Fear of the unknown is legit in Florida
The most feared word for Florida operators isn’t “taxes.” It’s not even “competition” or “Seminoles.”
And that’s what we have after Florida legislators battled through multiple facets of the state’s gambling laws in recent weeks, trying to find a way to update the existing laws. They gave it a pretty good try, but were unable to reach a consensus. Which means we’re now waiting on the courts.
“When you don’t have certainty, particularly around the Seminole Tribe’s compact and what is legal and what is illegal gambling in Florida, you really don’t get the meaningful capital investment that could turn some of these properties into destination properties,” Marc Dunbar told Dara Kam of the News Service of Florida. Dunbar is a partner with the Jones Walker law firm who represents Gulfstream and is also an owner of the Gretna facility. “It guarantees to the policy-makers that you arguably have the kind of gambling that you don’t want to have, the kind that preys primarily on your constituents, as opposed to the tourists. That, again, is a policy call by these guys.”
For those who play slots at South Florida and Seminole casinos, the failure of legislators to pass a bill means little. Your games were there, and they’ll still be there. Same for poker throughout the state. (We’ll get to the Seminoles and blackjack later.)
But for the actual entities themselves, they’re still paralyzed:
South Florida racetrack casinos were hoping to get a tax reduction and blackjack. Many have expansion plans already on file. But they don’t know if the business climate will be such that they can implement them. They also are waiting (OK, hoping) for some form of decoupling, so they could save expenses on products the public has shown little interest in.
Those in the dog and horse business also are in limbo, because they face a loss of jobs if decoupling were approved.
And pari-mutuels statewide are uncertain of their future. Eight counties passed referendums for slots, and hoped the Florida legislature would approve them. The Senate proposal was insistent that those counties be allowed slots – to the point that it was a deal-breaker for the more conservative House, which pointed out that when slots came to Broward and Miami-Dade counties, it took a statewide vote to approve them. So everybody from casino companies to construction workers don’t know whether they’ll have work or not. (Why did the Senate simply drop the demand that the eight referendum counties get slots, and push through the rest of the House deal? It’s likely they didn’t have enough votes. Powerful Palm Beach County senators, who are trying to get slots for the Palm Beach Kennel Club, probably wouldn’t have been on board.)
The Seminole Tribe of Florida, meanwhile, has cleared grown for more hotel space in Hollywood and Tampa, but CEO James Allen insists the plans are not final. (They have not been approved by the tribal council, for example.) The tribe wanted a compact that included roulette and craps, and said that adding those games would help attract more out-of-area patrons, who expect full casinos. They argue it’s really not about the bottom line, because the tribe currently takes in more than $2 billion, yet projects to take in only about $40 million more were those two games approved by the state.
So now we wait on the court case about Gretna. To review, the Florida Supreme Court is poised to decide on a lawsuit filed by Gretna Racing in northwest Florida. But that ruling would likely extend to the seven other counties that passed referendums. That, in turn, would likely affect the Seminole compact – and the state’s budget, because those revenues are hefty. What goes around comes around.
ADDENDUM/CAVEAT: The sentence above makes for a nice end to the story, but I feel it’s only fair to point out one potential caution. The legislature approved the 2017-18 budget, and once Gov. Rick Scott receives it, he has 15 days to either sign, exercise his line-item veto power, or veto the entire budget. Should he go for the full veto, the Legislature can go for a two-thirds override. Or they can make some adjustments – including passing a gambling bill, which can be shoehorned under “budget” because state coffers are affected. Sorry to go there, folks, but I’m just saying…