The general feeling among south Florida track operators and their potential customers is practically euphoric, as the day approaches when they will be able to open their slots emporiums. But the joy may be short lived.
Looking to be the first track in Broward County to install Class III slot machines — the kind that are common in Las Vegas — is the privately-owned former Hollywood Greyhound Park, now called the Mardi Gras Casino.
They will be followed by Gulfstream Park thoroughbred track owned by Magna Entertainment Corp. (MECA) and Pompano Park harness track, which is in the fold of Isle of Capri Casinos Inc. (ISLE).
At some future date, Boyd Gaming Corp. (BYD) will take over Dania Jai-Alai and convert that to what is commonly referred to as a racino. Boyd has agreed to purchase the facility for $152.5 million.
But the approval to install up to 1,500 slot machines has some strings attached, strings that have been placed there by the legislature or by state gaming regulators.
Among these is a 50% tax rate, equal to the highest in the country and called "punitive" by industry insiders; the restriction that these casinos can only operate for 16 hours a day; that the facilities are prohibited from installing ATMs on their casino floors, and that there can be no progressive jackpots such as Wheel of Fortune systems that have been so popular for International Game Technology (IGT).
Yet, these restrictions do not apply to the other casinos in the area that are operated by tribal nations. The Seminole Hard Rock and the Coconut Creek casinos are in the neighborhood.
True, the Native American facilities up until now have used so-called Class II machines — those that pit players against other players in bingo formats. However, that soon will end. Now that Class III machines have been authorized for general use in areas where the voters have approved them, it probably is a matter of just weeks before similar machines are approved in new state compacts for the tribal casinos.
Last week, the federal government got involved in the matter. The U.S. Dept. of Interior advised the state of Florida that it would have 60 days to negotiate a new compact with the Seminoles. Otherwise the feds will intervene by granting Class III approval to the tribe.
When these machines are installed to compete with the newly-licensed casinos, they will be operated with no tax revenue for the state, without limits on the number of machines that can be placed on the casino floor, and with no prohibitions against ATMs or with 24-hour operations.
And, should they be successful in Broward County, state officials believe that Dade County won’t be far behind.