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Vegas Casino Operators Pitch Florida's Cash-Strapped Lawmakers but Get No Positive Signals

Posted by Alex Finkelstein 03/15/10 8:00 AM EST

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Las Vegas Sands Execs Ready to Erect 4 to 6 Casinos at $2B Each - but there's a catch:
Promoters Want to Limit Competition to 4 Casinos.
Nevada Operators Want to Pay under-10% Tax Rate, not 35% Rate State Proposes.
Sands Group Tells Lawmakers to Limit Casino Market to 6 Sites and Charge a $100M Development Fee for Each Site.
Vegas Execs Focus on Miami, Fort Lauderdale and Tampa but not Orlando.
Seminole Tribe Books $1.9B in Gross Profit for 2008 - 2009 Numbers Still Being Crunched.
Florida Trying to Button Down 3-Year Deal With Tribe That Would Give State $150M Take From Seminole Earnings.
Florida Already Has Escrowed $287M in Previous Revenue-Sharing Deal With Seminoles.

Bill Galvano

(TALLAHASSEE, FL) -- Hello, Mickey and Minnie - you can continue to sleep tight for probably another 100 years. Florida isn't ready to allow Las Vegas-style casino gambling in the state just yet.

It hasn't been for 444 years, not since St. Augustine was founded in 1566.

However, lawmakers, aware of Florida's shrinking budget and glaring revenue shortfalls, at least are listening to new proposals.

"We don't want to overturn a century history of being a family friendly Mickey Mouse state for a Vegas-style state," said Rep. Bill Galvano (R-Bradenton), chairman of the House Gambling Committee.

But Galvano said he and his colleague would listen to all new casino-style gambling proposals. He said he hoped the Las Vegas presentation would stimulate further discussion among his colleagues on legalized gambling.

The legislators acknowledged as much publicly at the start of their 60-day law-making session on Thursday, March 11.

They heard casino development proposals from executives of the international Las Vegas Sands Corp. (NYSE: LVS).

The Vegas group told the lawmakers they are eyeing Miami, Fort Lauderdale and Tampa as possible sites in the U.S. Japan in Asia: and other European sites. The Sands already has casinos in China and Singapore.

Vegas execs did not mention Orlando as a specific site.

"We want to build something so spectacular that the draw would be from South America and Europe," Sands vice president of government relations Andrew Abboud said. "We don't want to recalculate money just here in Florida."

Abboud said his company is ready to invest at least $8 billion to $12 billion to construct four to six casinos at different state sites.

But in doing so, Abboud's associates would want a guarantee from Florida lawmakers that they would limit competition to four other casino operators.

The Sands group also didn't plan to pay the $35 percent tax rate lawmakers are planning to assess on the state's existing 27 pari-mutuel tracks and frontons.

The group also suggested to lawmakers they should limit any new casino market in the state to six sites and set the development fee at $100 million each.

Ron Book, a lobbyist for several pari-mutuel operations, wasn't impressed with the Vegas presentation.

Gov. Charlie Crist

"It's all a dog and pony show," Book told the Associated Press. "Everything that's going on in there is a distraction. The House is never going to allow this kind of gambling expansion in Florida."

The Vegas proposal comes as Gov. Charlie Crist and his cabinet once again tries to sit down with Seminole Tribe chiefs and hammer out a three-year revenue-sharing deal that would provide the state with at least $150 million a year.

Florida already has received and escrowed a total $287 million from the Tribe's operations of slot machines and card games at its seven casinos - even without a valid contract with the state.

The Seminoles netted $1.9 billion in 2008, a 19 percent jump in revenue growth from 1987. Numbers for 2009 are still being audited.

Florida's existing gambling industry revolves around horse racing and poker at the Tribe's casinos. Blackjack and dice games, such as craps and roulette, are banned.

Ellyn Bogdanoff

So are slot machines except in Broward and Miami-Dade counties where South Florida voters previously authorized them in local referendums.

That's the approach she would take, Rep. Ellyn Bogdanoff (R-Fort Lauderdale) said at the Tallahassee gathering - if it ever came to a definitive vote on casino-style gambling in Florida.

"Voters in each county should be given the opportunity to vote yes or no" on the issue, she said.

"There's no question, Florida could create an international gambling market," the Fort Lauderdale Sun-Sentinel quoted her as saying after the session.

Jim Allen

Amy Baker, an economist in the Florida Office of Economic and Demographic Research, told the lawmakers the state could authorize eight resort casinos that would generate an estimated $2.3 billion in upfront licensing fees - a move that would hugely help Florida's current deflated revenue basket.

But there was a Catch-22 situation with that concept, Baker conceded.

The state would have to wait at least three years to see the cash from the permit fees, while the casinos were under construction - and at the same time would lose the revenue-sharing money from the Seminoles.

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