Court ruling allows legislators to expand casino gaming in South Florida

A Tallahassee court cleared the way Thursday for legislators to expand gambling in South Florida without a referendum vote, while two key sponsors of a casino bill finished drafting their proposal to allow three resort casinos to operate in Miami-Dade and Broward counties.

The ruling by First District Court of Appeals Judge Marguerite H. Davis was a victory for Hialeah Racetrack and serves as a promising omen for the push by the world’s largest gaming companies to bring resort casinos to Florida.

Davis affirmed a lower court decision, saying the law passed by the Legislature allowing Hialeah Racetrack to offer slot machines was constitutional. She rejected the argument by Flagler Gaming Centers and Calder Race Course, which argued that when voters approved slot machines in Miami-Dade and Broward in 2005 and 2008, they intended to limit the number of permits to the seven pari-mutuels that were currently operating.  He said voters did not intend to give the entities “a constitutionally-protected monopoly over slot machine gaming in the state.”

The ruling was hailed by Representative Erik Fresen and Senator Ellyn Bogdanoff, who want legislators to approve their proposal to build three resort casinos in Miami Dade and Broward Counties without first having to seek voter approval. They have filed identical proposals to invite companies to submit bids for three casino licenses to a newly-created Florida Gaming Commission. Each of the bidders would be required to show that they will invest a minimum of us$ 2 billion in capital in each facility.

This gambling commission, which itself will be carefully vetted, will evaluate the bids and select the winners based on a scoring scale that gives preferences to proposals that create the most jobs and complete work the earliest, Bogdanoff said.

The bills also require that the multi-billion dollar resorts give gambling a low profile. Each resort is restricted to using no more than 10 percent of the total square footage for the Las Vegas-style games, such as slot machines, roulette wheels and craps tables. The gambling space also must be segregated from other attractions — so that a visitor can attend the resort without having to see the gambling machines, Fresen said.

The bills will transfer all the gambling and licensing duties from the Department of Business and Professional Regulation to the gambling commission. Only the state-run lottery program would continue to be run by another agency. The structure of the new gambling board is patterned after the Nevada and New Jersey regulatory gaming commissions, the sponsors said.

The proposed bill would also require strict background checks for all casino employees and vigorous financial screening for casino owners and partners, Bogdanoff said.

The 90-plus-page bill will give casinos the lowest tax rate yet for any gambling operation in Florida: 10 percent on net revenues. That is certain to draw the ire of the seven pari-mutuels with slot machine licenses in South Florida. They currently pay a 35v percent tax rate on their slots games and have made it clear they want parity, as well as the opportunity to bid for the resort casino licenses.

The proposed legislation has no language addressing pari-mutuels, the horse and dog tracks and jai alai frontons that now operate across the state. It also contains no provisions to regulate or outlaw the so-called internet cafes, maquinitas and sweepstakes gambling halls that have sprung up at more than 1,000 locations across the state because of a loophole in the sweepstakes law.