TALLAHASSEE — Auctioning off eight licenses to operate Las Vegas-style casinos could produce $2.3 billion in upfront revenue for Florida — more than triple the state’s cut under the next most lucrative proposal, the Legislature’s top economist told a House gambling panel Thursday.
But the payoff wouldn’t be for four years and the approach would require statutory and possible constitutional revisions in what would be a significant expansion of gambling in Florida. That’s the message economist Amy Baker told the House Select Committee on Seminole Gaming Compact Review, which is spearheading that chamber’s efforts to craft a deal.
Meanwhile, representatives from Las Vegas Sands told the panel they would consider building an integrated convention, hotel, casino, retail complex in Florida but not unless they were taxed at a considerably lower rate than the 50 percent non-Indian venues now pay.
The Sands would also need some form of limited exclusivity in order to justify the $2 billion investment a mega-resort destination would require. The House panel, known for its conservatism when it comes to expanding gambling in Florida, appeared only marginally enthused about either scenario.
“I think the time has come for Florida to step back… and figure where it’s going to go,” said Rep. Bill Galvano, R-Bradenton and chairman of the committee.
The Seminole Tribe runs seven casinos in Florida, including a facility in Immokalee. The tribe wants the exclusive right to offer black jack and other banked card games. In exchange it would give the state a cut of the profits.
Negotiators, however, have been unable to cement a deal, but the tribe has proceeded to open the card games at its venues, citing a compact made with Gov. Charlie Crist that was rejected by the Legislature.
With a gambling deal with the Tribe so far eluding them, House lawmakers asked Baker, the coordinator for the Office of Economic and Demographic Research, to provide an analysis of expanding the number of casinos to offset the loss of revenue created if a deal falls through between the Seminoles and the state.
Given a set of assumptions and factors, including demographics and geographical exclusivity, Baker said Thursday that up to eight additional casinos could easily be absorbed without substantially reducing revenues at existing Indian casinos and non-Indian venues.
Under the scenario, the state would auction off up to eight gambling licenses, which would provide exclusive rights to gambling within a particular area. Using a conservative estimate, Baker said the state could expect to receive about $286 million per license if a full range of gambling was available. A more limited license would generate about $192 million per license.
Going forward, the state would receive tax revenues of up to $171 million a year under a House crafted plan. An early version hammered out between the tribe and governor would generate about $250 million a year.
“Florida would generate significantly more state revenue than the proposed state compact would generate,” Baker said.
Following Baker’s presentation, representatives for Sands, said a Sands Florida would not be in the cards with the hefty license fees if the state taxed them at 35 percent, a proposal put forward by non-Indian venues including the Naples/Fort Myers Greyhound track.
Instead, a $100 million license for up to four venues would be more appropriate and a tax rate closer to 10 percent. In exchange for the lower rate, Sands would offer a tourist and convention destination that would employ more workers and generate more revenue.
“We’re not here to offer a short-term fix,” Sands vice president Andy Abboud told the panel. “We’re here for the long term.”