Resort casino bill puts horse and dog tracks at disadvantage

TALLAHASSEE — In a move designed to shift Florida's gambling focus, two legislators filed bills Wednesday that would award exclusive full-casino licenses to three massive "destination resorts" and leave the struggling parimutuel industry to wither.

The goal of the proposals by Rep. Erik Fresen, R-Miami, and Sen. Ellyn Bogdanoff, R-Fort Lauderdale, "is to reduce gaming in the state and have the kind of gaming that is actually going to produce revenue,'' Bogdanoff said.

That would mean no equal treatment for South Florida's eight racinos — race tracks and casinos — which would pay higher tax rates than the new casinos and be allowed to operate only parimutuel and slot machines. It would mean no more monopoly for the Seminole Tribe, which would lose its exclusive right to operate blackjack, baccarat and other table games at their seven Florida casinos and would stop making annual payments to the state.

Instead, the bill would allow full Las Vegas-style games at three locations in the two counties that have already approved referendums allowing slot machines — Miami-Dade and Broward. Any other county that wants to compete for the sites would need to pass a referendum authorizing casinos. In exchange for the exclusive license to operate the high-end "destination resorts," companies would have to prove they will invest $2 billion in their facility.

Applicants would pay $50 million for the right to compete for the licenses and would be judged on their ability to draw tourists from Latin America, Asia, Europe and across the United States, Bogdanoff said.

"Florida is considered the fourth largest gambling state in the nation, but it has let the industry drive policy decisions and that has produced the worst kind of gaming,'' she said. "To me, no kind of gaming is good, but we as policymakers have to decide, do we want gaming with five-star hotels or Internet cafes in strip malls?"

The two lawmakers have carefully cleansed the bill of any emphasis on gambling. The 142-page overhaul of state gambling regulations never uses the word "casino," instead referring to the facilities providing "limited gaming" and calling the legislation the "Destination Resort Act."

Central to the bill is the creation of a seven-member State Gaming Commission, a new state agency that would screen applicants and award licenses to the top applicants and assume regulatory control over the state's gambling structure.

But critics said the bill falls short of the promises made by Fresen and Bogdanoff to end unregulated gambling because it does nothing to regulate Internet cafes, the gambling parlors that have installed slots machine look-alikes under a loophole in the state sweepstakes law.

"All they've done is create very wealthy, legislatively created patronage positions over casino licenses,'' said Marc Dunbar, an expert on gaming law and a lobbyist for Gulfstream Racetrack.

The proposal also gives an advantage to the early entrants into the casino debate — the Las Vegas Sands, Wynn Resorts, Caesar's, MGM and Genting Americas.

Genting, the Malaysian-based company, has already purchased the Miami Herald property in anticipation of building a "destination resort" on the site. The other companies have begun talks to consider real estate purchases in downtown Miami or Broward County.

Under the bill, companies such as Genting that propose to build resort casinos in economic development zones or next to areas of high unemployment would be scored higher in the bidding process.

The Seminole Tribe would also be a winner in the bill. Under federal law, the tribe's seven South Florida casinos would be authorized to expand from black jack and slots to full casino games. Meanwhile, the tribe would no longer have to pay the state $233 million in revenue sharing for the next three years, and its slots competitors — the South Florida racinos — would be placed at a competitive disadvantage. Under the bill the casinos would pay a 10 percent tax rate, while the parimutuels would continue to pay 35 percent.

Bogdanoff concedes that while her goal is to reduce gambling by allowing the parimutuel industry to shrink, the racetracks are a powerful political force that will work to insert provisions into the casino bill to protect themselves.

In the end, she said, this is just the first version. "That bill will look like a dog chewed on it when it gets out of the Senate, and the House will have to decide what it wants to do,'' she said. "We're going to have to let it play out."

Here are some of the other major components of the 142-page bill, which would be taken up when the Legislature holds its two-month session beginning in January:

• A State Gaming Commission would be created to select the winning bidders. It would be headquartered in South Florida and have broad authority to not only issue the licenses but to investigate and issue subpoenas, take enforcement action, collect taxes and impose fees and penalties. It would be exempt from public disclosure rules for some financial data and would be allowed to hold some of its meetings in secret.

• Casino space must be no more than 10 percent of the total square footage of the facility.

• Casino games would include slot machines, roulette wheels, craps, poker, blackjack, baccarat and other table games.

• The casino space would be segregated from other attractions, so that a visitor can attend the resort without ever having to see the gambling venues.

Mary Ellen Klas can be reached at meklas@MiamiHerald.com and on Twitter at @MaryEllenKlas.

Other highlights of the "Destination Resorts" casino bill:

Applicants for a "limited gaming" license would be judged based on ability to "increase tourism, generate jobs, provide revenue to the local economy and provide revenue to the General Revenue Fund."

Bidders would be scored based on a system that gives 35 percent weight to the proposal's design and location, 10 percent to the company's management expertise, 35 percent to the speed with which it can get its plans to market, 10 percent to its access to capital and 10 percent to its community plan.

Key casino employees would have to pay a $5,000 application fee for an occupational license and undergo an extensive background check. Suppliers would buy a $25,000 license and each resort would buy a $50,000 alcoholic beverage license.

Casinos would be open daily, 24 hours a day, and be allowed to serve alcohol at all times.

Resorts would have to prove financial strength and ability to "train and employ residents" including training of "low-income persons."

The commission would serve as the head of the Department of Gaming Control, the state agency that replaces the current Division of Pari-Mutuel Wagering.

The commission would be composed of seven members with staggered four-year terms. They would be appointed by the governor and include an accountant with gaming experience and a veteran law enforcement officer. Three names would be nominated for each post by a nominating committee of legislators appointed by the House speaker and the Senate president.

Commission members would be paid $125,000 yearly and the chairman, named by the governor, would be paid $135,000.

Strict limits would be placed on who can serve on the commission, including a ban on anyone with a personal or financial relationship to any of the applicants or anyone who has been under indictment or been charged with a gambling violation or fraud.

All casino owners and partners would have to undergo strict background checks, including financial screening.

The Department of Gaming Control would contract with the Florida Department of Law Enforcement to assist in investigations and enforcement and contract with the Department of Revenue to assist in tax collection and investigation.

Resort casino bill puts horse and dog tracks at disadvantage 10/26/11 [Last modified: Thursday, October 27, 2011 11:28am]

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