If they have their way, South Florida racetrack and jai-alai fronton owners would score the sweetest deal in the country should voters approve the industry-spon- sored slots initiative Tuesday.
Under the deal proposed by the members of the gaming industry group Yes for Better Schools and Jobs, racetracks-turned-casinos would pay 33 percent of their slots revenue in taxes for schools and local governments. But other states that allow slot machines at racetracks insist on a much bigger slice of the action.
In New York, the combined racetrack casino, the so-called ''racinos,'' pay roughly 80 percent of their slots revenue in state taxes and administrative costs. Racetrack owners in Rhode Island share 60 percent of their slots revenue with the state.
The lowest tax rate is in Louisiana, where racinos pay 36 percent. ''The racetrack owners in Pennsylvania are making a ton of money off of this,'' said Bennett Liebman, a former New York state race commissioner who is a professor at the Albany Law School. ``I would say that what they're getting in Pennsylvania is more than fair.''
`WOULD BE LIVID'
In addition to the healthy profits South Florida track and fronton owners want from running slots parlors, adding the machines could also make their parimutuel licenses worth hundreds of millions of dollars each, based on sales in other parts of the country.
''If the voters of Florida really understood how much money they are about to give away, they would be livid,'' said Earl Grinols, an economics professor at Baylor University who has been critical of the gambling industry.
Voters in Miami-Dade and Broward counties will decide next week whether to legalize slots. But if either county passes the measure, terms of the deal -- including how much tax the racetracks will pay -- will be hammered out by lawmakers in Tallahassee, where ideas about appropriate regulation range from the hands-off approach to complete state ownership of the machines.
Jim Horne, the former state education chief who heads up the pro-slots group, said the 30 percent tax would strike a fair balance between competing with untaxed Indian casinos and ``maximizing dollars to help schools.''
Horne said taxes probably won't be the only state revenue: Racinos are expected to pay a per-machine-fee to offset the cost of regulation.
`SWEET SPOT'
''There's a sweet spot right there in the 30 to 35 percent range,'' said State Sen. Steve Geller, D-Hallandale Beach, who will lead the fight to keep the tax rate in the range proposed by the gaming industry. ``When you get much higher than that, there's very little point because they make so little money.''
But the 30 percent tax rate is just a starting point for negotiations, said Miami Rep. Juan Zapata, a Republican member of the House committee that will write the legislation regulating slots. ``The industry is talking 30, but I think we're talking significantly higher.''
OPPOSED TO PROPOSAL
Critics of the industry's proposed deal in Florida insist that racinos are profitable in every state, regardless of taxes, because the laws limit competition. Recent sales of racino licenses in Pennsylvania suggest that gambling industry executives expect to make huge sums of money there, despite the high tax rate.
After Pennsylvania legislators approved slots last summer, an aging harness track in Wilkes-Barre, bought for $47 million in 1996, was sold for $280 million to a Connecticut Indian tribe. Casino giant Harrah's Entertainment paid $250 million for a half-interest in a track outside Philadelphia that has yet to be built.
''If they can't make money because of the tax, no rational buyer would pay hundreds of millions of dollars for these licenses,'' said Jeff Hooke, a Maryland investment banker who urges states to drive harder bargains with the gambling industry.
Zapata said he'd like to find a way to prevent South Florida parimutuel operators from selling out to national casino companies who ``could create something bigger than folks are interested in.''
Pro-slots lobbyist Ron Book said his clients expect legislators to impose some sort of ownership restrictions
.
`SUPPORT RESTRICTIONS'
''We have always maintained that ownership is part of a strict regulatory scheme, and we support tough restrictions on who can and can't be in the industry,'' Book said. ``You want honorable people in the business.''
Rep. Frank Attkisson, the Kissimmee Republican who chairs the House business regulation committee, said the tax rate will be the subject of the committee's first meeting when the 60-day legislative session begins Tuesday.
''That's just one of the dozens of unanswered questions we have,'' Attkisson said. ``It's a shame Miami-Dade and Broward are voting already because they don't even know what they're voting on.''