HALLANDALE BEACH, FL. May 23, 2021 – One day after it was reported that Florida Gov. Ron DeSantis signed major gambling legislation in a compact with the Seminole Tribe of Florida, we noted a local television ad that appeared in prime time on a major network.
Ostensibly, the spot was to promote the Seminoles’ Hard Rock Hotel and Casino and inform Floridians of their expansion plans that would enrich the state when three more casino hotels are constructed on the reservation’s Hollywood property, 15 clicks northwest of Gulfstream Park.
The Florida tourism industry is hoping that Vegas Strip-Light will strike at the heart of Atlantic City visitors on this side of the country.
The spot was not a hard-sell, one with a PSA-like vibe, when it became apparent halfway through there would be an homage with appropriate bowing and scraping, thanking the Governor for his vision with a photo-opportunity signing the compact that subsequently would gain legislative approval.
DeSantis was signing a 30-year compact that gave the Seminoles control over future sports betting plus granting permission to offer craps and roulette at all its casino locations.
Together with the decoupling of casinos from existing parimutuel operations, the deal stroke a significant blow to the fortunes of both Florida Thoroughbred tracks, Gulfstream Park and Tampa Bay Downs.
As a result of cost savings from the secession of operations of their parimutuel rivals and the granting of sports betting exclusivity to the tribe, the state’s Thoroughbred tracks will face added competition from rivals free of high operational costs that now can go toward on advertising and promotion.
Before Florida legislators would approve DeSantis’ bill–which still need approval from the U.S. Interior Department–it needed to clear another hurdle; that the Seminoles would not object to rival casinos constructed outside a 15-mile radius from their Hollywood property.
By comparison, the Seminole Hard Rock Casino in Tampa has a buffer zone of 100 miles.
Two locations were at the heart of this. One called for a casino at the legendary Fontainebleau Resort in Miami Beach owned by developer Jeffrey Soffer, who also operates the Big Easy Casino, the former Hollywood dog track little more than a mile up the road from Gulfstream.
With dog racing outlawed in 2020, Soffer already was operating a decoupled gaming enterprise.
The other property considered as a possible future casino site is the Doral Golf Resort, which lays barely outside the 15-mile zone. That property, owned by the former POTUS, had been losing significant amounts of money, even in the pre-pandemic years.
In another coincidence, and shortly before expanded gambling negotiations began making local headlines, Eric Trump emailed the Washington Post:
“Many people consider Trump Doral to be unmatched from a gaming perspective. At 700 acres, properties just don’t exist of that size and quality in South Florida, let alone in the heart of Miami.”
The possibility of a Doral Casino has roots deep in the heart of Florida politics. In a hotly contested gubernatorial campaign in 2018, DeSantis emerged a narrow winner after receiving a huge endorsement from the 45th President.
Weeks ago, according to South Florida Sun-Sentinel reports, the former guy endorsed State Senate Leader Wilton Simpson for agriculture commissioner before Simpson announced that he was a candidate for that position. Simpson was a major booster of expanded gaming.
There are remaining hurdles to clear. Bi-partisan opposition from legislators to legal sports betting, as well as the ability to move existing casino operations to more favorable locations, is a matter of law to be decided by voters via referendum as provided by the state’s constitution.
Opposition to the expansion of gambling in the state also is coming from various religious groups and the conservative Florida Family Policy Council. And there are the objections of the Disney Company who have economic concerns associated with competition for visiting tourists.
The Seminoles are expected to win legal challenges to their sports wagering exclusivity, arguing that the servers needed to conduct online sports betting exist inside the reservation–that right guaranteed by Amendment 3 of the Federal Indian Gaming Regulatory Act of 2018.
Other wagering venues, including tracks and jai alai frontons, will be allowed to offer sports betting providing they share revenue with the Seminoles on a 60-40 basis.
Presently, Gulfstream Park is in no position to absorb shortfall from outside revenue. The contract it has with Churchill Downs Inc, owners of Calder which no longer needs to host jai alai matches due to decoupling, expires July 31. The Calder revenue has accounted for approximately $9-million annually for purses.
That money has helped make year-round racing possible. What this will mean to future of year-round racing is unknown.
Gulfstream diverts $6 million from its on-track slots revenue to purses which brings to mind another inequity: The Seminoles’ tax rate on slots is 12.5%; Gulfstream’s rate is 35%.
Not only does decoupling hurt Gulfstream with respect to year-round racing but makes it increasingly difficult to compete with other winter venues for quality horse flesh that otherwise could winter in New Orleans or Hot Springs.
Slot machines and card rooms help racing, obviously, but are no match for craps tables and roulette wheels amid glitzy surroundings.