Florida Session Begins With Hope for Industry

Florida Session Begins With Hope for Industry
Photo: AP Photo/Phil Coale
Florida House Speaker Larry Cretul

The Florida legislature will begin its two-month regular session March 2, with House Speaker Larry Cretul leading an effort to pass a pari-mutuel bill that would include some long-sought benefits for Thoroughbred tracks and breeders.
 
Cretul, a Republican from Ocala, is among legislators that favor a recently introduced bill with the same provisions for the pari-mutuel industry that were in a bill the legislature passed in 2009. That bill was signed by Gov. Charlie Crist, a Republican, but not enacted because of a subsequent dispute over its provisions related to casinos owned by the Seminole Tribe of Florida.
 
This year, the legislature is considering the pari-mutuel and Seminole issues separately.
 
Interviews with Cretul, two other key legislators, and several Thoroughbred industry officials indicate that 2010 might provide a last chance, at least for several years, to make major changes in Florida’s pari-mutuel laws. These changes could include a lower the state tax on slot machine revenue, a provision to allow for additional casino gaming at pari-mutuel facilities, and a not-for-profit Thoroughbred meet in Ocala.
 
Cretul talked about those prospects Feb. 23 at a meeting with Thoroughbred industry officials in Ocala and two days later with The Blood-Horse.
 
“It is a good bill,” Cretul said of the revived pari-mutuel legislation. “As we move forward, some things might be added or taken out,” he added. “But I would like to see us keep it as it is.”
 
Cretul, in his final year as Speaker, told The Blood-Horse he hopes members of the House and Senate “will not propose any dramatic additions and changes.”
 
“If it gets started that way, it could become a floodgate,” he said. “We have a very conservative House. If major changes are proposed, I cannot predict what they would do.”
 
The House passed last year’s bill based largely on a view that it would help boost revenues for horse tracks, Greyhound tracks, and jai-alai frontons and thus increase their tax payments to the state.
 
Cretul, a real estate broker who previously worked in the business office of the Ocala Breeders’ Sales Co., also emphasized the potential economic benefits to the Ocala area.
 
The urgency of arranging a Gaming Compact with the Seminoles also led to support for the pari-mutuel program—with the legislature combining those issues in one bill. Without a compact, the Seminoles would be able to halt a system, started in 2008, under which they pay a share of their gaming revenues to the state.
 
“If we send the governor a bill this year, it will be dead on arrival if we don’t also have an agreement on a (Seminole) compact,” said Sen. Dennis Jones, a Republican from the St. Petersburg suburb of Seminole.
 
Crist and the Seminoles signed a compact in 2007. But the Supreme Court of Florida declared it illegal because the legislature was not part of negotiations.
 
Last August, Crist and the Seminoles revised the Tribe’s provisions of the 2009 law—granting it additional expansion. The legislature rejected those changes, thus preventing enactment of the law.
 
Officials in Crist’s office did not return phone calls for this story.
 
The pari-mutuel and Seminole issues are part of a wider landscape in 2010 Florida politics.
 
Crist is seeking the Republican nomination for a U.S. Senate seat. His main rival for the nomination is Marco Rubio, who was House Speaker in 2007 and 2008 and is no longer in the Legislature. Numerous times Rubio has stated his opposition to any expansion of gambling. Jeb Bush, who proceeded Crist as governor, shared Rubio’s view.
 
If Crist signs a bill expanding some operations at pari-mutuels and also approves a compact granting some product expansions for the Seminoles, there are expectations that Rubio might make that an issue in the Aug. 31 primary. Florida has numerous registered Republicans who are anti-gambling.
 
For 2011 and beyond there are concerns that Florida could again have a governor and/or House speaker who might regard gaming issues as less urgent—even if they are not adamantly opposed to gambling.
 
Rep. Bill Galvano, R-Bradenton, is the chairman of a House committee that is in discussions with Seminole officials on a revised compact.
 
Galvano also has introduced HB 7001, which would make the pari-mutuel provisions of last year’s bill effective July 1, 2010. The major provisions are:
 
*The state tax would fall from 50% to 35% on revenues from the Las Vegas-style slot machines at Gulfstream Park, Calder Casino & Race Course, and three other pari-mutuels in Broward and Miami-Dade counties. Over two years, the annual fee for a casino license would drop from $3 million to $2 million.
 
*Hialeah Park, using its Quarter Horse permit, would be able to build a casino with Las Vegas-style slots. In future meets, perhaps starting late this year, Hialeah would be able to hold Thoroughbred races as up to half of its races.
 
