The Florida legislature began its annual session March 8, with a bill that would authorize up to five Las Vegas-style casino hotels topping its list of issues that would impact the state’s Thoroughbred industry.
The bill, SB 1708, would not allow Florida Thoroughbred tracks or other pari-mutuels to participate in development of casino hotels, known as Destination Resorts, or receive any of their gaming revenues. That has led to opposition from Florida’s pari-mutuel industry—including Gulfstream Park.
However, Gulfstream is hoping the legislature will amend the bill to include pari-mutuels, said Marc Dunbar, a Tallahassee attorney who represents the Hallandale Beach, Fla., track and its parent MI Developments. In that situation, Gulfstream would be interested in applying to build and own a Destination Resort on its property, he said. One resort hotel is designated for either Broward County or Miami-Dade County in southeast Florida. Gulfstream’s 250-acre property is in portions of each county.
Frank Stronach, chairman of MID and of Gulfstream, recently met with several legislators in the capital city of Tallahassee to talk about Gulfstream’s interest in a Destination Resort, said Dunbar, a partner in the Pennington Law Firm in Tallahassee.
Officials of Calder Casino & Race Course and of Tampa Bay Downs declined to comment on the casino hotels bill and other bills in the Florida Legislature, which will end its session May 6.
Sen. Dennis Jones, the bill’s primary sponsor, said he expects that Destination Resorts could attract a combined five million visitors to Florida each year and create10,000 or more permanent jobs. The Florida Senate staff has not yet not determined projected revenues or tax payments for those casinos which would compete for gaming dollars with the state’s three Thoroughbred tracks and other pari-mutuel facilities, as well as with Tribal casinos.
Dan Adkins, general manager of Mardi Gras Casino Florida said his facility, which has Greyhound racing, opposes Jones’ bill and that he expects most Florida horse and Greyhound tracks and jai-alai frontons will share his view.
“I would hope that the legislature would instead offer these kinds of new opportunities to our existing facilities that have been in Florida for decades,” Adkins said. That would include lower tax rates and expansion of products, a chance to be included in developing properties and a share of any revenues from new competitors, he said.
Jones, a Republican from the St. Petersburg suburb of Pinellas, is chairman of the Senate Regulated Industries Committee which has initial jurisdiction over pari-mutuels and other gaming issues.
Last year, he played a major role of negotiating the passage of a gaming bill that for the first time requires the Seminole Tribe of Florida to pay the state a share of its gaming revenues at its seven casinos. He also has supported several recent laws that provided benefits to the pari-mutuel industry.
In 2011, Jones is focusing on bringing new companies such as major casino owners into Florida based on his plan for structures as large as 500,000 square feet that would attract trade shows and major conventions.
“These properties will be larger than the resort hotels we have now, and would help bring new types of conventions and other visitors to Florida,” he said.
The bill specifies that each Destination Resort would have “games authorized in a limited gaming facility, including, but not limited to, those commonly known as baccarat, twenty-one, poker, craps, slot machines, video gaming of chance, roulette wheels, Klondike tables, punch-board, faro layout, numbers ticket, push car, jar ticket, pull tab, or their common variants, or any other game of chance or wagering device” that would be authorized by a new regulatory commission.
The casinos at those resorts would be the first in Florida to have roulette and craps. Last year’s law gave the Seminoles exclusive rights to baccarat and twenty-one, also known as blackjack, for five years. In return, they are paying the state a minimum of $1 billion from gaming revenues over that period.
If other casinos open with blackjack and baccarat, the Seminoles could stop making those payments. Jones noted it will be at least several years before any Destination Resorts open, adding that he expects their combined tax payments would be larger than Seminole payments.
Destination Resorts would pay taxes ranging from 10% to 30 % of gaming revenues, with the rate falling as revenues rise. At pari-mutuels casinos in Miami-Dade and Broward, the state tax rate on slot machine revenues is 35%. Gulfstream and Calder are among the five pari-mutuels that have casinos.
Steve Geller, a former member of the Florida Senate and a former president of the National Council of Legislators from Gaming States, said he thinks the bill could pass in the Senate but not the House.
Geller, now a partner in Fort Lauderdale law firm Greenspoon Marder, noted that this year’s House Speaker Dean Cannon is from the Orlando area.
“A lot of people in Orlando talk about being opposed to gaming for moral reasons, but in reality it is more for Disney reasons,” Geller said.
New casino resorts would be major rivals for tourism and conventions with Walt Disney Co.’s Orlando-area resorts.
Speculation that some members of the legislature would sponsor a casino hotels bill began last November when Rick Scott, then Florida’s governor elect, met in Las Vegas with Sheldon Anderson, chairman of the Las Vegas Sands casinos.
On Jan. 6, newly inaugurated Scott told the Miami Herald he is open to considering proposals for casino hotels. Since then, he has been declining to comment on that topic.
The legislature is considering similar bills in the House and Senate that would allow Greyhound tracks to discontinue racing but still take simulcasts, including Thoroughbred races, and have poker rooms.
Adkins said permission to not have live racing would help some Greyhound tracks that are experiencing declines in revenue, especially live handle, amid competition from Tribal casinos and other gaming. He expects that several tracks, perhaps including Mardi Gras, would continue to have racing and maintain the sport by sending simulcast signals to tracks that do not have racing.
Florida Greyhound tracks must hold a minimum of either 100 or 40 race cards per year, depending on terms of their licenses. In recent years, several of those tracks have closed or transferred racing permits to other tracks. That has left Florida with 13 Greyhound tracks that have racing, using 18 permits.
According to the Florida Division of Pari-Mutuel Wagering, total handle at the state’s Greyhound tracks fell from $342 million in the state’s 2008-2009 fiscal year to $292 million in its fiscal 2009-2010. That was a 15% decline.
Dunbar said Gulfstream opposes the Greyhound bills because they would give that industry what he calls another competitive advantage over other Thoroughbred tracks. He noted that simulcasts of Thoroughbred races are a major part of the business for most Greyhound tracks in Florida.
“The Greyhound industry has been consolidating for several years,” said Jones, noting he has not taken a position on the bills.
Jones expects the legislature to consider the views of Greyhound tracks, Greyhound owners, and breeders and other pari-mutuels.
The Senate is considering a bill would eliminate the Florida Division of Pari-Mutuel Wagering, which is part of the state’s multi-industry Department of Business and Professional Regulation, and put the regulation of racetracks and jai-alai frontons under a new Department of Gaming.
That new agency would have almost identical regulatory and licensing authority as the Florida DPMW, including oversight of the Seminoles gaming operations under terms of the 2010 law. It also would assume some rules and oversight functions of pari-mutuels that are now handled by the state’s Department of Agriculture, Department of Revenue, and several other agencies.
Dunbar said Gulfstream probably will support the bill because it would put state regulation under one agency.