The Real Deal Miami

Economy puts long odds on casino construction

By Mike Seemuth | April 20, 2009 03:19PM

Miami Dade casino development plans — and the new construction they would entail — remain unresolved as a high-stakes legal tussle continues between the Seminole Indian tribe and state-licensed operators of horse tracks, greyhound tracks and jai alai frontons.
 
The operator of Flagler Greyhound Track in Miami, for example, recently completed demolition of a 40,000-square-foot theatre for simulcast dog races to make way for a new casino facility to house 700 video slot machines, but local operators say their expansion plans face rough odds.
 
Flagler and other pari-mutuel gambling facilities — places where bettors wager against each other, usually on races or games — in Miami-Dade County are permitted to install up to 2,000 slot machines each. Miami-Dade voters approved a local referendum to permit slot machines at pari-mutuels in January 2008. Voters in neighboring Broward County did so in 2005.
 
But making those additions pay off “all depends on how the [Florida] Legislature acts,” said Izzy Havenick, vice president of a family-owned company headed by his mother that runs Flagler Greyhound Track.
 
Havenick said pari-mutuel operators need legislative relief from “untaxed competition” that Seminole-owned casinos pose and from an “onerous” 50 percent state tax on slot-machine receipts.
 
The Seminole Tribe of Florida has emerged as a dominant player in South Florida’s gaming industry and has ambitious plans to enlarge its casino business. If the Florida Legislature ratifies the tribe’s far-reaching agreement, or “compact,” with the state government, the Seminoles plan to expand their 130,000-square-foot casino at the Seminole Hard Rock Casino & Hotel in Hollywood and other casino facilities around the state. It would be much needed construction at a time when that pillar of the state economy has crumbled, but critics say it tilts the odds against non-tribal gambling.
 
Signed in 2007 by Gov. Charlie Crist, the compact between the state and the Seminoles would give the tribe the exclusive right to offer blackjack games in card rooms, among other concessions, in exchange for a share of casino revenues. In July 2008, the Florida Supreme Court ruled that the compact will have no force of law unless the Florida Legislature ratifies it. However, the tribe continues to offer blackjack at casinos in Hollywood and elsewhere.
 
With less than three weeks remaining in their current session, state legislators are still debating Seminole compact ratification and companion measures, such as a slot-machine tax reduction, to help pari-mutuels compete more effectively. 
 
The Senate and House of the Florida Legislature have taken divergent approaches to the issue, but they may reach a compromise in conference committee before the current legislative session concludes at the end of this month, said Sarah Bascom, spokeswoman for the South Florida Gaming Coalition, an advocacy group backed by pari-mutuel operators.
 
Casino facility development at pari-mutuels may get a regulatory lift this month, Bascom said, but “everything is contingent on where we go from here” with legislation.
 
Diversification is a common driving force at pari-mutuels that plan to add slot machines. Florida Gaming Corp., the owner of Miami Jai Alai, plans to modify a section of the 180,000-square-foot fronton to install an undetermined number of slot machines. Daniel Licciardi, general manager of Miami Jai Alai, said the redevelopment probably would be completed in the first half of next year. “It adds another form of entertainment,” he said. “Our goal is to have a full-fledged entertainment destination.”
 
But the economy may not cooperate. Consider the cautious outlook at Churchill Downs Inc. The Louisville, Kentucky-based company still plans to add new gambling options at Calder Race Track, its thoroughbred horse racing facility in northwest Miami-Dade County.
 
The company is preparing to build a single-level casino at Calder that would span 100,000 square feet or more and house an undetermined number of slot machines. Construction would be completed sometime next year, said Tom O’Donnell, president and general manager of Calder.
 
“Our slot casino development is still on schedule,” O’Donnell said. But he also warned that the economic recession could become an obstacle: “The economy is driving everything right now.”