The Florida Legislature passed a gaming bill May 8 that includes several changes sought by the state’s Thoroughbred industry, and a compromise on the contentious issue of table games at the Seminole Tribe of Florida’s casinos.
The bill would reduce the state tax rate from 50% to 35% on revenues from Class III Las Vegas-style slot machines at Gulfstream Park’s casino and at a casino Calder Race Course plans to open next January.
The bill, which likely would take effect late this year, also provides a path for Hialeah Park to return to Thoroughbred racing through use of a Quarter Horse permit it obtained in March 2009. Hialeah, which last held a Thoroughbred meet in 2001, would be eligible for a Class III slots license if it holds Quarter Horse racing during two consecutive years.
In addition, the bill would permit the Ocala Breeders’ Sales Co. to hold a not-for profit Thoroughbred meet through use of its Quarter Horse permit. As a not-for-profit, OBS could convert its Quarter Horse permit to a Thoroughbred permit.
With those changes, the "horse racing industry should be pleased," said Sen. Dennis Jones, a Republican from the St. Petersburg area who was a leading supporter of proposals that would benefit the Thoroughbred industry.
"I agree that this bill is a victory for the Thoroughbred racing industry," said Marc Dunbar, a lobbyist for Gulfstream and its parent, Magna Entertainment Corp.
"There was not a single meeting at which Sen. Jones did not mention that the industry has a $5 billion economic impact and 70,000 jobs," said Dunbar, a partner in The Pennington law firm in Tallahassee.
The key provision of the bill gives the Seminole’s exclusive rights in the state for blackjack and baccarat at four of their casinos.
But the bill bars the Seminoles from having those table games at their other three Florida casinos.
That compromise resolved a dispute that made some legislators concerned Florida would not pass any gaming legislation this year. The bill would retain a year-old system under which the Seminoles pay gaming revenues to the state.
An earlier bill passed by the House but rejected by the Senate would have required the Seminoles to remove all of their blackjack and baccarat tables.
Under the bill passed May 8, the Seminoles could have blackjack and baccarat at their three casinos in Broward County, which competes with Gulfstream and Calder for gaming dollars.
The Seminoles also would be able to keep blackjack and baccarat at their casino in Tampa, which competes with Tampa Bay Downs.
The bill also requires the Seminoles to gradually increase their annual payments, of a percentage of gaming revenues, to the state. The changes include increasing the required annual minimum from $100 million to $150 million.
Tampa Bay Downs would not receive any new gaming products from the bill.
Earlier in the session, the Senate had approved a provision that would have permitted Class II bingo-like slot machines at Tampa Bay Downs and all other pari-mutuels outside the southeast Florida counties of Miami-Dade and Broward.
But that proposal was not in the bill that passed May 8.
Tampa Bay Downs officials could not be reached for comment.
Broward, where Gulfstream is located, and Miami-Dade, where Calder is located, are the only Florida counties in which horse and Greyhound tracks and jai-alai frontons can have casinos and slot machines.
Gov. Charlie Crist indicated May 6 he would sign a bill with provisions in a draft that proved almost identical to the final bill.
For the bill to become law, Crist and the Seminoles would have to include its terms in a Gaming Compact. Then, the legislature would need to approve it in a special session and the U.S. Department of the Interior, which has authority over Tribal gaming, would need to approve it.
That process could extend through this fall. If Crist and then the legislature cannot agree to a compact with the Seminoles, none of the bill’s Seminole and racing provisions would become law.
In November 2007, Crist and the Seminoles signed a compact that permitted the Tribe to have exclusive blackjack and baccarat and to upgrade from Class II to Class III slot machines. In return, the Seminoles would make their first payments of gaming revenue to the state.
The House sued Crist, contending that he overstepped his authority by not including the Legislature in negotiations. In July 2008, the Supreme Court of Florida declared the compact void, saying Crist did not have authority to approve blackjack or other new gaming in Florida.
The Seminoles, a sovereign nation, have continued to operate blackjack and baccarat at three casinos.
Thus, resolution of the Seminole Compact was essential in efforts to pass any gaming legislation, which Jones said he hopes will lead to increased state revenues from pari-mutuels and from the Seminoles.
* Reducing the state slots tax rate at casinos operating at Gulfstream, harness track Isle Racing & Casino at Pompano Park, Greyhound track Mardi Gras Race Track and Gaming, and other Miami-Dade and Broward pari-mutuels that open casinos.
If the bill becomes law, the rate would drop from 50% to 35%. But if any fiscal year’s aggregate state slots revenues do not reach the 2008-2009 level, the pari-mutuels with casinos would combine to make up the shortfall.
Through April 30, those revenues were $88.2 million for the first 10 months of Florida’s 2008-2009 fiscal year.
Officials of Gulfstream and other pari-mutuel casinos have said that lower tax rates would enable them to spend more on capital improvements and marketing, thus leading to increased slots play that would generate an increase in tax payments.
In addition, the annual license fee for a pari-mutuel casino would be lowered from its current $3 million to $2.5 million in fiscal 2010-2011 and to $2 million in succeeding years.
* Thoroughbred tracks that have Quarter Horse permits could use them to hold night Thoroughbred races. Gulfstream and Tampa Bay Downs have Quarter Horse permits. OBS also would qualify for night racing.
Citing timing and logistics, Dunbar said he does not expect that Gulfstream would hold night races in 2010. Among other factors, the Hallandale Beach, Fla., track would have to install lights.
Florida does not have any operating Quarter Horse tracks.
* In a provision that would directly benefit Hialeah Park, a Quarter Horse track would be able to hold Thoroughbred races for up to 50% of a meet’s races--even without authorization from a Thoroughbred track within a 50-mile radius that is holding a meet. Thus, Hialeah under a Quarter Horse permit could run Thoroughbred races without permission from Gulfstream or Calder.
Hialeah Park owner John Brunetti was not available for comment. In previous interviews, he estimated it would cost between $30 million and $40 million to refurbish and re-open Hialeah.