As Las Vegas puts in bid,
Florida ponders gambling strategy
Lawmakers heard a pitch and promises from Las Vegas casinos but said they're not ready to open the state's doors to more gambling.
By Mary Ellen Klas
Herald/Times Tallahassee Bureau
© 2010 Miami Herald
Friday, March 12, 2010
Tallahassee: Florida won't be entertaining bids from the Las Vegas Sands to build a resort-style casino anytime soon, the chairman of the House gambling committee said Thursday.But lawmakers need to consider options to expand gambling, he said -- after the state reaches an agreement with the Seminole Tribe.
``The time is coming for Florida to step back and catch its breath and figure out what direction it's going to go,'' said Rep. Bill Galvano, after the House Committee on the Seminole Indian Compact Review heard a presentation from the Las Vegas gambling giant. ``We cannot continue to function as a piecemeal state where we do an expansion here or a tweak there.''
The Legislature's first priority is to resolve the impasse over the Seminole gaming compact, he said. Current negotiations could result in a shorter-term agreement than originally considered, allowing the state to collect the ``dollars that are available to us right away.''
Legislative economist Amy Baker told the committee that by year's end, the state will have set aside $287 million in escrow from revenue-sharing for the tribe's operation of slot machines and card games at its seven casinos -- even without a validated agreement with the state.
Galvano said lawmakers are considering entering into a short-term agreement with the tribe that would allow them to accept the money, and then taking a broader look at state gambling policy, including the possibility of opening the state to resort-style casinos that could bring in more revenue than the compact alone.
``There's no reason we wouldn't enter into the agreement especially when there are dollars available to us right away,'' he said.
Gov. Charlie Crist told the Herald/Times Thursday that he agrees the short-term agreement may resolve the 3-year old stalemate.
The Las Vegas Sands Corp., which owns convention and resort casinos in Las Vegas, Singapore, Macao and Bethlehem, Pa., told the committee it was prepared to invest as much as $2 billion to build a destination resort and convention casino in South Florida or Tampa.
Company representatives presented enticing pictures of their resorts that feature entertainment venues, high-end retailers and restaurants run by celebrity chefs.
`We want to build something so spectacular that the draw would be from South America and Europe,'' Andy Abboud, Sands' vice president of government relations, told lawmakers. ``We don't want to re-circulate money just here in Florida.''
But investment would come with a price. The company wouldn't pay the 35 percent tax rate legislators are promising Miami-Dade and Broward's parimutuel casinos but would seek something closer to 10 percent. And it would ask for a guarantee that competition would be limited to no more than four other competing resorts, not including the Seminole Tribe's.
``There is a recognition that Florida is a gaming state,'' said Nick Iarossi, the Sands' Tallahassee lobbyist. ``People around the state are much more interested in the concept, especially if it's done right.''
Lawmakers reacted with skepticism. Galvano said the near-monopoly on casino games sought by Sands owners was no different than that sought by the Seminole Tribe. Rep. Allan Hays, R-Umatilla, noted that the company's video didn't actually show any gaming.
Baker also presented a report on the financial prospects of auctioning gambling permits, as is done in other states. She said Florida could sustain eight more casinos, and draw between $2.3 billion and $1.5 billion for the permits alone, with millions of dollars more a year from taxes.
But there would be other costs, she said. The state would have to wait at least three years to see the cash while the casinos were under construction and it would lose the revenue sharing money from the tribe.
St. Petersburg Times staff writer Stephanie Hayes contributed to this report. Mary Ellen Klas can be reached at meklas@MiamiHerald.com
Florida eyes more casinos
By Martin Merzer
The Associated Press
© 2010 HeraldTribune
Friday, March 12, 2010
Are cash-strapped Florida lawmakers ready to roll the dice on Las Vegas-style gambling resorts -- or is it just a bluff?
With gaming negotiations between the state and the Seminole Tribe still at an impasse, a House committee looking for an edge explored another option Thursday: full-scale "integrated destination" convention and resort casinos like those in Las Vegas and Atlantic City.
The Las Vegas Sands Corp., which owns or runs casino-based destination resorts in Las Vegas, Singapore, Macau and elsewhere, told the committee it was eager to bring its act to Florida.
More specifically, company officials proposed a $2 billion convention, trade show, vacation and gambling complex, most likely in South Florida. They shared a vision of high-rise hotels, vast exhibit halls, premium retail outlets, fancy restaurants and Vegas-style casinos.
"We want to build something so spectacular that the draw would be from South America and Europe," Andy Abboud, Sands' vice president of government relations, told lawmakers. "We don't want to re-circulate money just here in Florida."
At the same time, a legislative economist said Florida could sustain at least eight more casinos and they would contribute significantly more money to the state's anemic treasury than the casinos run by the Seminoles.
The state could collect at least $1.5 billion just from selling the licenses, said Amy Baker of the Office of Economic and Demographic Research. Then, after a delay of several years during construction, hundreds of millions of dollars could come annually from taxes generated by casino revenues.
"And all of my assumptions on the dollars were about as conservative as you could get," Baker told members of the House Select Committee on Seminole Indian Compact Review.
The discussion came as lawmakers, Gov. Charlie Crist and the Seminoles continue a sporadic, convoluted series of negotiations toward a "compact" that would expand the tribe's gambling offerings and contribute $150 million annually to the state. More immediately, a deal would bring harried budget writers $287 million now frozen in escrow.
The talks have moved through numerous legal and legislative phases, leading to the current impasse. The state's pari-mutuel industry, saying it needs to defend and widen its business, also has a seat at the table.
With all of that in mind, lawmakers said they had no choice but to look for other ways to generate revenue from gambling. Historically, the Legislature has adamantly refused to open the state to full-bore casino resorts.
"We've come a long way here in Florida," said Rep. Julio Robaina, R-Miami. "Here we go."
Thursday's action could also increase the state's leverage over the tribe.
"It's all a dog and pony show," said lobbyist Ron Book, who represents several pari-mutuel operations and attended the hearing. "Everything that's going on in there is a distraction. The House is never going to allow this kind of gambling expansion."
After the session, Rep. Bill Galvano, R-Bradenton, the committee chairman, came close to conceding the point, saying he did not see it happening this year. In addition, local or statewide referendums would be required before gambling could be significantly expanded.
"Now, we're going to have Sands and the rest of Vegas in the state of Florida? I don't think our members are there yet," Galvano said.
Still, Baker said, the opportunity exists.
Based on population density, per capita income and proximity to major airports, the most promising markets for new casinos tend to be in the Tampa Bay area, South Florida, Southwest Florida and along the Space Coast, she said. Likely bidders for licenses included gaming companies like Sands, the Seminole Tribe and operators of horse racing tracks and other pari-mutuel sites.
Sands representatives repeatedly said they were ready to seize a piece of that opportunity.
"There is a recognition that Florida is a gaming state," said Nick Iarossi, a Tallahassee consultant who worked with Sands on its destination resort proposal.
Galvano said he hoped that Thursday's presentations would stimulate more discussion of legalized gambling.
"I think the time is coming for Florida to step back, catch its breath and figure out in what direction it's going to go," he said. "We cannot continue to function as a piecemeal state, where we do an expansion here, a tweak here. We have to have that decision, and this is part and parcel of those discussions."