After months of bickering over the voters’ approval to permit slot machines at pari-mutuel facilities in Broward County, the Florida legislature finally passed a bill that gives the tracks "half a loaf" of what they had wanted.
Beginning as soon as six months from now, Gulfstream Park thoroughbred track, owned by Magna Entertainment Corp. (MECA) and Pompano Park, owned by Isle of Capri Casinos Inc. (ISLE); Dania Jai-alai, owned by Florida Gaming Corp., and privately held Hollywood Dog Track will be able to install up to 1,500 Class III slot machines.
The tax rate set in the bill is 50%, dashing the hopes of track operators that it would be a sliding scale beginning at 35%. Also the facilities will have to pay a $3 million license fee.
And, Gov. Jeb Bush, a strong opponent to the expansion of gambling in Florida, said that he plans to sign the bill even though he finds it distasteful.
"It’s not going to feel good," Bush said. "I just don’t think this is right for our state. The fact that there’s going to be a bunch of slot machines in Broward County doesn’t warm my heart."
Although little has been written about the effect the new law will have on Indian participation, it is expected that Bush will now have to negotiate a new compact with the Seminole Indians and other tribes who operate casinos in the state. The Indians have been looking forward to upgrading their Class II machines to the Class III type used in Las Vegas.
The bill was a compromise between the track supporters who were looking for 3,500 slot machines and the gaming opponents who felt the machines should be limited to the Class II machines commonly used at the Indian casinos and that the tax rate should have been 55%.
With the likelihood that some sort of bill would be passed, the shares of Isle of Capri were trading at a substantial premium that reflected a larger facility with a lower tax rate. When the announcement was made, ISLE shares dropped substantially in trading, falling to $24 from its earlier high of $26.50 per share.
Trading in MECA also was affected by the bill but to a lesser degree, falling to $7 from its previous high of $7.65 per share.