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State economists can't give firm estimate of gambling proposal's impact

TALLAHASSEE — If three destination resort casinos are constructed in Florida as envisioned in a bill before lawmakers, the South Florida economy could reap $206 million in new construction, the state could draw millions of new tourists, and the state's coffers could grow by as much as $455 million over the next four years, the state's chief economist predicts.

Or maybe not. It's anyone's guess.

After three meetings, and much lobbying from the gambling industry, a panel of economists for the state Revenue Estimating Conference on Friday couldn't come up with a firm number on how much the state would rake in from the mega resorts.

The estimates were too "squishy,'' the economists said, the variables too uncertain, and the ambitious time line too susceptible to delay.

"It's a choice of either saying it's indeterminate or put a number down and say it's highly uncertain,'' said Don Langston, economist for the state House of Representatives.

Instead of a firm estimate, the economists will issue a range of numbers and remind legislators that the impact is uncertain, said Amy Baker, the state's chief economist.

Baker, however, did the math on the potential impact. Her calculations may be instructive for many in Florida trying to decide what impact the casino plan could have on future and existing businesses.

Baker assumes that the tight time line outlined in the bill sponsored by Sen. Ellyn Bogdanoff, R-Fort Lauderdale, and Rep. Erik Fresen, R-Miami, will be followed and that construction will finish and games will begin by the 2015-16 budget year.

The estimates, however, could vary. Here are the highlights of Baker's projections:

Tourism. Baker estimates that the destination resorts will draw four kinds of visitors each year: 1) Florida residents who would have traveled outside the state to gamble (153,000 to 370,000); 2) new tourists who would have gone to Las Vegas or elsewhere in the country but now come to Florida or who come from other countries, particularly in Latin America and Asia (823,000 to 1.6 million); 3) current tourists who come to Florida for the destination resorts or add it to their visit (4.3 million to 10.6 million); and 4) local residents who would make day trips to the casinos (1.2 million to 1.3 million).

Tax revenues. Baker assumes the average out-of-town visitor would stay 4.7 nights and spend $151 a day on all expenses, based on Visit Florida data. Those without children are projected to spend three to four hours a day gambling and lose between $125 and $466 per trip, based on Las Vegas numbers. All told, Baker estimates that patrons to Florida's destination resorts would spend between $1.2 billion and $2.5 billion a year on gambling. Their visits would generate $11 million to $15 million in sales tax a year and produce gambling revenue for the state of between $98 million and $255.3 million.

Construction. The bill requires each casino applicant to invest at least $2 billion, and state economists assume the investment will not be limited to the construction of the resort but include furnishings and gaming equipment. As a result, they estimate that the total amount spent will be closer to $1.3 billion per facility. If all three resorts are constructed, they predict the sales tax generated from both the construction and the furnishings will add up to between $172 million and $206 million in one-time sales tax revenues.

Indian gaming compact. Economists assume something the bill sponsors do not: that one of the three casino resorts will be located outside Miami-Dade and Broward. If that happens, it would automatically trigger a provision in the 2010 gaming compact between the state of Florida and the Seminole Tribe, and the tribe would cease payments to the state. In 2015-16, when the casinos would open, that would mean an estimated annual loss of $99 million in revenue to the state.

Cannibalization of parimutuels. Baker estimates the biggest impact of the resort casinos would be on the Seminole Tribe and its Hard Rock Casinos in Hollywood and Coconut Creek. She estimates the tribal casinos would lose between $420 million and $307 million in gaming activity, and that's off their $1.7 billion base. The local parimutuels would lose between $129 million to $240 million, down from their current $364 million base.

Baker, however, debunks critics of the casino legislation. She believes there is enough demand for a larger Florida casino market.

"We have plenty of capacity,'' she said.

State economists can't give firm estimate of gambling proposal's impact 12/09/11 [Last modified: Friday, December 9, 2011 11:21pm]
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