TALLAHASSEE -- With some of the top contenders in this week's
Kentucky Derby, Florida's thoroughbred industry may have something to
celebrate -- but in the Capitol it seems to be losing the fight for money that
would be generated from slot machines in Broward County.
And the industry says it needs that money.
"Wouldn't that be ironic? We win the Derby and we lose the thoroughbred
industry," said Richard Hancock, executive vice president of the Florida
Thoroughbred Breeders and Owners Association.
The pari-mutuel industry spent millions to promote the constitutional
amendment giving people in Broward and Miami-Dade counties the right to
put slot machines in their race tracks and jai-alai frontons, which only
Broward County ultimately approved. It was pitched as a way to raise
money for schools across the state.
Now breeders and owners of race horses and greyhounds want lawmakers
to guarantee in law that they will get some of the money that isn't spent on
education -- pitting them against track owners, who would otherwise
receive the money.
An even bigger disagreement over how to tax slots and what k ind of
machines to allow looms between the Senate and House. With just days
left in the two-month session, the outlook that any bill regulating slot
machines will pass is itself in doubt. Senate President Tom Lee, RBrandon,
last week said he thought chances were less than 50 percent.
But there is one thing the bills pending in both chambers have in common:
Neither deals with purses or breeder incentives.
"I think it will have to wait til next year," said Jones, RSeminole.
Supporters say Florida's thoroughbred industry is worth fighting for.
Several hundred horse farms covering about 60,000 acres in Marion
County make it a significant -- and beautiful -- agricultural area. The farms,
training centers, equipment and horses add up to an investment of about
$3 billion and nearly 10,000 jobs.
"When we got behind the campaign it was with the understanding that
there would be a fair split," Hancock said.
The South Florida dog-track executive who spearheaded the petition drive
has a different explanation for tracks' opposition to a purse provision.
The public was only promised money for schools, said Daniel Adkins with
Hollywood Greyhound Track.
TALLAHASSEE - A nervous hush came over a room full of gaming industry lobbyists Friday as a Senate committee did the unexpected when it took up the
slots-machine bill: It voted to bar Broward's four parimutuels from remaining inthe horse race, dog race or jai alai business if they to choose to offer slot
machines.
The amendment by Sen. Dan Webster, chairman of the Senate Judiciary
Committee, was condemned by parimutuel lobbyists as ''devastating'' to their
efforts to resuscitate their ailing businesses by adding slot machines to their
gambling menus. To Webster it was a simple question of choice.
But the industry worries were short-lived: After watching the faces of the powerful
industry hired guns turn ashen at the 5-3 vote, the senator who cast the pivotal
vote reversed himself, killing the amendment on a tie vote.
The industry deflected several other unfriendly amendments, and the bill left the
committee virtually unscathed.
In the House, the story was different. The Fiscal Council approved a bill
that imposed a 55-percent tax rate on slot machine revenues, one of the
highest in the nation, and stripped away a provision that would allow
parimutuels to upgrade their slot machines from bingo-style to the higherstakes
Las Vegas style if the Indian casinos start offering them.
It was another day of fragile progress for the gambling industry, as lawmakers
attempt to regulate slot machines in Broward County by a July deadline.
Legislators must balance their ideological objections to expanding gambling with
their practical desire to capture tax revenues from the games.
''People are for gambling and it's been shown by this Legislature, they're for
expanding gambling,'' Webster said, clearly frustrated that his efforts to restrict
the industry didn't work.
Sen. Bill Posey, a Rockledge Republican, was the swing vote on the Senate
committee. He said he reversed himself because the proposal was drafted poorly
and could force the industry to forever surrender its parimutuel licenses if they
switch to slot machines, rather than allow them to one day change their minds.
While the Senate is perceived to be more friendly to the slots industry than the
House, Posey did succeed in persuading the committee to ban ATM machines
from all slot facilities.
In the House, leaders had completely rewritten their slots bill, making it farther
apart from the Senate on many key elements, such as the tax rate.
The House's 55-percent tax rate is supported by Gov. Jeb Bush but is much
higher than the tiered tax rate of 30-35 percent in the Senate.
Rep. Frank Attkisson, a Kissimmee Republican who is sponsoring the House bill,
defended the rate as not only reasonable but ample enough for the industry to
earn an estimated $80 million a year after taxes.
''Are they going to turn down $70 million to $80 million a year?'' Attkisson asked.
``I don't think so. I think they'll be racing to the bank.''
