Companies bet on expanding gambling in Florida

Companies bet on expanding gambling in Florida
By Michael Vasquez and Mary Ellen Klas

Lisa Johnson of Bel Air, Md., celebrates a winning hand in blackjack at the Seminole Hard Rock Hotel & Casino near Hollywood. Florida was once the state where casino blueprints went to die. Three times in one 16-year span, voters rejected the idea of Las Vegas-style casinos.
So the pro-gaming forces regrouped and shifted strategy. A giant leap into Vegas territory was no longer the goal.

Instead, the industry pushed for baby steps. Small-scale slots parlors came to horse and dog tracks — but only in South Florida. Poker rooms spread steadily — small-stakes games at first, then high stakes.

Now that state leaders are once again debating whether to allow Vegas-style resort casinos, the cumulative effect of those previous baby steps is clear: South Florida voters have grown accustomed to, and tolerant of, gambling. And Florida is already a big-time gaming state, regardless of whether new resort casinos are built.These days, an assortment of prominent casino developers are vying for a piece of the action. An international casino giant purchased the waterfront Miami Herald building in Miami hoping to build a casino and hotel project, and other big players, including Wynn Resorts, are lobbying state lawmakers.

In today’s sluggish economy, gaming interests see an opening for glamorous large-scale casinos that previously might have been shunned as too massive. Jobs — in particular, the jobs associated with upscale casino amenities such as restaurants, convention space, and hotel rooms — are a key selling point.

Further emboldening the industry: growing public acceptance of Florida’s gaming identity, particularly in South Florida. Fifty percent of likely voters in Miami-Dade County said in a Bendixen & Amandi poll conducted last week that they support building additional casinos in Miami or Miami Beach. About 38 percent were opposed, the rest undecided. Male voters tended to be more pro-casino than female voters while white and Hispanic voters supported casinos far more than black voters.

The polling firm’s managing partner, Fernand Amandi, explained voters’ generally receptive attitude this way: “Look, we already have it here.”

“The community didn’t fall apart,” he said. “A lot of the concerns that some of the opponents had mentioned would happen, didn’t necessarily materialize.”

Just how large is gaming in the Sunshine State? A Miami Herald analysis last year found that tribal and parimutuel casinos together amount to a nearly $2 billion industry in Florida. In Miami-Dade and Broward counties, casinos represented nearly 8,800 local jobs. Nationally, Florida ranges from the fourth- to sixth-largest gaming state in the country, depending on the measurement criteria.

State legislation that would pave the way for destination casinos has been proposed in Tallahassee for the past three years. Though the proposal has yet to clear the House or Senate, each year it moves further along in the process.

Next year, though, lawmakers’ focus on redistricting and budget issues will make approval unlikely, according to Sen. Dennis Jones, who has sponsored destination casino legislation in the past and chairs the Senate committee focused on gambling.

“But it will happen eventually,” Jones predicted.

In 2004, Florida voters narrowly approved a constitutional amendment that paved the way for slots at South Florida parimutuels. But the constitutional amendment rules have since changed, requiring a 60 percent supermajority instead of a simple majority. That 60 percent threshold is basically seen as out of reach in a statewide casino vote, so attention has focused on getting a bill passed in the Legislature.

The lobbying push has come from both out-of-town interests — including Genting Malaysia Berhad, the new Herald property owner — as well as local entities with casino dreams. The Fontainebleau Hotel in Miami Beach, which has long had an interest in bringing casinos to Florida, last session hired as its lobbyist Billy Rubin, a close friend of Gov. Rick Scott. Rubin also lobbies for Mardi Gras Casino in Hallandale Beach.

Genting has a mixed-use development in mind for its new Miami site, including a hotel, convention center, shops and restaurants. Even if the state’s gambling laws don’t change, Genting Group Chairman KT Lim said recently, the project will go forward, minus a casino.

The catch: the timeline for construction would be dramatically slowed, and it could take 20 years or longer to complete.

“With gaming, that can be accelerated,” Lim said. “We’re keen to get going and create more jobs.”

Though Scott campaigned on a promise not to expand gambling, he also vowed to focus on job creation. Scott has so far stopped noticeably short of rejecting the resort casino idea.

South Florida already has one property that could be classified as a resort casino: the Seminole Hard Rock Hotel & Casino near Hollywood. The Hard Rock’s mixture of restaurants, nightclubs, and games, including blackjack, has made it a steady draw for both locals and tourists. On the weekends, the place gets packed, said state Rep. Ari Porth, a Coral Springs Democrat.

“People are so enthusiastic about the product, and want that sort of entertainment,” Porth said. “And I think there’s room for more.”

The Republican-controlled state Legislature still includes many conservative members who are staunchly anti-gaming, but others, like Sen. Ellyn Bogdanoff, have essentially given up. Only a few years ago, Bogdanoff campaigned with former Gov. Jeb Bush against bringing slot machines to Miami-Dade and Broward County parimutuels. But voters ultimately approved slots in both counties, and Bogdanoff has become a strong supporter of allowing big-name casino operators from Vegas and elsewhere to set up shop here. Bogdanoff has explained her new stance as trying to bring competition to “an industry that is not going away.” The social costs of gambling — particularly the financial and psychological damage that comes with compulsive betting — often take place behind closed doors, making it hard to measure. But the number of callers to the state’s toll-free problem gambling helpline provides one indicator, and that number has consistently increased during Florida’s gambling expansion. Perhaps more troubling: About a third of callers usually admit to some sort of illegal activity to fund their habit, such as embezzlement or theft.

And there is still some political opposition to the idea of gambling expansion. State Rep. Dennis Baxley, an Ocala Republican, equates gaming with crack cocaine, and says its profits are made “primarily on the backs of the poor.” Though pro-gaming forces have had the momentum of late, Baxley says it would be a mistake to assume destination casinos are a shoo-in, or that preserving the status quo doesn’t matter.

“We still have a controlled number of locations,” Baxley said, referring to existing tribal casinos and parimutuels. Baxley said most members of the Legislature have publicly stated they’re against expanding gambling, and that the ultimate outcome may hinge on the public “holding them accountable and talking to them about it.”

While Florida’s existing casinos provide would-be resort developers with an “it’s already here” sales pitch, those same tribal casinos and parimutuels represent a serious obstacle to new casinos ever being approved. Simply put: Those who opened up first want to protect their turf.

Dan Adkins, vice president of Mardi Gras Casino, which is also a dog track, said he could support a bill in the Legislature that approved new resort casinos — but only if his facility was given the same tax rate and table games that the new guys would get.

That’s a big if. Destination casino developers have been laying the groundwork for a tax rate of about 10 percent, while Mardi Gras pays 35 percent. Mardi Gras also lacks lucrative table games such as blackjack that would certainly be a part of new resort casinos.

“It’s a matter of fairness,” Adkins said. Asked what would happen to a bill in Tallahassee that didn’t include perks for the parimutuels, Adkins responded: “It would die a horrible death.”

Miami Herald staff writer Elaine Walker contributed to this report.

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