Slots revenues are up – but not close to what was promised
From Sun Sentinel
By Kathleen Haughney, Tallahassee Bureau
3:50 a.m. EDT, June 11, 2012
TALLAHASSEE – Despite fervent opposition in many parts of the state to proposals to bring Las Vegas-style casinos to Florida, one thing is clear:
Floridians seeking to hit the jackpot are throwing their cash into South Florida’s slot machines – and that’s bringing more and more dollars into the state’s coffers.
With a few weeks to go until the fiscal year ends June 30, the state’s 6,400 slot machines at six different tracks in Miami-Dade and Broward counties have netted $381,775,398. Of that, $133.6 million goes to the state in tax dollars.
That’s a roughly $8.5 million bump over last year, and one of the highest amounts the state has brought in since three South Florida slot machine “racinos” opened in 2006 and 2007. Now there are six, including three in Miami Dade, with another set to open at Hialeah Park in 2013.
And even though that revenue total is well under what track operators promised in 2004, when racinos won permission to ask voters in Miami-Dade and Broward to permit slots, the gambling industry is seeing the numbers as proof of a growing market.
“I think [the total] just further bolsters what we already know,” said Nick Iarossi, a lobbyist for Las Vegas Sands. “It’s a strong gaming market. It’s a growing gaming market, and that’s why there is strong interest from Vegas gaming interests to invest capital here.”
Las Vegas Sands and Wynn Resorts have been trying to crack the Florida gambling market for the past few years. They were joined last year by Genting, a Malaysia company that spent more than $300 million to buy the bayfront Miami Herald building and the neighboring Omni Center in hopes of turning the property into a “destination resort” hotel and casino. But the destination-casino push died in a House committee.
Meanwhile, other counties, including Palm Beach, have pushed to put the issue of slot machines before their voters. However, Attorney General Pam Bondi issued a legal opinion saying that no more slot licenses could be granted without either legislative authorization or a constitutional amendment.
Backers of the 2004 slots referendum argued that putting the machines at South Florida tracks could bring vast sums for schools across the state – estimating $438 million in the first year and $2.5 billion over the first five years.
Following the statewide vote allowing Broward and Miami-Dade to hold local votes on the issue, former Education Commissioner Jim Horne, serving as a spokesman for the campaign said, “This is a great day because education was a big winner today, $500 million a year to help our schools and to help our kids.”
Three Broward tracks began offering slot machines in the 2006-2007 fiscal year and were later joined by Miami’s Magic City in 2009 and Calder Race Course in 2010. Miami Jai-Alai opened its slots parlor this past January.
But the racinos have never come close to generating the promised tax dollars. Collections ranged from a first-year low of $49.6 million in 2006-07, to a high of $138.1 million in 2009-10. That dropped to $125.1 million in the 2010-11 fiscal year, before rebounding to $133.6 million so far this year.
“The reality is that they’re generating less than a third of what was promised back in 2004,” said John Sowinski, head of No Casinos, which lobbied against destination casinos this past spring.
For Sowinski, the new figures don’t justify expansion. He argued the social costs – including higher crime and bankruptcies — would outweigh whatever casinos brought in to the state.
“Gambling interest always overpromise on benefits and refuse to acknowledge the cost,” he said.
But gambling operators around the country are unlikely to back down from their quest to open facilities in Florida. And other counties are hopeful that they can persuade lawmakers to allow slots at their local racetracks, most of which already have poker parlors.
Las Vegas Sands and Genting continue to be interested in the market. And in April, Tallahassee lawyer and political consultant John French filed paperwork creating a political action committee called “New Jobs and Revenue for Florida” — with the purpose of holding a statewide constitutional referendum on gambling.
Chad Beynon, vice president and senior analyst for Gaming/Leisure at Macquarie Capital, said introducing slots in South Florida was a “learning process” because “it took a few years for the guys to figure out how to market to the locals and the snowbirds.”
“We’ve all been pretty impressed with what’s going on there,” he said. “Florida’s probably been one of the bright spots around the country.”
Sun-Sentinel writer Nick Sortal contributed to this article. firstname.lastname@example.org or 850-224-6214
Tax dollars given to state from local casinos
*Current year data is as of June 3, 2012
2010-2011: $18.9 million 2011-2012: $17.9 million
2010-2011: $18.5 million 2011-2012: $18.1 million
Isle Casino Racing Pompano Park
2010-2011: $37.4 million 2011-2012: $39.6
Magic City Casino (Flagler)
2010-2011: $25.5 million 2011-2012: $26.2 million
Calder Casino and Race Course
2010-2011: $24.6 million 2011-2012: $24.5 million
Miami Jai Alai *Opened January 2012
2011-2012: $7.3 million
Copyright © 2012, South Florida Sun-Sentinel