Doubling down on gambling by turning Florida into the next Las Vegas would have just a minimal impact on the state's economy and wouldn't do much to create new jobs, according to an analysis by Spectrum Gaming Group set to be released Tuesday.
"Overall, Spectrum believes that the expansion of casino gambling, whether on a small scale or very large scale, would have, at best, a moderately positive impact on the state economy," according to a draft report obtained by The News Service of Florida on Monday and set to be released in its final version on Tuesday.
Lawmakers plan to rely heavily on the economic analysis by The Spectrum Gaming Group to craft the state's gambling landscape during the 2014 legislative session.
Blackjack, roulette and convention center/casinos called "destination resorts" are all on the table as the House and Senate explore what different scenarios could mean for state coffers as well as businesses, residents and visitors.
But the Spectrum findings paint a somewhat bleak picture of a widespread expansion of gambling, a marked departure from claims made by the same company two years ago in an analysis performed for Resorts World, the Malaysia company linked with The Genting Group, one of the out-of-state casino operators trying to establish a footprint in Florida.
Legislative staff rejected a preliminary draft report from Spectrum because it failed to consider that a compact with the Seminole Indian Tribe, allowing the tribe to operate card games like blackjack and baccarat, is set to expire in 2015. Spectrum was asked to revise its analysis to include scenarios under which the money from the card games -- about $233 million a year -- would go away.
"The substantive conclusions reached in the report are reached independently by Spectrum. Our responsibility has been to make sure Spectrum complied with the methodology set out in the contract," Ryan Duffy, a spokesman for House Speaker Will Weatherford, said of the request to rework the analysis.
The current Spectrum findings are likely to cause dismay for gambling operators who have again beefed up their lobbying and public relations teams in another effort to persuade lawmakers that gambling is good for the economy.
According to the draft report, keeping the status quo would generate about an extra $51 million a year for the state and boost existing pari-mutuels' revenue by less than 9 percent to about $2.7 billion per year.
But even a gambling wonderland -- blackjack and roulette along with other table games and card games -- at 33 casinos around the state and six destination resorts would only pump in an extra $12 million a year because the state would lose nearly $110 million from the Seminole Tribe, according to Spectrum.
"The results suggest that casinos would likely have a mildly positive economic impact on their local economies and the state economy," the report found.
The 460-plus page report also appears to debunk earlier claims by Spectrum for Genting that a convention center/casino-style proposal in Miami-Dade County could bring 100,000 permanent jobs and generate up to $400 million in state revenue.
"The results suggest that, countywide, there is unlikely to be significant changes in overall employment and average wages with the introduction of casinos," the report said of opening casinos in highly-populated Broward, Hillsborough, Miami-Dade and Orange counties.
But casinos in those counties could boost jobs and wages in the leisure and hospitality industries, the report found.
Adding slot machines to existing dog and horse tracks outside of Miami-Dade and Broward counties isn't likely to create an employment boom even in other nongambling sectors, according to the draft report. Voters in six counties, including Palm Beach, have approved referenda that would allow pari-mutuels to operate slots.
"Since most counties that currently host pari-mutuels have very large populations, the estimated employment and wage impact (on all industries) are minor," the report said.
The Legislature paid Spectrum $400,000 for the three-part study, the first portion of which was delivered in July. The final two portions, scheduled to be released Tuesday, include a survey of what Floridians think about gambling performed by the University of Florida and the economic analysis conducted by Spectrum and Regional Economic Models Inc., or REMI.
The report to be released Tuesday includes economic analyses under a variety of scenarios ranging from maintaining current operations to a full-blown casino industry that would include six destination resorts and allow blackjack and roulette at all pari-mutuels. The analysis also includes estimates of different tax rates on slot machines, now at 35 percent at the eight pari-mutuels in Miami-Dade and Broward counties. The South Broward pari-mutuels are seeking a lower tax rate and card games like blackjack that they say would enhance their ability to compete with the Seminole Hard Rock Hotel and Casino in Hollywood.
The Spectrum study also found that an expansion of gambling likely won't increase the current gross social costs, which it estimates at $258 million to nearly $1.2 billion per year.
And the report rejects arguments by anti-gambling groups and the hospitality industry that casinos steal business away from existing restaurants and hotels.
"We find no evidence to support the contention that casinos dramatically 'cannibalize' other industries," the report concludes. "The fact that casinos will compete with other firms, and that there is no net-effect on county-level employment, suggests that, on balance, casinos have a neutral impact on local labor markets."