The sponsor of the Senate bill, Sen. Dennis Jones, R-Seminole, warned that too
high a tax rate will diminish the ability of the industry to reinvest in its business,
reduce its profits and shrink the amount the state collects.
Webster said, however, that while he is resigned to the fact that slots are here to
stay, he thinks the Senate's tax rate is too low. He has proposed an amendment
to adopt a tax rate of 40-50 percent, depending upon the amount of money a
parimutuel brings in. He thinks the full Senate will accept it.
The House bill eliminates a proposal to give the city of Hollywood $1,500 per
machine to offset the impact of the industry on its community. A similar measure
was defeated Friday in the Senate.
But both House and Senate committees agreed to add a provision that gives the
Broward School District $500 per machine if it can prove to the state Board of
Education that the emergence of slot machines has had an adverse impact on
the school system.
The House and Senate bills also include a provision that
would require the greyhound tracks to report dog injuries and fatalities and
remove a provision that requires dog tracks to operate a race schedule of
350 days a year, allowing the Hollywood Greyhound Track to reduce its
racing schedule and still operate slots year round.
That prompted Jack Cory, a lobbyist for the state's greyhound owners,
breeders and kennel operators, to blast the track owners as conducting a
bait-and-switch to voters.
''They were part of the track's shell game. They want to get out of
greyhound racing and into casinos,'' he said.
House plan would tax slot machines at 55 percent
By Jackie Hallifax
Associated Press
Saturday, April 23, 2005
TALLAHASSEE, Fla. - The proposed tax rate for slot machines in Broward
County jumped Friday to 55 percent as the House bill moved through its last
committee.
"We are responsible for not leaving a dime on the table," Rep. Frank Attkisson,
R-Kissimmee, told the House Fiscal Council before its unanimous vote.
Any tax revenue collected from slots is earmarked for schools around the state.
That was a part of the proposed constitutional amendment that voters approved
in November allowing slot machines in seven race tracks and jai-alai frontons in
Broward and Miami-Dade counties with local approval. Only Broward County
decided to allow the machines.
A competing Senate proposal, meanwhile, earmarked the taxes from slot
machines specifically for school construction and maintenance under an
amendment approved Friday in the Senate Judiciary Committee. That proposal
set the tax rate between 30 percent and 35 percent.
Sen. Daniel Webster, a gambling opponent, tried to force the Broward County
pari-mutuels to choose between having slots or their original businesses of horse
racing, dog racing and jai-alai. But the panel rejected his proposal.
Webster, committee chairman, also proposed a higher tax rate but decided to
delay a vote on the idea. The committee voted 7-1 for the legislation, with
Webster, R-Winter Garden, casting the dissenting vote.
The pari-mutuel industry supports the Senate legislation and opposes to the
House bill, saying the 55 percent tax rate too high.
Allan Solomon, an executive with Pompano Park harness race track, told
lawmakers the bill didn't have "any redeeming features."
A tax rate of 30 percent would allow the industry to invest in attractive
entertainment complexes that would generate the most taxes for the state,
according to Solomon and Daniel Adkins, the pari-mutuel executive who led the
petition drive amend the Florida Constitution to allow slots.
"The tax rate - 55 percent - is not workable," said Adkins, with Hollywood
Greyhound Track.
But he said the Senate bill "has a very good business plan."
The pari-mutuel industry has advocated a 30 percent tax rate; the House
legislation originally provided for a sliding scale ranging from 35 percent to 45
percent, depending on how many machines a facility installs.
Attkisson, R-Kissimmee, said 55 percent was reasonable and prudent and
predicted it would give the four pari-mutuels a profit of at least $70 million.
"Are they going to turn down $70 million or $480 million a year under this
proposal?" Attkisson asked. "I don't think so. I think they're going to be racing to
the bank."
The tax rate in the Senate bill (CS-SB 1174) would tax slots on a scale ranging
from 30 percent on revenue under $100 million, 32.5 percent on revenue
between $100 million and $200 million and 35 percent above $200 million.
Both the House and the Senate committees also approved amendments
that would require record-keeping of dog injuries and fatalities in the
greyhound industry.
Jack Cory, a lobbyist for the state's greyhound owners, breeders and
kennel operators, blasted the idea as an attack on the industry.
But Rep. Holly Benson, the Pensacola Republican who sponsored the
amendment, said it was just to get accurate data. "This is a puppy-lover's
amendment," she said.