I get it. I understand that every year the state is scrambling to balance its budget. Take this year as an example: A pandemic is choking off tourist dollars. Nobody seems excited about proposing a Florida income tax. A Go Fund Me page for keeping Florida solvent isn’t in the works.
What to do?
Turn to that tried-and-true favorite: the sin tax. It’s easy. Select a behavior that people want to undertake but is illegal. Legalize the behavior but charge people a fee — a tax — for the privilege of doing it. “It” in this case is gambling, specifically Class 3 casino gaming and sports betting. Sounds like a solid plan. A win-win situation. The state gets a much-needed new revenue stream willingly provided by people who choose to gamble.
Enter the governor of Florida and the Seminole Tribe of Florida. The Seminoles were successful warriors on the battlefield, and it turns out that they’re pretty formidable negotiators as well. Working with Gov Ron DeSantis, they were able to work out an agreement that basically gives them the keys to the Florida gambling kingdom for 30 years, not only expanding their casino gaming offerings (live craps and roulette) but also becoming the major clearinghouse and beneficiary of legalized sports betting, potentially a huge profit generator.
And to make sports wagering as easy as possible, the agreement even allows for placing bets over the phone. No need to know a bookie or leave your house to place a bet, just call it in ... well, click on an app. And hope to win. All this while the tribe is allowed to maintain its gaming monopoly by keeping outside operators from entering the Sunshine State market. For his part, DeSantis did not leave the bargaining table empty-handed. The Seminoles would guarantee the state a minimum of $500 million a year for three decades, with DeSantis estimating a cool $6 billion pouring into state coffers within 10 years.
So, is there a problem? Well, for one, the Legislature still has to approve the agreement as does the U.S. secretary of the interior. Then there is the legal issue of Amendment 3, passed in 2018, that requires Florida voter approval of new casino games. In the past, Floridians have not voted favorably on most gaming initiatives, and putting this agreement to a vote on the ballot might scuttle the whole plan. Several prominent Floridians have already promised just such a legal challenge, should the Legislature approve the pact.
Which brings me to this observation: Before the Legislature or the voters determine the fate of this agreement, it is important to understand the full impact such expanded gaming will have on the quality of life in Florida, even for those residents who never step foot in a casino or place a bet on their favorite sports team.
In Nevada, the first state to legalize full casino gaming, the decision proved beneficial to most citizens who lived there. The reason? Because much of the revenue generated from gambling came from out-of-state visitors who soon discovered that “what happens in Vegas, stays in Vegas,” including their money. The result? Vegas got the profits, while the gambler’s home towns got stuck with the problems. It was only when large numbers of people moved to Vegas as their permanent residence that “Sin City” saw a significant increase in problems related to legalized gambling: bankruptcies, suicides, divorces and crimes committed to acquire gambling money (embezzlement, robbery).
Florida, like Nevada, relies heavily on tourism to secure needed revenue to run the state. There is little doubt that if this proposed deal with the Seminole Nation becomes law, needed state revenues will be generated, and that is good. But along with that benefit, we must carefully weigh the liabilities that come as part of the package, remembering that we already have millions of people who already live here full time. Becoming the “Vegas of the South” will come with a significant social cost. There is no vaccine to protect us from the same problems faced by the citizens of Nevada.
The question is: Are we willing to live with the increase in crime, suicide and family instability that comes with legalized expanded gambling? In the final analysis, we must decide if the additional tax revenue we stand to make with the Seminole pact is worth the social disruption it will cause.
Marvin Karlins is a professor at the University of South Florida’s Muma College of Business. He also is a consultant and author on matters pertaining to gambling.