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‘Bad news’ ahead for Florida casinos

Nov 27, 2007 4:52 AM

Florida’s historic gambling agreement with the Seminole Tribe, challenged this week by House Speaker Marco Rubio, is sending tremors of discontent through the state’s other struggling casinos, according to a report in the Miami Herald.

Casino operators say that if the deal goes through, it could further cut into their ability to attract people to their casinos, which they say are burdened unfairly already by a 50 percent state tax on revenue.

"We’re already not operating on a level playing field,’’ said Allan B. Solomon, executive vice president and general counsel of Isle of Capri, owner of The Isle Casino at Pompano Park. "This could have a substantial adverse effect ”¦ I think it could be a very substantial decrease in revenues as a result of the compact.’’

And any reduction in casino business means a reduction in taxes sent to the state, Solomon points out.

The Broward casinos paid more than $49 million in state taxes in the 2006-2007 fiscal year, according to the state Division of Pari-mutuel Wagering figures, and the casinos were not open a full year. The Seminole tribe does not pay state taxes because it is a sovereign nation.

Solomon said the reduction in business the Broward casinos may suffer could "come close to offsetting any benefit’’ from the Seminoles’ deal.

MIGHT NOT PAY

Under the agreement, the Seminoles would pay the state at least $100 million a year, though some provisions allow the tribe to stop payment if revenues fall below $1.37 billion a year. The Seminoles do not have to report their gambling income publicly, but estimates have placed it at more than $1 billion a year.

"That’s the worst-drafted document I’ve ever seen,’’ fumed Dan Adkins, president of Mardi Gras Racetrack and Gaming Center in Hallandale Beach. "There are so many loopholes and problems. I never saw so many ways out of paying in my entire life.’’

Barry Richard, attorney for the Seminoles, said Tuesday the tribe "has no fight with the pari-mutuels. They’d be perfectly happy if everyone thrived.’’

He added that the Broward casinos can ask state lawmakers to reduce their tax rate and noted that initial projections of the revenue from Broward’s casinos have fallen short.

"The only thing we know for sure is that Seminole gaming has a proven track record, and it’s the only proven track record in the state,’’ he said.

Industry analysts say the Broward casino operators may be right to worry.

"As wonderful as this is for the Seminole Tribe, this is bad news for the three operating racinos’ in Broward,’’ said Joseph Weinert, senior vice president of Spectrum Gaming Group. "Not only will the Seminoles get table games, which will attract a whole other class of customers, but the compact also effectively neutralizes their (the Broward casinos) primary competitive advantage — Las Vegas-style slot machines.’’

CARD GAMES

The agreement with the Seminoles allows the tribe to start offering card games such as blackjack and baccarat, plus Las Vegas-style slot machines at its seven casinos, including the Hard Rock hotels near Hollywood and Tampa.

With the new games, the Seminoles will be positioned to start drawing celebrity and other high-roller customers who now head out of state, he said.

"Right now, the Seminoles do very well with the slot machine players, but anybody who wants serious action at the tables is getting on a plane to Vegas,’’ Weinert said.

"Once they get blackjack and baccarat tables, they have the ability to retain a significant number of those in the state. And because they have true destination resorts in Tampa and Hollywood, they can get out-of-state players — and potentially (attract) international players.’’

In Miami-Dade, though, pro-slots forces sought to cast the deal as a government seal of approval on the use of gambling tax revenues to pump up state coffers. They say voters should see the decision by Gov. Charlie Crist as one more reason to put slot machines at the county’s three pari-mutuels: Flagler Dog Track, Calder Race Course and Miami Jai-Alai. The countywide vote is scheduled for Jan. 29.

"By signing it, the governor has achieved what we have been saying all along: Gambling revenue is an acceptable addition to state revenue,’’ said Sarah Bascom, spokeswoman for the pro-slots "Yes for a Greater Miami-Dade’’ campaign spearheaded by the county’s dog and horse tracks.

Crist signed the agreement with Seminole Chairman Mitchell Cypress on Nov. 14.

Rubio challenged the compact on Monday, saying the governor had violated the state Constitution and usurped the Legislature’s authority by entering into the agreement without its consent. Rubio, a West Miami Republican, filed the suit with the Florida Supreme Court.

The Seminoles got involved in the suit Tuesday. Their argument: If the court is going to throw out the compact negotiated with the governor, they ought to have a chance to defend themselves.

The justices could throw out the deal or order the governor to have the Legislature vote on it.

That leaves the Broward casino operators nervously following the action.

KEEPING TABS

At Dania Jai-Alai, where the fourth and final Broward casino remains in the planning stages, owner Boyd Gaming is keeping tabs on the growing battle.

"Obviously, everyone with an interest in the South Florida gaming scene is watching this closely,’’ Boyd spokesman David Strow said.

In the end, though, the gamblers themselves are pretty pragmatic about the possibilities.

Poker player and yacht captain Nick Battaglia, 29, pausing on his way into Gulfstream Park Racing & Casino in Hallandale Beach, said he also patronizes the Hard Rock because its touristy clientele enhances his chances of winning.

"I like the Hard Rock the best,’’ he said, "because they have the worst players and they’re looser with their money.’’