Resort Casinos Bill Filed, Again

The long-awaited destination resorts bill, permitting massive luxury casinos in South Florida, was filed Wednesday, accelerating an intense lobbying war that will dominate the legislative session when it begins in January.

The 142-page bill (HB 487) allows the state to issue up to three resort casino permits in Broward and Miami-Dade counties only and sets up a new state regulatory agency to oversee gambling headed by a seven-member commission whose members are recommended by the Legislature.

Modeled after similar regulatory agencies in New Jersey and Nevada, the proposed Department of Gaming Control would strictly regulate gambling in the state, from the pari-mutuel race track facilities, to Internet cafes that offer sweepstakes games and the newly allowed destination resorts.

Bill sponsors say the regulatory commission will help ensure the state is supporting the type of gambling that will bring in the most in additional state revenue and jobs.

But it also is written to favor destination resort operators by giving them a tax rate of 10 percent versus the 35 percent that the eight pari-mutuel facilities that operate slot machines pay in those same counties.

Proponents of the bill include casino operators such as Genting Malaysia and Las Vegas Sands, who have advised bill sponsors Sen. Ellyn Bogdanoff, R-Fort Lauderdale, and Rep. Erik Fresen, R-Miami, in what they would like to see in the proposal. Both casino operators argue these large-scale combination convention centers, hotels, restaurants and casinos will bring much-needed jobs and tax revenue to the state.

Lobbyist Nick Iarossi, who represents Las Vegas Sands, said the company is largely happy with the bill, but disagrees with allowing up to three destination resort permits in South Florida instead of just one or two.

“We are happy that a bill has been filed and we can start the debate on destination resorts,” Iarossi said. “We think it’s a good start and we expect the bill to change over time as it goes through the committee process.”

The casino companies face a tough battle over the next four months against powerful opponents, including several big business lobbies, competitors to casinos, such as the pari-mutuel race track facilities and the Seminole Indian Tribe, as well as groups that object to gambling expansions on moral grounds.

Donn Mitchell, the chief administrative officer for Missouri-based Isle of Capri Casinos, which operates Pompano Park, a dog track in Broward County that also has slots and poker tables, objected to the decision to give destination resort owners a 10 percent tax rate, much lower than the 35 percent tax rate Isle pays on the Pompano facility.

“All we have ever asked for is to give us the same playing field that everyone else has,” Mitchell said.

By allowing these large-scale casino facilities it could jeopardize the state’s compact with the Seminole tribe, which guarantees $1 billion in payments to the state over five years in exchange for the exclusive right to offer certain card games.

If it were to violate that compact, the state would lose the guaranteed revenue. Mitchell said this also places pari-mutuel facilities at risk because they will be paying a large tax rate while the tribe casinos pay nothing. This means the tribe can afford to bolster marketing campaigns, crippling the competing pari-mutuels.

“If we aren’t able to compete on a level playing field, we will be cannibalized,” said Dan Adkins, the vice president of Mardi Gras Casino, a dog track in Hallandale that now has slots and video poker. “If everybody can compete fairly then we have the same shot at attracting new tourism dollars.”

But the casino operators say these large-scale resorts will cater to an elite international clientele and not compete for the same dollars that existing pari-mutuel facilities and tribal casinos receive.

Orlando-based public relations consultant John Sowinski, who is re-launching a “No Casinos” campaign he used to fight efforts to expand gambling in 1994 and 2004 through constitutional amendments, said he disagrees with any effort to expand gambling because of the cost to society in increased gambling addictions.

“We think this is a dramatic over-reach,” Sowinski said. He said the tighter regulations are needed, but disagreed with tying it to the approval of large Las Vegas-style casinos. “While we agree with getting rid of Internet cafes, you don’t have to be the biggest casino in the world to do that.”

Sowinski said he is raising money for his No Casinos group from businesses, restaurants and tourist attractions. He will likely also gain support from religious organizations that oppose gambling on moral grounds.

An effort to pass a destination resorts bill last year failed. Almost as soon as the session was gaveled to an end in early May, lawmakers and lobbyists were hard at work crafting a second attempt at a bill.

Before a bill was filed, the particulars of what it might contain became the worst-kept secret in Tallahassee over the last few weeks as lobbyists and PR strategists were deployed early on to drum up support.

Here is a glimpse at what the bill contains:

-Establishment of a seven-member gaming commission that is in charge of the newly created Department of Gaming Control. Commission members are appointed by the governor, but nominations are supplied by a committee of members from the House of Representatives and the Senate who are picked by legislative leadership.

-Commission members are paid $125,000 a year and the chair of the commission will be paid $135,000.

-The commission must be comprised of Florida residents who have experience in industries such as corporate finance, tourism, investigation or law enforcement, and business law. One member has to be a certified public accountant and another member must come from law enforcement.

-Strict rules on conflict of interest for commission members and employees. Anyone hired to be on the commission or employed by it cannot have worked at, had an interest in, or lobbied on behalf of a gambling license-holder for three years prior to employment and afterward.

-The department will have its own law enforcement powers and the ability to subpoena records.

-The destination resort casino can operate and serve alcohol 24 hours a day, seven days a week.

-The gaming floor cannot exceed 10 percent of the total square footage of the project.

-Companies seeking to open a destination resort will have to submit a refundable $50 million fee, pay an annual license fee of $2 million and guarantee a $2 billion investment in developing the resort.

Fresen also filed two other companion bills, one that creates an open records exemption for proprietary information the Department of Gaming Control and gaming commission will have access to and one that sets up a special trust fund supplied by fees paid by the resort operators that will fund department operations.

By Lilly Rockwell