Hope dwindled for Florida horsemen Friday after a revenue estimating conference on decoupling failed to address the economic impact of allowing many of the state's pari-mutuel facilities to close, while at the same time retaining their casino licenses.
State economist Amy Baker and a team from the Office of Economic and Demographic Research, Florida House, Senate, Department of Professional Regulation and the Governor's Office performed a fiscal review of the 2016 gaming bills before the House and Senate. It was an entirely one-dimensional exercise.
The Seminole Compact negotiated by Gov. Rick Scott is valued at $3.1 billion in payments to the state from the Seminole Tribe over seven years. It would mean a major expansion of gambling in Florida. If approved, it would bring craps and roulette to Seminole casinos in the state, and allow slot machines at Palm Beach Kennel Club and a new location in Miami-Dade County -- places slots were not previously allowed under other agreements.
Decoupling itself was not introduced, or wanted, by the Seminoles. In fact, the Seminole Tribe inadvertently offer horsemen the only real hope they have. Some lawmakers believe the Senate bill, in which the decoupling provisions are included, violates the intent of the Seminole compact because it also would allow six new locations to request approval to install slots. Two of them, in Gadsden County and Hamilton County, are where renegade Quarter Horse tracks, complete with illegal barrel racing, were operating.
The revenue team in session Friday was not charged with assessing the fiscal impact of the horse racing industry as a whole, or how decoupling will leave large pockets of rural, equestrian farmland 10 or even five years down the road.
Apparently not the Governor's Office nor the Senate nor the House leadership ever entertained the possibility that the horse racing industry could be more valuable to Florida than slots casinos and cardrooms. If they did, they never asked Baker's team to cost it out.
Neither was anything discussed Friday about pari-mutuel facilities, including race tracks, that accept local bets through their ADW -- via iPhone, outside the supervision of Florida's regulatory structure. It's an explicitly illegal practice in Florida (See Fl Statute 550.155) and Florida's longtime failure to collect the ADW tax costs the state millions of dollars in revenue and deflects money from the racing prize pool.
Word at the Capitol is, Rep. Matt Gaetz, R-Fort Walton Beach, will file an amendment to the House bill that will legalize ADWs. What will happen if someone is smart enough to realize the revenue from ADWs could more than make up for the Seminole Compact revenue? The Gaetz amendment would put the control of the proposed "purse pools" for Thoroughbred racing -- the Legislature's token gesture to the horse industry -- totally under Tampa Bay Downs.
Decoupling has been quietly under way for some time. At Calder Race Course, for example, owned by Churchill Downs, track owners began demolishing their horse stalls in early 2015 (see the photo on this page taken last March). If you go to Calder, go for the casino. If you want to watch a race there, it won't be easy with Calder's light schedule -- plus owners have torn down the grandstand. You will probably be directed to Gulfstream Park. And this has happened before the first vote on decoupling
United Florida Horsemen, leaders in what has become a lonely fight against decoupling, issued this statement after Friday's revenue estimating conference:
"As Florida economists discussed decoupling this morning, Florida horsemen remind our policymakers that real business, jobs and lives are at stake," the statement read. "No slot machine can contribute the broad economic value of a horse, from breeding and green space, to the labor intensity of horse care, to the money returned to Florida's economy through horse racing.
"In listening to today's projections of slot machine revenue riches, it's easy to forget that money still comes out of real people's pockets. But given that gambling is here to stay, it makes no sense to watch our citizens' money fly out the door to pad casinos' bottom lines instead of back into our economy through the many benefits of live horse racing."
Matt Hegarty, correspondent for the Daily Racing Form, reports that if the Florida legislation is passed in its current form, "the state might become the first in a line of dominoes to fall, a reversal of the dynamic that led to casinos being allowed at racetracks in the first place, beginning more than 20 years ago in Iowa. Florida will become the first state to allow parimutuel facilities, including three horse tracks, to forfeit their parimutuel licenses while retaining licenses for casino-type games."
Continued Hegarty, "Hialeah Park, the historic South Florida track that once held one of the country’s most prestigious Thoroughbred meets and now holds a brief Quarter Horse meet, and Pompano Park, a harness track, are both expected to drop their live-racing operations if the bill becomes law; Calder Race Course, owned by Churchill Downs, is expected to completely disassociate itself from its racing operation. Every greyhound track in the state is expected to close."
As Hegarty explains it, in more than a dozen states over the past two decades, racetracks and horsemen have convinced legislatures either to allow casino-type games at their facilities or cut the racing industry in on revenue from new casinos, usually by citing the legalization of casinos at tracks in competing states.
Now, he says, U.S. purse accounts and funds for breeders’ awards currently reap $400 million annually in casino subsidies, approximately 35 percent of the total purse outlay of $1.2 billion in the United States. Those figures are compiled by the Thoroughbred Racing Associations, a racetrack trade group.
To our knowledge, only one other state has introduced legislation this year that would allow all tracks in the state to decouple: West Virginia.
But West Virginia is not likely to pass decoupling, according to lobbyists and officials. Unlike Florida, it's a state that recognizes the value of the horse racing industry to its economy and heritage.
Reach Nancy Smith at email@example.com or at 228-282-2423. Twitter: @NancyLBSmith