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House to open door to destination resorts, gaming in Palm Beach and dog racing reforms

South Florida could become an even bigger gambling haven with two new destination resort casinos and four dog tracks operating slot machines -- instead of racing dogs -- under a sweeping gaming rewrite filed Monday by House Republican Leader Dana Young, R-Tampa.

The measure, filed in the traditionally gaming-averse House, takes a novel approach to gaming by requiring destination resort operators to buy out active gaming permits in order to operate the swanky casinos.

The bill also helps the powerful South Florida pari-mutuels, who have contributed heavily to GOP election coffers for the last several years, by reducing the tax rate for existing racinos, allowing dog tracks in Palm Beach and Naples to run slot machines, and ending the requirement that dog tracks race dogs in order to offer gaming.

Gaming options would also expand in other parts of the state, such as Jacksonville and Tampa Bay, where wagering on videos of "historical races" would be allowed as a new form of gambling. The seven casinos operated by the Seminole Tribe would also see expanded games as they could offer the full array of black jack, roulette, and craps that are available to the resort casinos.

In return for the added privileges, which would give the existing gaming venues more tools to compete with the Seminole Tribe, the price tag to entering the lucrative casino market would be high. The casinos -- estimated to generate at least $500 million a year in revenues for the owners -- would have to pay at least $175 million a year in gaming taxes. Owners would also have to make a $2 billion investment in the property, and successfully pass a local referendum.

The new revenue would be needed to offset the more than $260 million now paid by the Seminole Tribe under the five-year-old gaming compact with the state. If the bill were to pass, the tribe would no longer be required to pay the state for exclusive gaming offerings but would be entitled to the same casinos games -- such as roulette, craps and black jack -- that the full casinos offer.

"Under the scenario presented in my bill, Florida takes back control of existing gaming in our state and provide a clear blueprint for the path it will take in the future,'' Young said at a press conference announcing the 316-page bill. "The bill provides for an unprecedented contraction of gaming in the state." 

Casino opponents, however, countered Young's description of her bill.

"This bill would cause the biggest expansion of gambling in Florida history,'' said John Sowinski, director of No Casinos, a gaming opposition group backed heavily by Orlando-based amusement part operators like Disney and Universal. "It invites wall to wall casino gambling in Florida, and the social costs and crime that go with it."

He repeated the oft-used line of opponents, that casinos in state like New Jersey and Las Vegas are struggling and said "it defies logic for Florida to increase its dependence on gambling at a time when casino economies across America are imploding."
Young said, however, that after years of legislators rejecting destination resort casinos, this is the year to do it because a portion of the gaming compact with the Seminole Tribe expires this year. If lawmakers approve the bill, the state could lose the estimated $260 million in revenue sharing it receives from the tribe but, Young suggested, revenues would be offset by the expanded games.

The $350 million generated in gaming revenues from the resort casinos would be "significantly more than the current revenue sharing under the Seminole Compact,'' she said, "and the state will enjoy all the related economic benefits from the destination resorts."

On the same day the bill was unveiled, the Tribe broke its silence on compact negotiations and began airing a television ad campaign that calls the compact and its $1 billion in revenues for the state "a partnership that works for Florida." The ad, by Adam Goodman of Tampa, began airing in Tallahassee and will air in media markets across the state in the next several weeks, said Tribe spokesman Gary Bitner

Gaming lobbyist Brian Ballard commended Young for crafting a proposal that "contracts the footprint of gaming." But Ballard, who represents the Palm Beach Kennel Club and Genting's Resorts World casino, which bought the Miami Herald property on Biscayne Bay, said the proposal "has the things some of the people I represent will have to struggle to get through to do, but it makes some sense." For example, Genting would be required to invest another $2 billion into the property, after already purchasing the site for $236 million. 

Young's package includes four bills, including a proposed constitutional amendment that proposes to end the further expansion of gaming after this bill is passed. The main bill, HB 1233, would:

* Allow a destination resort casino to operate in Miami or Broward, expanding the footprint for gambling in South Florida and adding new competition for the Seminole Tribe. The casino would have to pay a minimum $175 million tax rate and pass a local referendum.

* Require applicants for a resort casinos to make a minimum capital investment of $2 billion, not including existing investments, and pass "a tremendous amount of requirements,'' she said. 

* Limit to 10 percent of the resort casino used for the gaming floor.

* Reduce the tax rate for the seven existing South Florida racinos from 35 percent of 25 percent. 

* Create a system of credits that allows for a destination resort operator to obtain a permit from one or more other parimutuel operators.

* Allow Palm Beach and Lee counties to operate slot machines at their dog tracks.

* Impose  a moratorium on new gambling permits.

* Create a point system that encourages race track owners to close facilities in North Florida in exchange for expanded operations in South Florida. In order to gain a permit in South Florida they must have a net of 5 points obtained by purchasing pari-mutuels in other parts of the state. Points are awarded based on the amount of tax revenue they currently generate for the state. 

* Reduce greyhound racing through by decoupling dog racing permits from casinos and card rooms, allowing parimutuel operators to have more flexibility from the increasingly unpopular dog racing.

* End all tax credits for greyhound racing.  "We should not be propping up the gaming industry with taxpayer dollars,'' Young said. 

* Increase injury reporting for operators that continue to race dogs and limit substances allowed to be used on racing horses and dogs.

* Clarify that amusement games at Dave and Busters and Chuck E Cheese are allowed.

* Establish a Gaming Control Commission.

* Allow for the operation of "historic racing machines" at dog and horse tracks outside of South Florida. The new breed of machines that allows players to watch the video of a previous race and bet on it. 

The bill will be a counterpoint to the Senate's more modest approach at reviving the gambling debate. A Senate bill to require injury reporting bill for greyhound racing will be up for a vote on it the first day of the legislative session on Tuesday.

Whether House Republicans can muster enough votes to pass the bill is unknown but Democrats believe their votes will be key to that effort.

“I look forward to working with Majority Leader Young on this gargantuan issue because the road for any gaming bill to pass runs through the House Democrats,'' said Rep. Jared Moskowitz, D-Coral Springs. "I look forward to seeing the inclusion of our issues as priorities.” 

House bill is expected to have its first stop at in the Regulated Industries Committee, where Moskowitz is the Democrats' ranking member.