A Tallahassee court cleared the way Thursday for legislators to expand gambling in South Florida without a referendum vote, while two key sponsors of a casino bill finished drafting their proposal to allow three resort casinos to operate in Miami-Dade and Broward counties.
The ruling by First District Court of Appeals Judge Marguerite H. Davis was a victory for Hialeah Racetrack and serves as a promising omen for the push by the world's largest gaming companies to bring resort casinos to Florida.
Davis affirmed a lower court decision, saying the law passed by the Legislature allowing Hialeah Racetrack to offer slot machines was constitutional. She rejected the argument by Flagler Gaming Centers and Calder Race Course, which argued that when voters approved slot machines in Miami-Dade and Broward in 2005 and 2008, they intended to limit the number of permits to the seven pari-mutuels that were currently operating.
Davis said voters did not intend to give the entities "a constitutionally-protected monopoly over slot machine gaming in the state."
The ruling was hailed by Rep. Erik Fresen, R-Miami, and Sen. Ellyn Bogdanoff, R-Fort Lauderdale, who want legislators to approve their proposal to build three resort casinos in Miami Dade and Broward Counties without first having to seek voter approval. They have filed identical proposals to invite companies to submit bids for three casino licenses to a newly created Florida Gaming Commission. Each of the bidders would be required to show that they will invest a minimum of $2 billion in capital in each facility.
This gambling commission, which itself will be carefully vetted, will evaluate the bids and select the winners based on a scoring scale that gives preferences to proposals that create the most jobs and complete work the earliest, Bogdanoff said.
The bills also require that the multi-billion dollar resorts give gambling a low profile. Each resort is restricted to using no more than 10 percent of the total square footage for the Las Vegas-style games, such as slot machines, roulette wheels and craps tables. The gambling space also must be segregated from other attractions — so that a visitor can attend the resort without having to see the gambling machines, Fresen said.
The bills will transfer all the gambling and licensing duties from the Department of Business and Professional Regulation to the gambling commission. Only the state-run lottery program would continue to be run by another agency.
The structure of the new gambling board is patterned after the Nevada and New Jersey regulatory gaming commissions, the sponsors said.
The proposed bill would also require strict background checks for all casino employees and vigorous financial screening for casino owners and partners, Bogdanoff said.
The 90-plus-page bill will give casinos the lowest tax rate yet for any gambling operation in Florida: 10 percent on net revenues. That is certain to draw the ire of the seven pari-mutuels with slot machine licenses in South Florida. They currently pay a 35 percent tax rate on their slots games and have made it clear they want parity, as well as the opportunity to bid for the resort casino licenses.
The proposed legislation has no language addressing pari-mutuels, the horse and dog tracks and jai alai frontons that now operate across the state. It also contains no provisions to regulate or outlaw the so-called internet cafes, maquinitas and sweepstakes gambling halls that have sprung up at more than 1,000 locations across the state because of a loophole in the sweepstakes law.
Both Bogdanoff and Fresen said that it was too early to wrap the internet cafe ban into their bills but both want to see the loophole and the strip mall casinos closed.
"I can pretty much guarantee you that if this bill passes, that ambiguity will be done away with,'' Fresen said. "Maquinitas will be black and white illegal in the state of Florida."
Bogdanoff said that although she would like to see her bill pass the Senate as she proposes it, she predicted it is "going to look like the dog chewed on it" when the Senate is done.
Among the expected changes, she said, is a provision that will give the 10 percent tax rate to not only South Florida slots casinos but to all other pari-mutuels around the state. The reason: The industry traditionally has deep support in the Senate and may be the only way to secure enough votes for the bill in that chamber.
"With all due respect, it's a dying industry and they know it,'' Bogdanoff said. "They need to re-tool themselves."
Although the two lawmakers had initially hoped to have the bill completed as early as Friday, Bogdanoff said that it is more likely to take legislative lawyers until Oct. 17 to get it done.
As for the Florida Supreme Court ruling, lawyers for Calder and Flagler said no decision had been made as to whether the companies will appeal.
Meanwhile, casino companies cheered the court ruling as they continue to lobby legislators to support the Fresen and Bogdanoff bills.
Jessica Hoppe, general counsel for the Malaysia-based Resorts World/Genting Group said the court "has cleared the way for this legislation, and Genting is hopeful that the Legislature will act in the best interests of the Florida economy in the upcoming session."
Genting is the first casino giant to purchase land to underscore its interest in bringing a resort casino to Miami. It bought land owned by the Miami Herald for $236 million and assembled nearly 30 acres of adjacent property for what it estimates will be a $3 billion development called Resorts World Miami.
The Las Vegas Sands has also promised to build a $3 billion facility in Miami. Its executives, as well as those from Wynn Resorts, have also met with South Florida property owners, including the owners of the Miami World Center property in Miami's Park West neighborhood.
South Florida's largest casino resorts operator, the Seminole Tribe, said this week it also hopes to be part of the conversation.
The Tribe, which operates the Hard Rock Casino in Hollywood, is interested in bidding for one of the full casino licenses in Miami Dade or Broward, said the tribe's lawyer Barry Richard. The Seminoles already are committed to paying the state $1.3 billion for first five years of the existing 20-year gambling compact in exchange for the monopoly operation of some casinos games. The state could lose that guaranteed money if competitors are allowed to operate in South Florida.
But, Richard said, it the state is willing to give them a casinos contracts, and re-open negotiations for revenue sharing, "they don't have to give up the money they just make a deal with," the Tribe.
Staff writer Laura Isensee contributed to this report. Mary Ellen Klas can be reached at meklas@MiamiHerald.com.