Gambling’s evolution in South Florida
leading to full-blown casinos

Times, politicians and attitudes have changed
in five years since slots vote

Michael Mayo
News Columnist
© 2010 South Florida Sun-Sentinel
Sunday, March 14, 2010

It's been five years since Broward County voters approved slot machines at four pari-mutuel sites, ushering in a new era of gambling in South Florida.

At the bustling Mardi Gras Casino in Hallandale Beach on Friday, Dan Adkins recalled a contentious meeting he had at the time with then-Gov. Jeb Bush, an avowed gambling opponent. Adkins, Mardi Gras' chief gaming executive, spearheaded the statewide campaign to allow slots in Broward and Miami-Dade counties.

"He got right in my face and said, ‘You might have won the election, Danny, but I'm going to make sure you fail,'" Adkins said.

The three Broward racetracks that have since opened casinos — Gulfstream Park, Mardi Gras (formerly Hollywood Greyhound Track) and the Isle at Pompano Park — haven't exactly failed, but they've had a tough slog. And one site, Dania Jai-alai, hasn't bothered to launch slots, its Las Vegas-based owners preferring to wait for better conditions.

The three Broward casinos have produced $340 million in state tax revenues since opening, far short of the $800 million that state economists projected they would have by this point from four casinos in a 2006 forecast.

"We're underperforming because the state handcuffed us," said Adkins, who now employs 700 people, up from 111 when the site was just a dog track.

After battling Bush, legislators, the sovereign Seminole tribal casinos, a 50 percent tax rate and the Great Recession, the pari-mutuels now face the prospect of even more competition. The cash-strapped Legislature and Gov. Charlie Crist are considering full-fledged Las Vegas-style casino resorts throughout the state.

"There's been a natural evolution," said Alan Koslow, a Hollywood-based attorney who specializes in gambling development and represents the Isle Casino & Racing. "I think the will of the people and the will of the politicians have changed. Now that the pari-mutuels and the Seminole casinos have been up and running, people see it can be beneficial to the state."

Despite the pari-mutuels' struggles, gambling's piecemeal expansion keeps gaining momentum. The Seminoles have brought blackjack and table games to their flagship Hard Rock casinos in Hollywood and Tampa. Two casinos have recently opened in Miami-Dade, where voters approved slots in 2008 after initially rejecting them.

There's talk of bringing blackjack to the South Florida pari-mutuels and slot machines to tracks around the state. And the state keeps loosening restrictions at poker rooms, with higher limits fueling higher revenues.

Just how dramatically things have shifted was apparent in Tallahassee this past week, when legislators eagerly listened to an expansion pitch, including hefty licensing fees, from Las Vegas casino executives.

Koslow predicts that legislators will eventually allow two casino resorts in counties where voters approve them. That could mean new votes in Broward, Palm Beach and Miami-Dade. Natural candidates include existing hotels like the Westin Diplomat Resort in Hollywood, the Boca Raton Resort, and the Fontainebleau in Miami Beach. Between the pari-mutuels, Indian tribes and newcomers, South Florida could be home to some 17 casinos.

It's a far cry from five years ago, when the Seminole Hard Rock in Hollywood was in its infancy, offering only bingo-style slot machines and low-limit poker.

The Seminoles' tax-free monopoly at their seven casinos statewide prompted Broward voters to approve taxed slot machines at pari-mutuels.

But Bush and moralistic legislators didn't make it easy. First they twiddled their thumbs and ignored the voters' will for more than a year after the March 2005 vote. Then they saddled the casinos with a 50 percent tax rate and other onerous restrictions when they opened in 2006-07, including limited hours and a ban on cash-dispensing ATMs (since lifted).

The pari-mutuels have also had a perpetual uphill fight against the Seminole tribe. With 24/7 hours, a resort hotel and an entertainment/dining complex that draws huge crowds every weekend, the sovereign Seminoles have a big edge.

Despite an ongoing dispute with the state over a revenue-sharing agreement, the Seminoles have kept running blackjack and table games. They had an estimated $1.8 billion in gambling revenue from seven casinos in 2008, and their annual payments to the state might end up in the $150 million range, less than 10 percent of revenues.

In contrast, the pari-mutuel casinos ship half their revenues to the state, and they also pay small cuts to the county, local cities, and horse and dog owners.

The 2006 state forecast projected tax revenue of $286 million from the four Broward casinos this fiscal year. In reality, the three operating casinos are on pace to generate just over $100 million in taxes this year, down from $120 million in their first full year and $103 million last year.

"What's gone wrong? The economy and the tax rates," said Koslow. "But the Legislature will keep tweaking."

The pari-mutuels are pushing for a reduced tax rate of 30 percent. Adkins said the lower rate would allow Mardi Gras to build a $150 million complex with a 550-room hotel, retail shops and a new casino. It also would allow for more marketing and promotions, which he said would lead to more revenue.

Adkins showed off artist renderings of his dream complex on Friday, hopeful that tax relief might come this legislative session.

The Isle also intends to build a hotel, entertainment and retail complex in coming years, Koslow said.

The Village at Gulfstream Park recently opened. A handsome mix of restaurants and stores built near the casino, it's still a work in progress. It was busy on Friday night, but it's still a far cry from the rollicking party scene at the Hard Rock, where some 25,000 come on weekend nights. Somewhere, Jeb Bush must be frowning.

Who knows what awaits five years from now?

Michael Mayo can be reached at mmayo@SunSentinel.com or 954-356-4508.