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Expanded Gaming May Leave State With Lighter Purse

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By CATHERINE DOLINSKI

cdolinski@tampatrib.com

Published: March 31, 2009

TALLAHASSEE - The Senate's plan to expand gambling may net the state far less than its sponsor was predicting.

Monday, the state's top analysts poured over the multipronged plan to loosen regulation and expand gambling options across the state at facilities owned by the Seminole tribe as well as nontribal parimutuels.

Sen. Dennis Jones, sponsor of the plan, predicted that it would raise at least $600 million, or as much as $1 billion, in the first year through taxes and fees. However, the analysts found Monday that the entire package would yield only about $390 million in 2009-10.

That projection is critical, because many lawmakers hope new gambling revenue can help plug the $6 billion-plus hole in the upcoming fiscal year's budget.

The economists were still working Monday night on their projections for later years, which are expected to show progressively higher revenues as the state's gaming businesses expand. Amy Baker, director of the state Office of Economic and Demographic Research who led Monday's conference, confirmed their finding of a "net loss" for next year from the changes to non-tribal gaming.

By introducing, and taxing, proposed new electronic gaming, Florida stands to gain about $17.3 million, she said, but the state will also lose revenue from the lottery and other areas.

Cutting the tax on slot machine revenue as planned, from 50 percent to 35 percent, costs $20 million.

Adding up those and other pros and cons, Baker said, shows the state gaining $400 million from a compact with the Seminoles next year, but losing about $10.5 million from changes made to state rules for nontribal gaming.

Jones, R-Seminole, called the analysts' projection "unrealistic" and overly conservative. "How are you going to 25 facilities and offer them over 10 months the opportunity to expand their products, and come up with a loss?"

The analysts assumed the compact would take effect at the earliest possible date, in July, although that's not guaranteed, Baker said. Other uncertainties include the state's potential gain from allowing blackjack at some parimutuels. The legislation does not authorize a 10 percent tax levy that the sponsor appears to have intended, so the analysts did not calculate it.

In the House, where leaders are more averse to expanding gambling, Rep. Bill Galvano described the new estimate as "sobering."

"It doesn't surprise me, when you look at all that has to occur to implement it fully," said Galvano, R-Bradenton, who chairs a panel contemplating a gaming compact with the Seminoles. "You have to compute all that against the backdrop of an economy where everyone is spending less."

Reporter Catherine Dolinski can be reached at (850) 222-8382.

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