by Jim Freer
Voters in Miami-Dade County, Fla., approved slot machines for Calder Race Course and the county’s two other pari-mutuel facilities in a Jan. 29 referendum. They passed the ballot issue by a 63%-37% margin--a decisive victory in a race many observers expected would be close.
Calder, Flagler Dog Track and Miami Jai-Alai will each be able to install up to 2,000 Class III Las Vegas-style slot machines. State rules and tax rates will be the same as for Gulfstream Park and two other pari-mutuel facilities in adjacent Broward County, where voters approved slots in 2005. Calder will join Broward’s pari-mutuel casinos in paying the state 50% of net slots revenue, with money going to education around the state.
“I want to thank all of the people at Calder, our employees, and horsemen, who have been seeking this for years,” Calder president Ken Dunn said during a victory celebration at Flagler Dog Track in Miami.
Calder and parent Churchill Downs Inc. have not determined the size, start of construction, or other details of a casino they will build at the track in Miami Gardens, Dunn said. “This will benefit our employees, horsemen, and fans, and create more jobs and tax revenues for the county and city,” he said.
Ryan Worst, a securities analyst at Brean Murray, Carret & Co. in New York, estimates Calder’s pre-tax net revenue from slot machines could be between $75 million and $100 million in the casino’s first full year. Harness track Isle Casino at Pompano Park is the only Broward County pari-mutuel facility with slots revenue on a faster pace.
CDI has had a Calder casino in “the planning stages” and now can start determining details, said Kevin Flanery, the company’s vice president for national public affairs. CDI has slot machines at Fair Grounds in New Orleans.
In March 2005, Miami-Dade voters defeated a slots ballot issue by a 52%-48% margin.
Again this year, an anti-gambling coalition aired radio ads asking voters to defeat the slots proposal. They cited concerns about possible increases in crime and gambling addiction. Former Florida Gov. Jeb Bush was featured in ads similar to those of 2005 when, as governor, he campaigned against the Miami-Dade ballot issue.
“This time, I think the voters in Miami-Dade looked at what is happening in Broward and saw that all of the opponents’ concerns are not coming true, and that slot machines are an economic stimulus,” Dunn said.
Broward County’s three pari-mutuel casinos have created more than 2,000 full-time, slots-related jobs, said Scott Savin, Flagler Dog Track’s chief operating officer and a former Gulfstream president. Flagler will construct a casino with 2,000 slots within its grandstand and expects completion in the summer of 2009, Savin said.
Through Jan. 8, political action committee “Yes for a Greater Miami-Dade” raised $5.3 million. Calder contributed $3.2 million and Flagler contributed $2.1 million. Miami Jai-Alai, which gave $20,000, has not announced plans for a casino.
But the Jan. 29 vote is leading to increased speculation that St. Louis-based Isle of Capri Casinos, which owns Pompano Park, could buy that fronton near Miami International Airport. Through the end of this year, Isle of Capri has an exclusive right to negotiate a purchase of Miami Jai-Alai from its parent, Florida Gaming.
Florida Gaming is headquartered in Miami and has an executive office in New Albany, Ind.
Competition is already more heated because the Seminole Tribe of Florida Jan. 28 began installing Class III machines at its Seminole Hard Rock Hotel and Casino in Hollywood. That facility is about five miles north of Calder.
Under a compact they signed last Nov. 14 with Gov. Charlie Crist, the Seminoles can upgrade from Class II bingo-like machines at their three Broward casinos. The tribe will have exclusive Florida rights to blackjack and baccarat in Florida, and for the first time pay the state a share of its gaming revenues.
On Jan. 30, the Supreme Court of Florida was scheduled to hear oral arguments on the Florida legislature’s petition to void the Crist-Seminoles compact. The legislature’s leaders maintain that Crist did not have sole authority to negotiate that agreement.
Calder has begun discussions on an agreement to share slots revenue with the Florida Horsemen’s Benevolent and Protective Association, Dunn said. Gulfstream is paying the Florida HBPA 7.5% of slots revenue for purses, and 0.75% for breeders’ awards.
Dunn declined to project the rate Calder will set, but he called discussions "positive." Kent Stirling, Florida HBPA executive director, said he expects an agreement could be similar to that at Gulfstream.
Broward County pari-mutuel casinos hope several members of the legislature this year will introduce bills that would reduce the 50% state tax rate. “Now that we can have slot machines, we plan to join them,” Dunn said.
Pari-mutuel executives maintain that a lower tax rate would leave them more money to expand casinos. That would significantly increase their slots revenue and result in higher tax payments than under the current rate, they claim.