Sweeping House Gambling Bill Includes Casinos, More Slots

By  //  March 3, 2015

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Insiders estimate that the casinos would generate about $500 million a year

Governor Rick Scott today announced the appointments of Melissa Sellers as Chief of Staff and Jackie Schutz as Communications Director in the Governor’s Office beginning December 1.

Two Las Vegas-style casinos, greyhound tracks without dog racing and slot machines at two pari-mutuels outside South Florida are all on the table in a sweeping House proposal released Monday.

TALLAHASSEE – Two Las Vegas-style casinos, greyhound tracks without dog racing and slot machines at two pari-mutuels outside South Florida are all on the table in a sweeping House proposal released Monday.

A statewide commission to oversee the gambling industry is also part of a 316-page bill made public by the proposal’s sponsor, House Majority Leader Dana Young, a day before the 2015 legislative session begins.

But what’s left out of the bill may speak louder to some people than the goodies included for pari-mutuels and out-of-state casino operators eager to establish a footprint in Florida.

The proposal includes nothing about the Seminole Indians, whose five-year deal with the state giving the tribe exclusive rights to offer banked card games such as blackjack at most of its facilities dries up in mid-July unless the Legislature reauthorizes or redraws the agreement, called a “compact.”

The card games are a portion of a larger, 20-year deal granting the tribe the ability to have slot machines at its nine casinos across the state.

Bills that would have opened the door for “destination resorts” — casinos with hotels, retail and convention space — have failed to gain traction in the Legislature in previous years, even after lawmakers spent $400,000 on a gambling study.

The sweeping proposal offered Monday by one of the House’s most-powerful Republicans comes in sharp contrast to the past, when conservative members in the heretofore gambling-leery House have consistently balked at any gambling expansion.

Dana Young

Dana Young

“This is the year to have this conversation because, at this point, our members are going to possibly be required to make a decision on renewal or expiration of the Seminole gaming compact,” Young told reporters at a news conference Monday afternoon.

Young’s proposal includes some components that were part of a mammoth measure last year by then-Senate Gaming Committee Chairman Garrett Richter, who withdrew the bill when it became clear he lacked the votes for passage.

Senate Majority Leader Bill Galvano, who was the Legislature’s chief negotiator with the tribe and then-Gov. Charlie Crist five years ago and is overseeing talks this year, said he had not yet read Young’s proposal but expressed caution.

Bill Galvano

Bill Galvano

“That type of legislation which is similar to the omnibus gaming bills that we have seen in the past will certainly help fuel the discussion,” Galvano, R-Bradenton, said.

“The challenge is when you have bills like that that aren’t generated from the membership and on a component-by-component basis, historically they’ve died under their own weight.”

The state stands to lose $116 million a year if the revenue from the card games shared by the Seminoles goes away.

At least $250 million a year would be at stake if the legislation proposed by Young, a Tampa Republican, were to pass.

With negotiations between the tribe and Gov. Rick Scott at an apparent standstill, and no formal talks between the Seminoles and legislative leaders, Young’s proposal — and its timing — could be a shot across the bow.

Brian Ballard

Brian Ballard

“They’re smart to have a viable alternative that keeps the Seminoles honest, if nothing else,” said lobbyist Brian Ballard, who represents the Palm Beach Kennel Club and Resorts World Miami, a division of Malaysian-based Genting Group, which has purchased bayfront property in Miami and joined forces with Gulfstream Park with the hope of opening a downtown casino.

“(Young’s proposal) is a good place to start. The added deal where you have to buy out existing permits could be pretty expensive and tough,” Ballard said.

Under the existing agreement with the state, the Seminoles agreed to pay a minimum of $1 billion over five years in exchange for exclusive rights to table games at seven of its nine facilities.

The deal, which has escalating payments, allows the Seminoles to halt the payments if slot machines exist anywhere outside of Broward and Miami-Dade counties, excluding those operated by other tribes.

The tribe can also reduce its payments if South Florida pari-mutuels are allowed to have banked card games, or if slots are authorized at any facilities that weren’t already operating in Broward or Miami-Dade, except for Hialeah Race Track, when the deal was signed in 2010.

Young’s gambling overhaul would allow pari-mutuels that have been racing horses or dogs or holding jai-alai matches for at least 25 years to add slot machines if county voters have given approval.

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The Palm Beach Kennel Club and the Naples Fort Myers Greyhound Racing and Poker would be eligible for the slots and could also drop dog racing altogether, under Young’s plan.

Her plan would also do away with 12 “dormant” pari-mutuel permits, put an end to “portability,” which allows pari-mutuel operators to transfer permits to different locations if they meet certain criteria and lower the tax rate on “racinos” — pari-mutuels with slot machines — in Miami-Dade and Broward counties from 35 to 25 percent.

Young has proposed a four-bill gambling suite that also includes a constitutional amendment that would ask Florida voters if they want to put a moratorium on any new gambling permits.

The two Las Vegas-style casinos, which would only be allowed in Broward or Miami-Dade counties, would come with a hefty price tag.

Applicants would have to promise to spend at least $2 billion on capital costs, not including the purchase of the property, and pay the state a minimum $175 million per year. Insiders estimate that the casinos would generate about $500 million a year, meaning a tax rate of about 35 percent.

And the casinos would have to acquire other pari-mutuel permits under a complicated point system. According to Young, the two destination resorts would have to purchase a minimum of four existing permits “for them to even be considered.”

That could mean big bucks for dog tracks or jai-alai frontons, where attendance has steadily declined and whose worth would suddenly escalate under Young’s scenario.


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