Florida Senate OKs Slots Legislation

Two bills to authorize slot machines have been approved by the Florida Senate.

by Jim Freer

The Florida Senate approved March 13 two slot-machine bills that would help the state’s Thoroughbred racetracks and other pari-mutuel facilities. However, there is considerable opposition to the bills in the Florida House of Representatives, and the influential Seminole Tribe of Florida is expressing concerns about the legislation.

One bill would reduce the state tax rate on slot machines from 50% to 35% at Gulfstream Park and two other pari-mutuel facilities in Broward County. The lower rate on their Class III Las Vegas-style machines would take effect July 1, 2008.

On Jan. 29 Miami-Dade County voters approved a ballot issue that permits Calder Race Course and the county’s two other pari-mutuel facilities to install Class III machines. In Calder parent Churchill Downs Inc.’s March 14 earnings release, CDI president and chief executive officer Robert Evans said: “We are still examining how best to deploy our capital in the market, and are not ready to announce our plans for a slot machine gaming facility” at Calder.

The other bill would make Tampa Bay Downs, the Ocala Breeders’ Sales Co., and 19 other pari-mutuel outlets eligible for “electronic gaming machines” with a state tax rate of 35%. Sponsors have said the machines would be Class II bingo-like machines, similar to those tribal casinos in Florida have had for more than a decade.

Sen. Steven Geller, whose district includes Gulfstream, is sponsor of the bill that would reduce the tax rate at tracks and jai-alai frontons in Broward and Miami-Dade counties. Following Senate passage, Geller, leader of the Senate’s minority Democrats, told the Miami Herald that House leaders have told him they will consider his bill because it applies only to facilities voters have approved for slots machines.

Geller previously told The Blood-Horse he is less confident about House passage of the other bill because it would expand the number of pari-mutuel facilities with slot machines.
In February, a spokeswoman for House Speaker Marco Rubio said he would consider votes on either bill if he believed there was wide support among House members. When the legislature began its session March 4, Rubio, a Republican from West Miami, said the House would not act on either bill.

Rep. John Seiler, a Democrat with a Broward district, has introduced a bill identical to Geller’s bill. Sen. Dennis Jones, a Republican whose district includes the Derby Lane Greyhound track in St. Petersburg, is sponsor of the bill that would allows Tampa Bay, OBS, and 19 other facilities to have slot machines. No similar bill has been introduced in the House.

On March 8, Gulfstream president and general manager Bill Murphy called the 50% slots tax “ridiculous.” Officials of Gulfstream parent Magna Entertainment Corp. have said they are disappointed in the slots revenue at Gulfstream, which opened its casino in November 2006.

On March 12, the Seminoles CEO for gaming, James Allen, said the tribe plans “to sit out” any lobbying over the bill. But Allen noted the Seminoles are concerned with legal issues regarding the bills.

Allen spoke following a ceremony at which the Seminoles unveiled Class III machines at Seminole Casino Coconut Creek, near Fort Lauderdale. He said the Seminoles believe Geller’s bill could undermine the will of Florida’s voters, who in 2004 passed a constitutional amendment setting the 50% rate for Broward and Miami-Dade counties.  Three of the Seminoles’ seven Florida casinos are in Broward County.

He said the Seminoles believe Geller’s bill would undermine the will of Florida’s voters, who in 2004 passed a constitutional amendment setting the process for Broward and Miami-Dade slots for which the legislature later set a 50% rate.

The Seminoles maintain the bill would permit other pari-mutuel facilities to have machines that meet federal laws’ legal definition of Class III machines.

The bill sponsored by Jones, chairman of the Senate Regulated Industries Committee, also uses the term “game of bingo,” which is generally recognized as Class II gaming.

The Florida legislature will end its annual session May 2. That gives seven weeks for legislators to work on slot-machine regulations and for the Seminoles if they decide to ask House members to oppose either bill.

The Seminoles’ compact with Crist permits them to upgrade from Class II machines to Class III machines at all of their Florida casinos. Under that agreement, they are paying their initial revenue from slots to the state at a sliding scale that can reach as high as 25%.

In January, the Seminoles installed their first Class III machines at the Seminole Hard Rock Hotel & Casino in Hollywood, Fla.

If Crist had not signed a compact by Nov. 17, the Seminoles would have been able to install Class III machines without paying revenue to Florida. The Indian Gaming Regulatory Act permits the Seminoles to have Class III machines because other Florida casinos have them.

The compact gives the Seminoles exclusive rights to blackjack, baccarat, and other Class III table games in Florida. The Seminoles plan to introduce those games this June starting at the Seminole Hard Rock in Hollywood, Allen said.

On Nov. 19, the Florida House filed a petition in the Supreme Court of Florida asking it to void the Seminoles-Crist compact. The House, with support of the Senate, maintains the compact violated Florida separation of powers laws because Crist did not consult with the legislature.

Allen said he did not want to speculate on whether the Seminoles believe they could continue to operate Class III machines if the court rules against the compact. He noted the compact has been signed by Florida’s governor, accepted by the U.S. Department of Interior, which oversees Tribal gaming, and published in the Federal Register.