Politics

Critics Question Genting, Gulfstream Deal

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(Photo Credit: Roslan Rahman/AFP/Getty Images)

(Photo Credit: Roslan Rahman/AFP/Getty Images)

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TALLAHASSEE (CBSMiami/News Service of Florida) — Gambling giant Genting, Gulfstream Park and the horse industry plan to bring slot-machines to Biscayne Bay, but the entities still have challenges ahead before the gaming can begin.

Under a proposal, Resorts World Omni, a division of Malaysian-based Genting Group, would operate 2,000 slot machines and a poker room at a hotel on Biscayne Bay. The slots machine license would be associated with a permit owned by a non-profit linked to Gulfstream, where the horse races would continue to run.

But the deal, first reported by The News Service of Florida on Tuesday, would also cost the state a portion of the gambling revenues it receives from the Seminole Indians, according to one of the crafters of the agreement with the tribe.

“Notwithstanding the legal hurdles to accomplish what’s being proposed, if that were to occur that would impact the exclusivity provisions of the compact in Dade and Broward,” said state Sen. Bill Galvano, R-Bradenton, who helped write the 2009 agreement with the Seminoles.

The agreement allows the tribe to have Las Vegas-style slot machines at each of its seven locations and gives it the exclusive rights to run banked card games such as blackjack at five facilities. In exchange, the tribe agreed to pay the state $1 billion over five years. The card-game portion of the deal, called a compact, expires in 2015 unless lawmakers and the governor renew it.

The agreement allows the Seminoles to stop paying if slot machines exist anywhere outside of Broward or Miami-Dade counties, except on tribal lands. But the compact also allows the tribe to reduce its payments to the state if slot machines are allowed at any facilities that weren’t already operating in Broward or Miami-Dade, except for Hialeah Race Track, when the deal was inked in 2010.

Under the compact, the tribe would have to show that revenues at its Hard Rock Hotel & Casino in Broward declined after the new slots began operating. Then, the tribe could cut its payments to the state by half of the amount the Seminoles pay based on revenues earned at the Broward casino, Galvano said. The amount at stake is estimated to be at least $40 million, based on an analysis of revenue projections by state economists.

But Resorts World lobbyist Brian Ballard said lawmakers shouldn’t worry about the potential fiscal hit.

“Genting is prepared to work with the state to make sure the state suffers no impact,” Ballard said. “This is manageable and we want to work with the state to figure out the most equitable outcome.”

Ballard also said the state would be wise to hedge its bets by expanding its sources of gambling revenue.

“I would argue that having more than one large payer in South Florida is probably good for the people of Florida. It lowers risk. I wouldn’t want to have one client as a law firm or lobbying firm because if the market changes for that client, you could have a real bad day,” he said.

But opening a casino in downtown Miami would be a disaster, said Sen. Gwen Margolis, a Miami Democrat who sent a letter to Senate President Don Gaetz on Thursday objecting to the plan.

Margolis noted that the Resorts World property, in the center of her Senate district, is situated within two blocks of two museums, two performing arts centers and an arena in an already-congested area of Miami.

“It’s outrageous,” Margolis told the News Service.

Separating slot machine operations from pari-mutuel activities like horse and dog racing would set a dangerous precedent, Margolis warned.

“When we gave the ability to have slot machines to the pari-mutuels, it was because they complained they were hurting. Now everybody wants to have a different kind of deal. And the result of it is opening casinos all over the place by moving slot machines to some other area. That’s something that will get out of control. You can’t allow that to happen,” she said.

Genting has “a ton of gall” for coming to the Legislature with the current plan after lawmakers rejected proposals for casino-style resorts in South Florida two years ago, said John Sowinski, president of No Casinos, a group that has long fought against expanded gambling.

And, Sowinski said, Genting is “essentially thumbing their noses at the voters” who approved a 2006 constitutional amendment that opened the door for slots at tracks and frontons in Miami-Dade and Broward counties. Voters believed all the gambling activities would be under the same roof, Sowinski said.

“It’s sort of a give an inch, take a mile routine. This is not what voters approved. Not only do we oppose it but we think it’s an affront to the voters of Florida,” he said.

The News Service of Florida reporter Dara Kam contributed to this report.

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