Gaming in Florida nothing new
By James Call
Tallahassee, FL – Backers of the bill to allow destination resort casinos say it will change the gambling industry in Florida. James Call reports the bill's sponsors say they want to harness the gaming industry to produce economic development and jobs.
Florida and gambling go way back. Tampa Downs, now known as Tampa Bay Downs, opened its gates to horse racing and betting in 1926. A gaming industry has grown and evolved in the state, with the help of voters chipping away at anti-gambling laws. They approved a state lottery in 1986, and allowed South Florida horse and dog tracks to operate slot machines in 2004. Fort Lauderdale Senator Ellen Bogdanoff says those votes were mistakes, especially the one on slots.
She says it opened a loophole that led to Florida becoming the fourth largest gaming state. She says the growth occurred without a vision, without a policy promoting the state's interests. She singles out the pari-mutuels for setting the stage for the expansion of gambling's growth.
"They made the trigger. They created it so that the Indians can have full-scale gaming and now they are complaining that they are regulated because we have limited ability to regulate the Indians. There's no question. And they were warned that if they ultimately come up with slots that the Indians would be able to expand gaming and it was continually going to put them at a disadvantage."
South Florida's pari-mutuels, horse and dog tracks and Jai Alai Frontons, in essence placed a bet with the slots vote. Former Democratic Senate Leader Steve Geller, who now lobbies for the Mardi Gras Casino in Hollywood, says Broward and Miami-Dade pari-mutuels invested in slots even though the legislature placed a higher tax rate on the machines than expected.
"The Legislature under the leadership of Governor Bush, passed it with a tax rate that guaranteed that they would lose money. The tax rate was 50-percent of gross, plus millions of dollars per year, per facility. Plus purses, plus local taxes, and, by the time they were through, they were paying 60 to 65 percent depending on which facility you were talking about."
Geller says the pari-mutuels swallowed the high taxes and went to work to get more favorable rates. The attempt to discourage gaming's growth also failed because the Seminole Tribe is a separate nation within Florida. Whatever state law permits, the Seminoles are allowed to engage in without interference.
When slots became legal, the Seminoles opened casinos then negotiated a compact with the state to offer banked card games. Now, Bogdanoff and Miami' s Erik Fresen say they want to transform Florida's gambling industry into an economic development tool that produces jobs. They say their destination resort bill with casinos will change the face of gambling in Florida.
"What we have in Florida right now is that the entire gaming structure caters to people in the state. And it is predatory gaming. So, if we are going to be a gaming state, what do we want to be? Well, if we are going to have it we might was well create the kind of gaming that brings in international tourists. That actually creates economic development, more jobs for the state."
A three-hour Senate workshop on the bill indicates Bogdanoff and Fresen have a lot of work to do in a short time if the bill is to pass during the 2012 Legislative Session.
Lawmakers and industry representatives question whether Florida can support the three casino resorts the bill permits. Economists are studying how the proposal will affect state revenue. And in the discussion, the pari-mutuels see an opportunity to gain parity with the Seminole casinos and the new ones. Currently pari-mutuels pay a 35-percent tax and are limited to poker rooms. Casinos would be to offer all games and pay a 10-percent tax.
The bill places the state at crossroads concerning gambling. And Geller, the former lawmaker/ current lobbyist, says if you want to see which direction Florida is headed, then keep your eyes on the tax rate.
"The question is what kind of gambling do you want to have and how many jobs do you want to create? If you have a 70-percent tax rate you will have slot machines at Magic Mart. It won't create any jobs to think of and that's what you get. At 10-percent tax rate you get the Bellagio, the Venetian, the Wind and you get many, many more jobs. So the state has to determine what its end goal is."
Seminole County Senator Dennis Jones chairs the Regulated Industry Committee which currently has possession of the bill. Jones seems to be headed in the same direction as Bogdanoff. Although, he calls the proposal a "Trade Show Industry" bill.
"This is a huge new industry in Florida. It does not have a trade show industry now. We are not part of the national/international circuit for that kind of business."
Jones wants another workshop on the proposal. He says he intends to have a committee vote in January. The bill's next stop would be the Rules Committee, chaired by St. Augustine Senator John Thrasher who has expressed skepticism about the proposal.