Chilling December loss on pari-mutuel handle by 11%

Feb 11, 2014 3:00 AM

While November proved to be an excellent month for pari-mutuel and card room action in the Sunshine State, the same cannot be said for December with the pari-mutuel handle shrinking by a substantial 11%.

Thoroughbred and greyhound business was way off from the previous year’s handle comparison. The racino card rooms fared slightly better showing gross receipts up an anemic 2.2%. Was December an anomaly or a precursor to a soft winter season?

Unseasonable early harsh winter weather in the northeast generally signals floods of beach goers to South Florida, including gamblers. Tourism numbers indicate that stampede was not as expected. Perhaps Christmas and New Year’s both falling midweek impacted play.

At the mid-point of fiscal year 2013-14 the overall picture for pari-mutuels could affect the mood of Florida’s upcoming legislature in March. We acknowledge longer term results help clarify frequent inconsistencies in month-by-month comparisons. The halfway point, while ahead of nationwide competition, suggests all the maneuvering and changing of venues and/or race dates created a negligible ½% gain for the period.

For those seeking gambling expansion, that’s probably not going to impress legislators and will not make a strong case of increased taxes from racinos or racing venues to further bolster the state budget.

Here’s a breakout of the individual racing entities: Greyhounds were up .04%, Jai Alai off 3.9%, thoroughbreds up 1.17%, Harness down 4.24% and Quarter Horses up 46.8% (a minor fraction of the overall pari-mutuel industry).

The card room story is different. A strong contributor to the state coffers, gross receipts were up 3.4% or over $2 million more than the first six months in the previous fiscal year. A nifty $66 million-plus from the 23 licensed card rooms, led by usual champs Jacksonville Kennel Club, Isle at Pompano Race Track & Casino and Palm Beach Kennel Club.

These “big 3” produced just under 30% of the overall 6-month total, which was quite impressive! Continued steady growth of the poker rooms is keeping many licensees in the black – an insight to why permit holders seek more gaming oriented product and reduced costly racing operations.

Nick Sortal, Fort Lauderdale Sun Sentinel gambling beat reporter, echoed a buzz we’ve been hearing for the past month. His take, based upon both direct interviews and whispers, indicates diminishing chances of any significant (or perhaps any) expansion of gambling in this year’s legislative session.

Sortal points out that venerable House Speaker Will Weatherford recently emphasized his desire that any gambling changes – from resort destinations, to decreased taxes, or addition of table games at racinos, etc. – must require a statewide vote. That strategy, if implemented, would be a tough, expensive route for expansion interests.

With a vote for medical marijuana on the ballot already, adding a gambling amendment in an off-year election poses a myriad of concerns…many of which directly impact Governor Rick Scott’s re-elect ability.

We predict there is very little upside for the largely conservative sitting legislators and Governor to encourage a referendum. Here’s why: The Seminole Compact produces a substantial steady, guaranteed revenue stream to the State General Revenue Fund and Education, which when coupled with current acceptable – albeit slow growing – racino tax revenues, presents a reasonably predictable and stable annual income stream to the state along the lines of the successful turnkey Florida Lottery.

Odds n’ ends: Miami-Dade County approved a proposal for three 450 foot tall building towers on Biscayne Bay downtown…the centerpiece of Genting’s world class resort on the old Miami Herald location. This height is mandated by the FAA as it lies within the pathway of jets taking off and landing at Miami International Airport. Demolition on the old Herald building continues.

Dania Jai Alai will have 550 slots and 11 poker tables operating in the next few weeks making it the eighth permitted racino in South Florida. This first phase of the casino will be followed by a massive remake of the 60-year-old jai alai seating area for the main casino operation expected in 2015.

There are over 300 employees training for slot operations and poker. Jai alai performances will continue on the daily regular schedule during construction. Dania is owned by a South American gaming consortium.

The Herald broke a major story about steroid use in greyhound racing. The Florida Division of Parimutuel Wagering charged veteran owner/trainer Barney O’Donnell, operator of the Florida Kennels complex in Hialeah, with violating state laws – citing the presence of illegal drugs in the kennels where the greyhounds reside. The facility is jointly owned by Hollywood and Flagler (Mardi Gras and Magic City). To date no disciplinary action has been taken.

The Miami Dolphins hired Dennis Hickey as the team general manager replacing Jeff Ireland. Hickey was the personnel director and later assistant GM with the Tampa Bay Buccaneers for the past 18 years.

Baird Thompson and William Hutchinson bring a combined 80 years of gaming marketing and administration experience to Gaming Today. Contact them at [email protected].

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