Casino plans could cut into state’s tourism business

Tallahassee – If the Seminole Tribe of Florida follows through with plans to expand its casinos and resorts, it will siphon off USD 95 million in annual tourist and convention business from around the state and gain an even greater competitive advantage.

Those were the conclusions of Amy Baker, the Florida Legislature’s chief economist, in a report presented to the House Committee on Seminole Indian Compact Review on Friday. The panel is writing legislation to guide the governor on how to renegotiate a new gambling agreement with the tribe.

In addition to „cannibalizing“ the tourism and convention business in Florida, Baker said the existing tax rate imposed on horse and dog tracks and jai-alai frontons gives the Seminoles a USD 272 million tax advantage if they were to install all the slot machines they’re planning. As a sovereign nation, the tribe not only doesn’t pay a slot machine gaming tax, it also doesn’t pay sales tax on merchandise and lodging or property tax on its buildings.

„All of those things from the get-go give them a competitive advantage when they plan to do the expansion,“ she said.

The analysis was requested by Republican Rep. Dean Cannon, whose Orlando-area district includes Disney World and Universal Studios, major competitors for tourism and convention dollars.

The Seminole Tribe has been lobbying legislators to allow them to keep the deal signed by Crist in November 2007 which gives them the exclusive right to operate Las Vegas-style slot machines outside of Miami-Dade and Broward counties and black jack and house-banked card games throughout the state.

The deal was invalidated by the Florida Supreme Court last summer but if it is revived, the Seminoles promise to create 45,000 jobs over the next 10 years and invest in a USD 3 billion resort and casino expansion.

Baker dismissed many of the economic projections made by the tribe, saying the financial projections were “significantly overstated,“ given the state’s current economic decline.

„You’re not going to realize those benefits in the near term,“ she said. „You’re going to realize them over a long period of time.“

Baker also undercut the tribe’s projections regarding its promise to expand its resorts in Tampa, Brighton, Immokalee, Coconut Creek and Hollywood. „To the extent that the expansion is debt-financed, serious delays and higher costs may arise.“

Jim Allen, CEO of the tribe’s casino operation, challenged Baker’s conclusions. He said that the tribe used the same hospitality industry experts, the Innovation Group, that the horse and dog tracks used when it made its case to lawmakers to lower their tax rate.

„We stand by their study,“ he said. „It has been proven time and time again how gambling has a positive impact on an economy, not a negative one.“

Rep. Bill Galvano, the Bradenton Republican who chairs the committee, said that the economic uncertainty makes it „unrealistic“ for lawmakers to rely on any new gambling money for the 2009-10 budget year.

„It’s easy to say go fill in the gap,“ he said. „We have to be realistic about what can be achieved.“