of poker's most prominent media outlets before adding the broader U.S. gaming market to his beat in 2018.

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