*The Ocala Breeders’ Sales Co. would be permitted to hold a not-for-profit Thoroughbred meet.
 
*The Florida Thoroughbred Breeders’ and Owners’ Association would be given more flexibility in determining the distribution of money from the Florida Breeders’ Awards Program in races for Florida-breds.
 
*Poker rooms could be open 24 hours a day, rather than the current 12 hours, under each pari-mutuel permit. Higher limits would be authorized.
 
On Feb. 23, Cretul and Galvano spoke at a meeting of the Florida Thoroughbred Farm Managers’ Association.
 
The audience included officials of OBS, the Florida TBOA, and the Florida Thoroughbred Breeders’ and Owners’ Association.
 
Cretul told attendees that the bill would provide economic benefits for the breeding industry, and for service industries such as feed and tack companies and other Ocala businesses.
 
“We are in the red zone with this bill,” he said. “Now we need to stick with our playbook the next two months.”
 
The legislature will end its session April 30.
 
“The speaker realizes that the industry and many of the businesses that work with it are on life support,” said Gordon Reiss, an Ocala insurance industry executive who attended the meeting.  He said about 80% of the business of his agency, Gordon Reiss Insurance, is equine-related.
 
Reiss said he expects that many breeders, owners, and service providers will join him in writing, calling, and e-mailing Crist to urge passage of this year’s bill.
 
Florida TBOA Executive Director Dick Hancock, who attended the meeting, said he sees “synergies coming together to get something done this year. Larry Cretul has done a great job in getting others in the House to understand these issues,” Hancock said.
 
He noted that the change in the breeders’ award program and the reduction in the pari-mutuels’ slots tax rate “have been two of the biggest priorities of our legislative program for several years.”
 
Broward and Miami-Dade are the only Florida counties where pari-mutuels can have slot machines. Those machines are Class III, or so-called Las Vegas style.
 
Jones, chairman of the Senate Regulated Industries Committee, and several other Senate leaders last year proposed permitting other counties to vote on whether pari-mutuels could have Class II bingo-like machines.
 
But the House rejected that provision, and it appears unlikely that it will be in a 2010 bill.
 
Tampa Bay Downs is among pari-mutuels that likely would install Class II machines, if permitted.
 
Gulfstream president Ken Dunn and Calder president Tom O’Donnell both said they consider a cut in the slots tax rate to be a priority. The provision to allow use of a permit, in operation, for 24-hour poker, is also highly important for Gulfstream, Dunn said.
 
Calder is using its Calder and Tropical Park racing permits, and thus can have 24-hour poker. Tampa Bay Downs is among pari-mutuels that can only have 12-hour poker,
 
The Seminoles have 24-hour poker at all seven of their Florida casinos.
 
They have blackjack and baccarat tables at three casinos, under terms of the 2007 compact. They have kept those tables, even though the Florida court said they are illegal. Florida pari-mutuel casinos cannot have those two table games.
 
Last year’s bill gave the Seminoles exclusive rights to those games in Florida--but only at their two casinos in Broward County and their casino in Tampa.
 
The compact they signed last year with Crist would permit them to have blackjack and baccarat at all seven casinos.
 
In another major change, it would allow the Seminoles to stop or reduce revenue payments to the state if pari-mutuels outside the two southeast Florida counties are allowed to have slot machines.
The Seminoles last year paid the state $150 million, which is being held in escrow.
 
“The big issues in our discussions are where they can have the banked card games and what level of exclusivity they can have in return for making payments to the state,” Galvano said.
 
The exclusivity issue includes whether pari-mutuels would be able to add any casino gaming.
 
“I would like to see more flexibility for permitting Class II games for pari-mutuels,” Galvano said.
 
In addition to determining what products the Seminoles can offer, “we feel we need to give something of value to the pari-mutuels,” he said.
 
Galvano added: “This needs to be finalized by the end of the session. The Tribe understands this, as well.”
 
“We are trying to find areas for compromise,” said Barry Richard, a Tallahassee attorney who represents the Seminoles.
 
The Seminoles’ goal is to obtain a degree of product exclusivity that they feel would justify paying a share of revenues to the state, he said.
 
Meanwhile, Jones pointed out that studies by his committee estimate that the pari-mutuel provisions of the proposed bill would generate an additional $500 million a year in tax revenues.
 
“There is bi-partisan support in the Senate,” Jones said.
 
He and Cretul both said they feel it is vital for both houses to pass a pari-mutuel bill early in the session, thus avoiding the prospect of facing major amendments or not being passed during the final week. 

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