Parimutuels Warn Florida About Tribe Compact
By Catherine Dplinski
cdolinski@tampatrib.com
©2009 Tampa Tribune
Friday, February 13, 2009
The state's gaming compact with the Seminole tribe could cost Florida billions of dollars in the long run, parimutuel owners argued on Thursday.
Nontribal casino and racetrack owners as well as horse breeders turned out in force to convince a House panel that their industries are in an economic slump made far worse by the Seminoles' gaming compact.
The compact, which Gov. Charlie Crist negotiated in 2007, authorizes casino-style slot machines at the Seminoles' casinos and grants them exclusive rights to banked card games such as blackjack. The state Supreme Court ruled last summer that Crist lacked authority to execute the compact without involving lawmakers, but the tribe continues to offer the card games.
Lawmakers are now contemplating whether to ratify that compact or negotiate a new one.
In exchange for the exclusive card game rights, the tribe agreed to pay the state a portion of their proceeds - at least $100 million a year, unless its annual gross revenue falls below $1.37 billion.
Dan Adkins, CEO and vice president of Mardi Gras Gaming, told the House committee reviewing the compact that it makes it too easy for the tribe to low-ball their revenue figures and deprive the state of its share.
Meanwhile, he said, the market advantages in the compact all but assure the death of non-tribal gaming, and the end to Florida's hefty tax collections on it. "Ratify this compact, put us out of business, and for the next 25 years, you have the chance of seeing zero."
Jim Allen, head of gaming operations for the Seminole tribe, called that a distortion. The compact, he said, strictly defines what the tribe can deduct from its profit margin. The economic pressures on the parimutuels, he said, predate and remain separate from the gaming compact.
The tribe hopes that lawmakers ratify the existing compact, in exchange for guaranteed payments of $288 million through June 2010 and the promise of thousands of new jobs from expanded casino operations.
Parimutuel owners claim that they can offer a competitive deal if they can get a "level playing field" - for example, equal rights to offer games. Breeders of racehorses also chimed in, since the so-called racinos effectively subsidize them. Several breeders testified that they are either leaving Florida or contemplating it.
It appeared Thursday that the House panel may also tackle the economics and regulation of non-tribal gaming, in addition to compact terms for the Seminoles.
"It really, really disturbs me that we have ongoing taxpaying businesses, that have been established in this state for many years, that we hear from them clearly today that if we don't do something significant, they're going to die," said Rep. Alan Hays, R-Umatilla.
Jobs become focus of Seminole-tracks' casino battle
BY Mary Ellen Klas
© 2009 Miami Herald Friday, February 12, 2009
As Florida's unemployment numbers rise, the decades-old fight between the state's Seminole Tribe and its gambling competitors has come to this: who can promise the most jobs.
The owners of horse tracks, dog tracks and jai alai frontons promised state lawmakers Thursday that if they had been given the same deal as the tribe's Hard Rock casinos, they could produce 23,000 construction jobs and 32,000 direct jobs in Miami-Dade and Broward racinos.
TIT FOR TAT
The South Florida Gaming Coalition pleaded with members of the House Select Committee on Indian Compact Review to ''level the playing field'' and give the parimutuels a lower tax rate to compete with the tribe as well as blackjack and other banked card games the tribe's casinos already offer.
Last week, the tribe offered its own number: 45,000 new jobs.
If the Legislature were to approve the gambling compact the tribe signed with Gov. Charlie Crist, its expanded gambling and entertainment mecca would hire that many people over the next decade, Seminole Gaming CEO James Allen said. The pact, however, has been struck down by the Florida Supreme Court and needs legislative approval to get out of legal limbo.
This week, the tribe launched a new pro-gaming website, jobsforflorida.com, and a 30-second TV spot airing in Tallahassee. Other parts of the state, too, will soon see a public-relations push from the Seminoles as they try to convince legislators to sign onto the gambling deal that gave them Las Vegas-style slot machines and the exclusive operation of blackjack and baccarat in Florida, in return for a guaranteed $100 million a year for 25 years.
By contrast, horse breeders, trainers and racetrack lobbyists told lawmakers that because of the tribe's encroachment on the South Florida casino business, the parimutuels have been unable to subsidize horse race purses, reducing the pool of top-line thoroughbreds racing in Florida.
DYING BREEDS
''It's devastating,'' Marc Dunbar, lobbyist for Gulfstream Racetrack, told the committee. ``Horsemen are leaving. Trainers are leaving, breeding farms are closing.''
Legislators were sympathetic.
''It really, really disturbs me that we have ongoing taxpayer businesses that have been established in this state for many, many years and yet we hear from them if we don't do something significant, they're going to die,'' Rep. Alan Hays, a Umatilla Republican said. ``And with that death goes all kinds of jobs, all kinds of revenue and I don't see the replacement.''
Committee Chairman Bill Galvano, a Bradenton Republican, said he didn't expect the Legislature to reduce the 50 percent tax rate on pari-mutuels because that ''politically is something that will be hard to swallow for the members,'' he said.
But lawmakers will consider other things as the panel prepares recommendations for the Legislature by the start of session on March 3. Among the ideas: changing the way the state defines net income on which their taxes are based, as long as the racinos can show they create jobs.
''There may be economic incentives you can give to existing parimutuels,'' Galvano said.
Allen, the tribe's gaming chief, told the committee the 50 percent tax rate on the casinos ''probably needs to be dealt with'' but urged lawmakers not to tie it to approval of the compact.
''The horse racing industry and the dog racing industry in the United States has been in trouble for many, many years and we're hopeful that that does not become a situation which muddies the water of the legalities of the compact itself,'' he said.
Mary Ellen Klas can be reached at meklas@herald.com. Miami Herald staff writer Michael Vasquez contributed to this report.