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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Investors can't wait to gamble on Florida

30 July 2012

Maybe February was just a speed trap on Alligator Alley or a jack-knifed trailer on the Turnpike.

Florida's gambling proponents are not going to be deterred by a temporary slowdown and continue to push casino expansion in the southern part of the state, a market some analysts predict could exceed the Strip's annual $6 billion in gaming revenues.

South Florida provides the gaming industry another access into an affluent Latin American customer base, a market that is way too lucrative to give up on. Interest in South Florida's casino potential was so heated that representatives from every major Nevada-based casino company went there to investigate the possibilities.

Gaming supporters quickly began to regroup in early February, after skittish Florida lawmakers canceled a planned vote on a bill that could have placed three casinos in the Miami-Fort Lauderdale area.

Casino expansionists faced heated opposition and intense lobbying pressure from the family-friendly Florida giant Disney Corp., which abhors gambling, and the Seminole Indian Tribe, which operates six Florida casinos and abhors competition.

Recent signals, however, point to renewed interest in South Florida, a gaming jurisdiction that could easily jump to the forefront in casino development, far ahead of Ohio, Maryland and Massachusetts.

One group, "New Jobs and Revenue for Florida," is pushing a 2014 ballot referendum that would require a statewide vote to determine if casinos can be built in downtown Miami. According to campaign filings in the state, Malaysia-based Genting Group has to date spent $600,000 on the Political Action Committee.

To make the ballot in Florida, a measure must get signatures equal to 8 percent of voters who participated in the previous presidential election. Casino proponents will need some 600,000 signatures to get on a ballot. A constitutional amendment needs 60 percent of the vote to pass.

Union Gaming Group Managing Director Bill Lerner speculated the ballot measure would not only face opposition from Disney and the Seminoles, but also the Florida Restaurant and Lodging Association and existing pari-mutuel operators, such as Isle of Capri Casinos, which operates the race track casino at Pompano Park.

"If casino gaming ever comes to fruition in Miami it would be a negative for Isle," Lerner said. "That said, we think the state-operated racino operators would be given some concessions in the form of tax relief or table games."

Genting's campaign donation roughly equals 1.2 percent of the $500 million the company spent a year ago to assemble 30 acres of downtown Miami real estate with 800 feet fronting Biscayne Bay.

The idea was to build the ambitious $3.8 billion Resorts World Miami, with multiple hotels totaling 5,200 rooms, a large casino, 50 restaurants and other amenities.

February's nonaction by the Legislature scuttled Genting's initial plan, but last week the international gaming giant rolled out a more modest approach.

Preliminary plans call for a 500-room luxury hotel - less than 10 percent of the project's original size - two condominium towers and 100,000 square feet of retail and restaurants.

"We want to make sure we put a project forward that everybody is happy with and that adds value to the city of Miami," Resorts World Miami President Christian Goode told The Miami Herald.

That doesn't mean Resorts World Miami has been trashed - the modest start is designed to expand, someday, with a casino and much, much more.

Boyd Gaming Corp., meanwhile, reached a development agreement with Sunrise Sports & Entertainment, operator of the BankAtlantic Center and owner of the National Hockey League's Florida Panthers, to build a hotel-casino next to the arena if the state enacts casino legislation.

Back in February, the 90 acres of undeveloped land adjacent to the arena was viewed as one of the three potential casino sites in South Florida, and the sole location in Broward County.

BankAtlantic Center is accessible from major highways and is adjacent to the 2.3 million-square-foot Sawgrass Mills Mall, a megaoutlet center considered the state's second-largest tourist attraction after Disney World, bringing in some 30 million annual visitors.

Sunrise Sports & Entertainment President Michael Yormark said in February that he discussed the site with representatives from most of Nevada's casino industry leaders. Boyd announced the deal as part of its second-quarter earnings.

"The agreement ... positions us to take advantage of a potential development opportunity in an attractive location," Boyd Gaming CEO Keith Smith said.

Yormark said it could be years before a casino is built next to the arena. But Sunrise is willing to wait.

"We're going to work with the city, the county and, obviously, the state Legislature," Yormark told the South Florida Sun Sentinel. "It's the first step in a long process. But we're confident we have the right plan and the right strategy."

The Florida Legislature meets for 60-day annual regular sessions. Lawmakers are expected to see another casino expansion bill early next year.

Expect more traffic to slow the process.