Could Gaming Compact Doom Tampa Bay Downs?

The Florida track could be negatively affected by new laws

Tampa Bay Downs vice president and general manager Peter Berube says the track “might not be in a position to continue” racing if the Florida legislature accepts the latest gaming compact between Gov. Charlie Crist and the Seminole Tribe of Florida.

That compact, signed Aug. 31, likely would prevent Tampa Bay Downs from adding slot machines, which Berube said “could help mitigate the competition” from the Seminole Hard Rock Hotel & Casino in Tampa. Since last year, that tribal casino has had blackjack and baccarat as well as Class III Las Vegas-style slot machines.
The compact has several changes from a gaming bill the legislature passed in May 2009 and Crist signed the following month. Several leaders of the legislature are opposing those changes, thus raising the prospect that no gaming law will become effective in Florida this year.
Berube is still concerned because of a controversial provision of the compact that is not part of the May law.
The compact would allow the Seminoles to stop paying a portion of gaming revenues to the state if Florida allows any casino-style gaming, including slot machines, at pari-mutuels outside the southeast Florida counties of Broward and Miami-Dade.
Tampa Bay Downs, in Oldsmar on the north end of Tampa Bay, is 19 miles from the Seminole Hard Rock, several miles east of downtown Tampa.
“They are in a good location,” Berube said. “You can go there and see players who were coming here but are now there for blackjack and baccarat. Some were among our larger (poker) players and also bet on live and simulcast races.”
Tampa Bay Downs and most of Florida’s other 26 pari-mutuels have poker rooms open year-round for 12 hours a day.
Three Greyhound tracks in the Tampa Bay market also have been losing customers to the Seminole casino, Berube said.
This year from, Jan. 1 through Aug. 31, combined on-track handle at those tracks and Tampa Bay Downs was down 23.4% compared with 2008, according to Tampa Bay Downs’ review of data provided to the Florida Division of Pari-Mutuel Wagering.
“Statewide, it was down 14.2 percent,” Berube said. “The economy is one reason, here and around the state. The decline is bigger here because of competition from the Seminoles.”
Tampa Bay Downs and the three Greyhound tracks are asking legislators not to accept the Aug. 31 compact and asking that any new laws give them the prospect of adding slot machines.
Stella F. Thayer, Tampa Bay Downs’ president, and Howell Ferguson, the track’s vice president and secretary, this month have met with several members of the legislature, Berube said.
Thayer and Ferguson are sister and brother. Their family has owned Tampa Bay Downs since 1986. They both remain committed to racing, Berube said.
“But with this compact, our ability to survive is in question,” he said. “If our on-track business continues to erode, it might not make sense to continue. There are other options for the land the race track sits on.”
He added: “There is a market for casino gaming in our area. We feel there is no reason why we should not be able to serve it.”
Gary Bitner, a spokesman for the Seminole Tribe, declined comment on Berube’s statements.
The Florida Senate this year passed a bill that would have allowed counties to vote on whether their pari-mutuels could have Class II bingo-style slots, which also are called video lottery terminals. That provision was not included in the bill passed by the legislature.
Tampa Bay Downs is coming off a 2008-2009 meet when all-sources handle declined just 2.7%. That was one of the best handle results among U.S. tracks amid the recession. But, partly due to what Berube cites as Seminole competition, on-track handle fell 10.4% to $254,502 per day.
Tampa Bay Downs will hold its 84th season from Dec. 12, 2009 to May 1, 2010.
The Seminoles last year added blackjack and baccarat at casinos in Tampa and in Hollywood, near Ft. Lauderdale, and Immokalee, near Naples. They did that under a 2007 compact with Crist. Last year, the Supreme Court of Florida voided the compact based on its view that those table games are illegal in Florida without an approval by the legislature. But the Seminoles have continued with those popular games.
The compact would permit the Seminoles to have blackjack and baccarat at all seven of their Florida casinos.
This year’s law and compact both require the Seminoles to pay the state at least $150 million a year. Under the compact, payments would decrease by proportions if pari-mutuel casinos in Miami-Dade and Broward ever add blackjack and baccarat. Gulfstream Park has a casino and Calder Race Course plans to open one next January.
Sen. Dennis Jones, a Republican from the St. Petersburg suburb of Seminole, expects the legislature as soon as November will review the compact for possible changes.
“The compact would give the Seminoles exclusivity on almost everything,” said Jones, who heads a committee with initial jurisdiction on gaming. “Many of us have feel there needs to be a balance between the Indians and the pari-mutuels.”
House and Senate members are already discussing those issues with Crist aides and with pari-mutuel and Seminole officials, said Marc Dunbar, an attorney who represents Gulfstream and its parent Magna Entertainment Corp.
“We are focusing on getting the 35 percent tax rate on slots,” said Dunbar, a partner in the Pennington Law Firm in Tallahassee.
The bill passed in May would cut the state tax rate from 50 to 35% on pari-mutuels’ slot machine revenues. The Aug. 31 compact also would permit that tax reduction.