Destination unknown: Casino bill filed but faces stiff opposition

The following article was published in The Florida Current on October 26, 2011:

Destination unknown:  Casino bill filed but faces stiff opposition

By Gray Rohrer

The highly anticipated bill to allow three destination casino resorts in Broward and Miami-Dade counties was filed Wednesday after a nearly month-long bill drafting process.  Casino operators would be required to make a minimum $2 billion investment, and the licenses are priced at $50 million each. Slot machines, poker, blackjack, craps and roulette wheels could be played in the casinos under the bill.

Aside from the new casinos, HB 487 creates an independent gaming commission to oversee all non-Seminole gaming operations in the state, except for the state lottery.

The seven-member commission will control the licenses to conduct gaming operations in the state, as well as regulate and enforce rules so the games played are not rigged. Members will be paid $125,000 per year, with the chairman receiving $135,000. If the bill becomes law, monthly commission meetings would begin 30 days after it becomes effective on July 1, 2012. Commissioners would be able to issue subpoenas, investigate and levy fines to ensure compliance with gaming rules and regulations.

Elected officials may not be named to the commission, but a nominating committee will be set up to recommend candidates for the positions, which will eventually be chosen by the governor. The nominating committee would consist of three members of the House and three Senators, with one member from each chamber coming from the minority party. House Speaker Dean Cannon, R-Winter Park, would choose the House members and Senate President Mike Haridopolos, R-Melbourne, would choose the Senate members. The committee would nominate three candidates for each vacancy on the commission. Nominees and their relatives or business ties must not have financial interests in gaming operations.

Rep. Erik Fresen, R-Miami, who is sponsoring the bill, and Sen. Ellyn Bogdanoff, R-Fort Lauderdale, who will file an identical bill in the Senate, say the delay in drafting the bill centered on the gaming commission, and to ensure a “clean” bill came out of the gate. Yet they know the highly controversial issue of expanding gaming in the state faces tough sledding to make it through the Legislature.

“By the time the bill gets to the floor it’s going to look like a dog chewed on it,” Bogdanoff said last week.

The bill faces stiff opposition from traditionally influential lobbies, but has new momentum in the Senate, where Haridopolos shifted committee membership this summer in an effort to get previously stalled legislation to the floor. Bogdanoff now sits on the Regulated Industries Committee, which blocked a proposal to allow five large casinos throughout Florida this year.

Not included in the bill is a provision to ban Internet sweepstakes cafes, but Bogdanoff said an amendment will likely be tacked on to outlaw the storefronts that offer Internet hubs for slot machine-like games. The ban is sought by a contingent of social conservatives in the House, and could make the bill more palatable.

The Internet sweepstakes café ban “will help the bill get through the House, I don’t know what I can get out of the Senate,” Bogdanoff said.

Rep. Scott Plakon, R-Longwood, has already filed HB 3 to ban Internet sweepstakes cafes, which he calls the “crack cocaine of gambling” in the state. His preference is to pass his bill, and though he is opposed to the expansion of gaming, he is uncertain how he would vote on the destination casino resort bill if the internet sweepstakes café ban was included in it.

Gov. Rick Scott is wary of relying too heavily on revenue from gaming to support the state budget, but thinks local communities should be able to have a say on whether to allow casinos.

For No Casinos Inc., the long-dormant political organization dedicated to preventing the expansion of gaming in Florida, including the ban on storefront casinos is not much of a trade-off for large casinos in South Florida.

“We kind of reject this idea that you have to build the biggest casinos in the world in order to shut down the strip mall casinos,” said John Sowinski, president of No Casinos.

Sowinski issued a press release shortly after the bill was filed urging lawmakers to vote against it, and linking to a 30-second ad that will run in Tallahassee next week – a committee week when lawmakers will be in town. The ad points to a recent Wall Street Journal article detailing a Securities and Exchange Commission investigation into the Las Vegas Sands Corp., one of the casino conglomerates looking to build the destination resorts in South Florida, and questions the timing of the bill. According to the article, the investigation is looking into allegations of  bribes paid to foreign officials in connection with its properties in Macau.

But Las Vegas Sands and Genting, a Malaysia-based casino outfit, contend they will reshape Florida’s gaming focus, bringing in “high-rollers” from across the country and around the globe, instead of serving recreational gamblers, bringing in more revenue for the state at a time when  lawmakers have dealt with year after year of deep budget shortfalls resulting from the harsh economy.

Nick Iarossi, lobbyist for Las Vegas Sands, says their business model is built on the large convention space that will accompany the casino. Under the bill, a maximum of 10 percent of the entire structure would be dedicated to gaming.

“Our CEO Sheldon Adelson built his business model around convention centers,” Iarossi said.

Genting, which recently purchased property in Miami, including The Miami Herald building, says the new resorts will create 100,000 direct and indirect jobs.

“Destination Resorts will complement the state’s international profile for tourism and economic development, create new revenues for governments and businesses at the state and local levels, encourage new investment, and help Florida compete for jobs, transforming the state’s economy in the process,” Genting general counsel Jessica Hoppe said in a released statement.

That push to change Florida’s gaming, however, is bound to upset the state’s existing gaming operators – pari-mutuels such as dog tracks, horse racing and jai alai, and the Seminole Tribe.

The bill as drafted requires those awarded a destination resort license to invest $2 billion, but taxes the operators at 10 percent. Pari-mutuels are currently taxed at 35 percent and fear being pushed out of business by the glitzier casino resorts.

Adding to the opposition of the bill is the powerful Florida Chamber of Commerce, the Walt Disney Co. and the Beacon Council, Miami-Dade County’s economic development group. They think the casinos will take away from conventions in Central Florida, tarnish the “family-friendly” image that area has and suck money from South Florida businesses.