Lots of speculation is circulating over what’s going on in Florida, the last big gambling market in North America.
From 2002 to 2012, campaign contributions from the industry increased by an estimated 500 percent, led by giving interests affiliated with Sheldon Adelson, Genting, and Florida’s gray market Internet café operations. Despite these efforts, no major changes have occurred in Florida’s approach to gaming. Florida continues to feel the brunt of industry criticisms regarding the state’s ability to regulate the industry only marginally better than the state’s ability to handle its elections. Over the years, the Florida Legislature has tasked six different state agencies with some level of gambling oversight, including five different agencies with law enforcement capabilities.
As the Florida Gaming Committees in its Legislature begin preparing for what will most certainly be a whirlwind over the next 18 months, here is a look at the key players to keep an eye on:
THE SEMINOLE TRIBE: It has demonstrated credibility as an outstanding operator and a formidable political force. All of that, in addition to a guaranteed $1 billion in revenue sharing with the state between 2010-15, makes the Seminole Tribe and its Hard Rock brand the one to watch.
FLORIDA PARIMUTUELS: Florida has a long and rich parimutuel history boasting more operating parimutuel facilities than any other state. Many of these facilities have been operating for more than 70 years and are an important part of their local communities. Many of the cardrooms at these parimutuels are humming along at a record pace and with a little luck at the State Capitol, new gaming options might be on the menu in the not-so-distant future.
NON-GAMING INTERESTS: The Florida Chamber of Commerce, the Florida Restaurant and Lodging Association and Walt Disney World are incredibly well-positioned in Florida’s capital. They will be relevant in any gambling legislation to ensure no cannibalization of their businesses occurs as a result of a successful piece of legislation.
GAMING OUTSIDERS: Policymakers are poised to clean up what Florida has and maximize the revenues from its industry mix. Those from outside of the state who don’t have any hard holdings in Florida will continue to have a difficult time breaking through with their message of free-standing casino licenses. All of the aforementioned interests are aligned against new entrants out of concern for market cannibalization. In addition, past infighting among the casino companies and failed efforts in prior years make for a considerable headwind for these groups.
Capital markets are frozen to gambling deals in Florida that do not involve the Seminole tribe due to the all of the uncertainties of the market, the bankruptcies of two South Florida pari-mutuel casinos and anemic performance from the others. A further testament to the uncertainty for operators in Florida can be seen in Boyd Gaming’s recent decision to sell—at a loss—its casino site, Dania Jai Alai, which it purchased in 2007 for $150 million. Boyd spent millions in licensing fees to protect its slot machine entitlements but never moved forward with a casino operation.
The $64,000 question now for Florida is, can it get its act together and make lemonade from the basket of lemons that is the Florida gambling marketplace? Leading the charge in this effort are two seasoned politicians. Sen. Garrett Richter, the president pro tempore of the Florida Senate, and Rep. Rob Schenk, the powerful rules chairman of the Florida House of Representatives, have been tasked with the herculean task of cleaning up the mess and charting a course for Florida’s future as a formidable gambling state.
In Florida’s executive branch, Gov. Rick Scott has staked out his clear position on any gambling legislation. He has repeatedly stated that Florida’s budget will not be balanced by a large infusion of speculative revenue from the gambling industry. In addition, he has expressed his desire to have communities decide for themselves whether gambling is an appropriate addition to the local economy.