Gaming industry observers are closely watching Florida’s 2014 legislative session, which convened on March 4 and will last 60 days. The Republican-controlled Florida House of Representatives proposed a constitutional amendment that would require 60 percent of voters to approve any expansion of gambling that is not approved by legislators this year. Like the Senate’s bill, the House measure would create a statewide commission to oversee all gaming in the state except the Florida Lottery. But unlike the Senate proposal, the House bill does not include allowing two Las Vegas-style casinos.
The bill’s sponsor, House Gaming Commission Chairman Rep. Robert Schenck, said the legislation was a “responsible proposal” that would “clean up significant and glaring loopholes in current law.” Schenck added any gambling bill considered during the session must be accompanied by the constitutional amendment.
House Speaker Will Weatherford said, “Our bill is more of a contraction on gaming than any type of expansion.”
Weatherford has insisted that Governor Rick Scott must finalize an agreement with the Seminole Tribe of Florida before the session ends. The current compact was signed by Governor Charlie Crist and ratified by the legislature in 2010. It guarantees that the tribe will give the state about $248 million a year in revenue, totaling more than $1 billion over five years, in exchange for the exclusive right to operate slot machines at four casinos outside of Miami-Dade and Broward. The compact also allows the tribe to operate banked card games—blackjack, chemin de fer and baccarat– at the Hard Rock casinos in Tampa and near Hollywood, plus three other casinos.
The portion of the agreement that relates to table games will expire August 1, 2015. But Seminole Tribe spokesman Gary Bitner confirmed that negotiations are underway. “The tribe looks forward to a positive outcome as a result of the negotiations,’’ Bitner said.
Scott could renew the existing agreement with no noticeable change. He could modify it to allow destination casinos and gambling at racinos in South Florida in exchange for less revenue from the tribe. Or he could give the tribe additional games such as roulette and craps in return for higher guaranteed annual payments to the state treasury. “We’re early, but we’re in the middle of negotiating the compact. I’m not going to talk about what we’re going to do in the middle of the negotiation,” Scott said.
The Seminoles have given the governor’s political committee, Let’s Get to Work, $500,000 in contributions and also have given legislators and the Republican Party of Florida nearly $500,000 more.
In the Senate, state Senator Garrett Richter, chairman of the Senate Gaming Committee, announced, “We’re getting ready to roll the dice” as members began their consideration of three proposals to allow destination casinos in South Florida. The Senate bill would not authorize expanding slot machines to the six counties beyond Miami-Dade and Broward that have passed local referenda to allow them, Richter said, because that would end the state’s revenue-sharing compact with the Seminoles.
Richter said he does not consider the two destination casinos “an expansion of gambling” but an “expansion of commerce.” He also noted that if the Senate bill passes, the state is “at least five years away from the first destination casino opening its doors.”
In addition to creating a statewide gaming authority and allowing the two new casinos, the Senate bill also would require:
• New casinos to devote no more than 10 percent of their real estate footprint to gaming.
• Casino operators to invest $2 billion not including the real estate purchase.
• Casino license applicants to pay a refundable $125 million fee and a $1 million investigation fee, plus spend $250,000 annually compulsive gambling prevention.
• Taxing casinos at a rate of 35 percent.
The measure also clarifies existing criminal gambling law to specifically prohibit the operation of an online wagering business and to prohibit the electronic transmission of information for gambling purposes.
Richter said an actual vote will not take place for about a month because several amendments are expected. One would lower the current slot tax from 35 percent to about 15 percent and another would allow pari-mutuels to offer all casino games, and not just slot machines.
Andy Abboud, vice president of government relations and community development for Las Vegas Sands Corp, said, “We’re disappointed in these bills and confused by the lack of substance. Both the House and the Senate bills do not match the integrity of the conversations we have been having with the legislature both publicly and in private meetings for the last year.”
Abboud called the 35 percent tax rate combined with the $2 billion investment “unattainable” and “not sustainable.” But he added he would “work diligently and patiently” with lawmakers over the next 60 days.
Brian Ballard, a lobbyist representing Resorts World Omni, a division of casino giant Genting Group based in Malaysia, said, “It’s early stages of a process that’s going to evolve. Is it perfect? No. but it’s a good starting place to get the meat and potatoes of this bill started.” Genting Group has spent more than $400 million on 30 acres along Miami’s Biscayne Bay waterfront to someday develop a $3.8 billion Resorts World development. The company and Miami’s Gulfstream Park Racetrack are seeking legislative approval to build a 2,000-slot machine casino and off-track betting facility on the Resorts World site.
Boyd Gaming also has an interest in Florida gaming. In 2012 it signed an agreement with owners of the National Hockey League’s Florida Panthers to build a casino adjacent to the team’s arena in Broward County. That deal depends on state approval of destination casinos.
Meanwhile, significant competition to Florida is rising 290 miles to the east, in The Bahamas. The $3.5 billion Baha Mar Casino &Hotel opens in December with plans to rope in Latin American and U.S. customers that a casino in Miami would hope to attract.
Casino expansion in Florida again faces long odds.
