Transforming Florida into the next gambling mecca might not be as successful as advocates hope, says a new report expected Tuesday from the Spectrum Gaming Group.
In a draft of the analysis, obtained Monday by The News Service of Florida, expanding gambling will not have a significant impact on the state’s economy, nor will it create many new jobs.
“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 the report, prepared for submission to the Legislature Tuesday.
The Spectrum version was to be the economic analysis that will guide the state’s gambling policy in the spring 2014 legislative session.
In the report by Dara Kam of the News Service of Florida, casinos with blackjack, roulette and convention services — referred to as “destination resorts” — are all open for discussion as lawmakers examine the different scenarios and how they would affect state revenues, in addition to the hoped-for windfall for businesses, residents and tourists.
Instead, Kam writes that the current Spectrum findings represent a less-than-optimistic model of the economic effects of gambling expansion.
In addition, the report represents an about-face from the optimistic claims of only two years ago, when the group performed a similar study for the Malaysian-based Resorts World, linked to The Genting Group.
Genting is one of several out-of-state gambling concerns trying to create a foothold in South Florida.
The Legislature rejected an earlier draft of the Spectrum study because it did not consider the economic impact of the expiration of Seminole Indian Tribe compact. The Tribe is allowed to operate gambling casinos offering card games such as blackjack.
The compact with the Tribe expires in 2015, which will result in a reduction of about $233 million in revenue.
“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 representative for House Speaker Will Weatherford, told the News Service of Florida of the call to redraft the report.
The 460-plus-page Spectrum report says keeping the existing state of gambling would generate around $51 million a year, and enhance existing pari-mutuels’ revenues to about $2.7 billion per year, an increase of only 9 percent.
Even if Florida became a gambling paradise, with blackjack, roulette, table and card games in 33 casinos around the state, as well as developing six “destination resorts,” the revenue would only amount to an additional $12 million — adjusting for the $110 million lost in the expired agreement with the Seminole Tribe.
The report continues by saying that introducing casinos in high-population counties like Broward, Miami-Dade, Hillsborough and Orange, would unlikely impact overall employment and wages. This directly contradicts an earlier proposal by Spectrum prepared for Genting that a destination casino in Miami-Dade would produce as many as 100,000 jobs, generating up to $400 million for the state.
However, casinos in those other counties could boost jobs and wages—in the hospitality and leisure industries.
“Results suggest that casinos would likely have a mildly positive economic impact on their local economies and the state economy,” reports the News Service. “Since most counties that currently host pari-mutuels have very large populations, the estimated employment and wage impact (on all industries) are minor.”
The three-part Spectrum report cost the Legislature $400,000; the first volume released in July. The last two will be released Tuesday, which include an assessment of Floridians impressions of gambling, completed by the University of Florida.
Several scenarios were taken into account in the study — from estimates of tax revenues from slot machines at existing pari-mutuels in Miami-Dade and Broward, to a “full-blown casino industry” with six destination resorts and card games allowed at all state pari-mutuels.
South Broward pari-mutuels are seeking lowered tax rates, to compete with the Seminole Hard Rock Casino complex in Hollywood.
Another Spectrum finding is that expanded gambling would not undermine existing hotels and restaurants, a major criticism by anti-gambling groups.
“We find no evidence to support the contention that casinos dramatically ‘cannibalize’ other industries.”
The report concludes “there is no net-effect on county-level employment,” reports the News Service. “On balance, casinos have a neutral impact on local labor markets.”
This gloomy outlook leaves gambling operators and advocates scrambling to regain footing, especially after increased lobbying and public relation efforts to convince lawmakers that gambling will be advantageous for Florida.