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Recap of Florida Senate Gaming Committee Hearing–September 23, 2013

G. Herb Sheheane, FHBPA Lobbyist
The Florida Senate Gaming Committee held its first meeting of the 2014 Legislative Session on September 23, 2013.  Legislators discussed the Spectrum Gaming Survey, the goal of which is to provide information that will guide them in making laws and policy decisions about Florida’s future pari-mutuel and gaming market.  That includes all types of horse racing.
The Florida Senate Gaming Committee will meet next on October 7 in Tallahassee.  On that day, Senate Gaming Committee Staff Director John Guthrie will present and explain Part Two of the Spectrum Gaming Survey report due October 1.  Ultimately, the Florida Legislature will decide what to recommend and tee up for statutory changes where appropriate.
At yesterday’s Senate Gaming Committee meeting, Chairman Garrett Richter introduced Mary Cramer, the Committee’s new chief attorney.
The Spectrum public hearings schedule was discussed.
During the public hearings on the Spectrum study(the first of which is on October 23 in Coconut Creek, etc.), short presentations are being  requested in order to allow Senators time to ask questions.
Senator Gwen Margolis said she was concerned with the location of public hearings.
Senator Maria Sachs suggested an additional meeting might be scheduled that would “recognize areas of Florida that have more gambling.”
Senator Jack Latvala said he felt the Committee staff did a good job of striking a compromise among the various gaming and pari-mutuel factions.
Mr. Guthrie reviewed “Part 1” of the Spectrum Gaming Study at a 50,000-ft level.
He said that “Part 2” due on October 1 will actually comprise 2 reports, not just one.  Part 2 is going to be far more complex than Part 1 and provide extensive statistical analysis.
Senator Margolis said she expected in Part 1 to see a comparative analysis of others states’ gaming policy.
In response to legislators’ questions, Mr. Guthrie said the Spectrum report does not make recommendations or delve into the budgeting process.
Some points covered by Mr. Guthrie in his presentation:

  • Evolution of Florida’s gambling industries
  • Florida’s different regulatory schemes
  • The Spectrum study is balanced and unbiased
  • Gaming is popular in America
  • Gaming has positive and negative impacts
  • Gaming industries are “uniquely intertwined” with government
  • The permission to offer gaming (i.e a license or permit) is a “privilege”
  • Florida’s convoluted gambling laws have allowed an expansion that the Legislature may never have intended.
  • Orlando’s strength in attracting business travelers is happening without the “antithetical” expansion of gambling
  • The Spectrum study provides a “treasure trove” of scholarly and historical facts
  • While casino profits are on the rise, pari-mutuels (“for the most part,” he said)

Notably, Mr. Guthrie separated horse racing from other pari-mutuels when talking about the Florida gambling market.  Horse racing is the backbone of Florida pari-mutuels, accounting for 61% of total pari-mutuel handle, he said.   It produces $10.6 million in operating profit.
Regulation is most effective when it includes a comprehensive licensing process, he added, but “regulators can become cheerleaders for those they govern . . . Over time, (regulators) become closer to the entities they regulate.”
Mr. Guthrie says the Spectrum Study Part 1 makes suggestions on best practices in governance and regulation.
It also discusses direct and indirect costs to the state and local governments caused by gaming entities, such as schools, law enforcement.
Statistics show that the existence of casinos does cause an increase in personal bankruptcy rates.  Interestingly, rural counties are likely to have an increase in fatal alcohol-related traffic accidents, whereas urban areas show a decrease.
Casinos rank second to landfills as the “most opposed” type of land use for communities, the study said.
Part 2a of the Spectrum study will give statistics on the economic effects of gaming.  Part 2b will give a quantitative estimated impact of the changes with casinos.
The proposed scenarios to be evaluated by Part 2b are:
Assessment of potential changes and economic effects.

  1. The analysis shall provide an assessment of possible changes in the gaming industry. Scenarios to be evaluated include:
  2. Renewal of the Seminole Tribe’s exclusive authorization to conduct banked card games on Indian lands, as defined in the Indian Gaming Regulatory Act.
  3. Granting the Seminole Tribe exclusive authorization to offer table games on Indian lands, as defined in the Indian Gaming Regulatory Act.
  4. Regulating, prohibiting, restricting, and/or taxing simulated casino-style gambling at Internet sweepstakes cafes, arcade amusement centers, or truck stops.
  5. Modifying or repealing live racing requirements for pari-mutuel facilities, including evaluation of impacts on purses and awards.
  6. Thoroughbred racing
  7. Harness racing

iii. Quarter horse racing

  1. Greyhound racing
  2. Jai alai
  3. Changing tax rates for Class III games at pari-mutuel facilities
  4. Adjusting restrictions on the number and operation of slot machines at pari-mutuel facilities in Miami-Dade and Broward counties
  5. Authorizing pari-mutuel facilities in counties other than Miami-Dade and Broward to offer slot machines
  6. Authorizing pari-mutuel facilities to conduct table games or other Class III games
  7. Authorizing a limited number of casino/resort complexes in Miami-Dade and/or Broward counties
  8. Authorizing a limited number of casino/resort complexes around the State.

The results will be run through a computer economic model called “REMY” (stands for regional economic models) to produce a “best estimate” of what each of the above scenarios would produce.
Reading the final report will be “like drinking from a fire hose,” Chairman Garrett Richter said.  “Where we go will be determined by the will of this committee and the entire Senate.”
“The multiple scenarios are trying to get a wide variety of outcomes so we have as much information as possible to rely on,” Chairman Richter explained.
Senators discussed that the information will be made public.  Then, in November 2013, Spectrum representatives will be on hand to answer questions from the Committee members and hold a “serious dialogue.”
Senator Latvala said he was compelled to express hope that at some point in time, the Committee can evaluation of Internet Café bill  implementation resulting in “unintended consequences” in the market, such as outlawing the “claw”  machines found at Chuck E Cheese and Wal-Mart.
Chairman Richter agreed the bill should be addressed.
Senator Andy Gardiner asked whether the Committee can get more details on the regulatory structure of other states, specifically the Gaming Commission concept.
Mr. Guthrie said that Spectrum will be under contract until the end of the 2014 Session specifically to answer such questions.
Senator Margolis asked about the taxation of out-of-state gambling dollars, however, Chairman Richter adjourned the meeting.
We look forward to seeing the horsemen on October 23!
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