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Economists: If greyhound tracks decouple, state will see revenue dip for two years

GreyhoundsEven before the ink was dry on the proposed amendment to SB 742 to allow greyhound tracks to operate their poker room and slot machine operations without racing dogs, the state's economists were hard at work calculating the cost.

Economists estimate that by ending the requirement to run 100 live races a year, the state could lose between $78,000 to $336,000 in tax revenue the first year and $121,000 the second year. As tracks raise additional money from inter-track wagering operations, taxes from those operations would start to offset the lost revenue in the third year and that would continue to increase over time.

Economists came to these conclusions on Friday, before the amendment by Sen. Maria Sachs, D-Delray Beach, saw the light of day. But this is important: these numbers are not expected to be the net cost to the state if greyhound racing declines.  Download Sachs Decoupling amendment

There are 20 greyhound tracks operating in the state and economists estimate that at least seven will stop live racing if the bill were to pass. With fewer races, there will be a need for less regulation and, proponents say, that will produce a net savings. How much is still unknown but, according to the Spectrum Gaming study commissioned by lawmakers last year, the state spends about $4.1 million a year to regulate the industry and takes in $3.1 million in revenue -- a net loss of about $1 million, according to 2012 numbers.

The higher estimate produced by state economists is based on many assumptions: that seven of the 20 dog tracks stop racing completely, one reduces its races by 50 percent and another by 65 percent and the tax rate on intertrack wagering is fixed at 1.28 percent.

The economists assume that if legislators "de-couple" live racing from the other gambling operations, it won't mean the end to greyhound racing in Florida, just the reduction of it -- by an estimated 42 percent.

The Senate Gaming Committee is scheduled to take up a bill Tuesday by Sen. Eleanor Sobel, D-Hollywood, to require all greyhound tracks to report their injuries. Sachs will be among many of the amendments proposed and it is expected to pass. It's fate remains uncertain in the House. 

Opposing the so-called "decoupling" effort is No Casinos, the Orlando-based anti-gambling organization that argues that ending required racing should be accompanied by a requirement that the poker and slot machines licenses be put up for competitive bid. Absent that, they want dogs to keep running. 

"Parimutuels think they have a birthright to whatever form of gambling is popular over time,'' said John Sowinski of No Casinos.

He fears that if poker rooms and slots casinos are no longer tied to racetracks, they will become portable and the gambling operators will find a way to convert their racing permits to casinos. Gulfstream Racetrack and Genting's Resort World Miami, for example, have proposed using a dormant permit Gulfstream has as a way to allow the casino giant to bring a resort casino to Miami.

"Poker was sold to the Legislature as a way to shore up an important industry,'' he said. "If we’re going to do away with the greyhound business, then the nature of that license has changed and there should be a competitive process to decide who is going to have the permit."

Sachs believes her proposal is at least a first step in a year when the state has additional money to offset the revenue loss. 

"The sense that I get is that both chambers will want to come out of this session with something positive for the state of gaming in Florida,'' she said. "I think this is the way we do it.We are a family friendly state, yet yet we cage dogs and force them to race."

She said her proposal is a compromise between dog track owners and animal rights groups "that is not 100 percent favorable to all parties but pretty close."

Opposing the amendment are the dog owners and trainers. 

 

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