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Casino bill faces resistance in normally friendly Senate committee

TALLAHASSEE — The Senate sponsor of a bill to bring destination resort casinos to South Florida faced a hostile first committee Wednesday even as economists came up with a new projection that shows the project will bring the state a windfall of between $327 million and $455 million in new revenue.

A majority of the members of the Senate Regulated Industries Committee, traditionally a welcome place for casino expansion legislation, told Sen. Ellyn Bogdanoff they would like to see significant changes to the bill before they agree to support it.

Bogdanoff, for the first time, outlined the changes she is willing to make to strengthen support for the measure that would allow for three $2 billion resort casinos in Miami-Dade and Broward counties. And legislative economist Amy Baker detailed the first independent economic analysis she has done of the proposed bill.

Baker said that if the bill becomes law, three resort casinos could generate $1.3 billion to $2.6 billion in annual gaming each year, starting in 2016.

It is based on annual visitors streaming to the resorts, ranging from 6.6 million to 14 million. She predicts that it will result in the annual loss of up to $250 million in revenue from the Seminole gaming compact but be offset by about $172 million to $206 million in one-time sales tax revenues from construction and annual tax revenues of between $127 million to $255 million.

A major negative impact will be the cannibalization of the games from the existing parimutuel industry, Baker said. She estimates that 31 percent of the new gaming will come at the expense of the existing casinos — two-thirds of it from the Seminole Hard Rock casinos and 34 percent from Miami-Dade and Broward's slot casinos. But weighing all the changes, Baker said, by 2016 the net benefit to the state will be between $327.5 million and $455 million.

Bogdanoff, however, said her goal is not to produce an economic benefit to the state but instead to end the patchwork of gambling regulations and replace predatory gaming with gambling intended to draw high-end clients.

Among the changes Bogdanoff said she will introduce before the bill comes up for a vote the first week of the legislative session in January are:

• Give the South Florida parimutuels the same full-casino games but tax them, at the same rate as the resort casinos, only after they increase the investment. For example, the parimutuels would be given a tax rate of 35 percent on slot machines and 45 percent for all other casino games, but that rate could be lowered based on the dollar value of new investment, she said.

• Increase the application fee from $25 million to $125 million, in an attempt to backstop the drop in revenue from the Indian gaming compact and buy out existing parimutuel permits for facilities willing to close down.

• Transfer control of the Department of the Lottery to the proposed Gaming Control Commission — a move that was greeted by significant opposition by members of the committee.

Her changes are designed to win over reluctant lawmakers, such as Democrats Nan Rich of Weston and Maria Sachs from Delray Beach, and Republican Charlie Dean of Inverness, who each said they wanted to see stronger protections for existing parimutuels.

Sen. Dennis Jones, R-Seminole, chairman of the committee, said he wanted to see a higher tax rate — of about 25 percent — for the casino games and wanted the headquarters of the Gaming Control Commission to be in Tallahassee instead of South Florida.

Sen. John Thrasher, a Jacksonville Republican and former House speaker, wants to close the loopholes in existing law that have allowed strip mall Internet cafes to operate as sweepstakes games and barrel racing in North Florida to become a parimutuel competition, but opposes the bill.

"I think this legislation is a major change in the culture and brand of the state of Florida and, frankly, I think it expands gambling to the point where I'm concerned about it,'' he said.

Casino bill faces resistance in normally friendly Senate committee 12/07/11 [Last modified: Thursday, December 8, 2011 11:23am]
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