Will the clanging sound of a slot machine jackpot be the death knell for the casino cruise industry in South Florida?
If voters approve legal slots at dog, horse and jai-alai pari-mutuels in a referendum March 8, the four, sizeable day-cruise ships that operate from ports in Fort Lauderdale and Riviera Beach could wither from the new competition. At the very least, the slot machines would heap more financial pressure on companies that already are behind on their bills.
St. Tropez Casino Cruises, which filed for Chapter 11 bankruptcy on Feb. 9, has as much at stake as anyone. "Their position is obvious," said Jane Grant, a St. Tropez spokeswoman. "They don't want to see [the referendum] pass."
Close to 1 million people took a day cruise last year in South Florida. The ships typically sail twice a day, once in the morning and again at night. They cruise past Florida's three-mile territorial limit, where the covers come off machines and tables not legal in Florida.
Each ship offers blackjack, poker, roulette, craps and more than 400 slot machines. They steam around for four or five hours at sea, or in the case of Discovery Cruise Line, to Bahamas, before returning the same day to port. Fares range from $99 on Discovery to free for regular gamblers on the other vessels.
Already, saltwater casinos appear vulnerable to competition from an expanded casino complex on the Seminole Indian reservation, which opened 11 months ago under the name Seminole Hard Rock Hotel and Casino.
The 2,000-slot casino off of Florida's Turnpike in Hollywood boasts convenience, amenities and a top shelf international brand. Although the machines at Hard Rock are bingo-like games that don't have the full feel and play of bona-fide slots, many observers cite Hard Rock as a factor in recent fluctuations in the day-cruise business.
Although the ships paid 16 percent of the $30.6 million in cruise fees at Port Everglades last year, none met their minimum lease payments, spelled out in 10-year agreements. In a memo to the county commission, Port Director Ken Krauter recommended the port re-negotiate those contracts, saying the day cruise firms were hurt by "the growth of alternative shore-side gaming opportunities."
Combined, the lines will be short by more than $731,000 in the 2004-05 year.
Cruise lines also cite tighter port security, an active 2004 hurricane season and soaring fuel costs for their troubles.
As slot machines proliferate, some customers see ships taking a hit. "There's too many slot machines," said Richard Streeter, a Pembroke Park caterer, before boarding SeaEscape Entertainment's Island Adventure last week. "It's going to dilute the whole thing, the whole population that can gamble."
Slots at tracks would compound those woes. Unlike ships, the landside slots would not be closed until reaching a point three miles off shore. They also would likely charge less for parking and be less vulnerable to bad weather.
If day cruises disappeared, it would hurt Port Everglades but not as severely as in the past.
When SeaEscape and Discovery began sailing from Port Everglades in 1987, they were the only cruises offered for much of the summer, but since then, multi-day cruises have outstripped day cruises as a source of port revenue. A third, one-day vessel, St. Tropez, was added in 2004 after a feasibility study said a "large gambling-focused operation" could expand the market.
Instead, the market may contract. Based on input from SeaEscape and St. Tropez, port officials say the most likely outcome of legalized slots would be a 25 percent to 38 percent decline in the revenue stream from day cruises at the port.
Still, ships will continue to appeal to some gamblers because they offer gaming that won't be allowed even if playing slot machines on land becomes more convenient.
Day cruises in Palm Beach County, where there is no referendum on slots pending, should be less affected. But the Port of Palm Beach depends more on day cruises because it is less suited to handle big multi-day ships.
Palm Beach Casino Cruises, operator of the Palm Beach Princess, plans to add a second ship this month and has invested close to $20 million in expanding its operation. The port is within driving distance of areas where slots are being considered, noted company President Francis X. Murray, "It's something we're concerned about," he said.
Port director Lori Baer said Palm Beach Casino Cruises accounts for 17 to 18 percent of total port revenue. "We are wholly reliant on them being viable," she said. "Anything that erodes that is a concern."
Tom Stieghorst can be reached at tstieghorst@sun-sentinel.com or at 305-810-5008.