When Florida state Sen. Ellyn Bogdanoff and Rep. Erik Fresen introduced their destination resort casino bill in October, Bogdanofff suggested the text would go through so many revisions before passage that the final version “would look like my dog chewed on it.” Following a series of workshops, Bogdanoff has sent a revised draft to legislators that could lead to the state’s racetracks and jai-alai frontons becoming fully-fledged casinos. If such operations were willing to invest $100m to improve their facilities, they would earn the right to offer lucrative table games in addition to slots. The bill would also explicitly outlaw the estimated 1,000 so-called ‘internet cafes’ operating across the state. The Senate Regulated Industries Committee will consider Bogdanoff’s revisions once the new legislative session commences on Jan. 10.
Significant taxation changes are also being proposed. The original draft called for the new resort casinos to pay a 10% tax on slot machine revenues, which compared unfavorably with the 35% rate currently paid by racetracks and frontons that also operate slots. The new legislation would see all slot operators pay the same 18% tax. But lobbyists for the major Nevada casino companies, which would be required to invest a minimum of $2b in any Florida project, have publicly stated that any tax above 10% would prevent their clients from recouping their outlay. Bogdanoff has therefore declared that if the proposed 18% tax “discourages the Vegas boys from coming and bidding, I’m not going to do it.”
The Nevada boys aren’t the only ones hungrily eyeing a possible Florida resort casino business. Malaysian conglomerate Genting have been among the most ardent suitors for one of the three casino licenses potentially up for grabs. But while Genting waits for Florida’s legislators to make up their minds, the company is plowing ahead with plans to build a second casino in the Philippines. The company already operates Resorts World Manila in conjunction with its local partner Alliance Global Group Inc., and attendance at that casino is expected to increase to 5m this year from 2m in 2011. The new Resorts World Bayshore in Pasay City will be a 31-hectare gaming complex – three times the size of Resorts World Manila. The joint venture partners are committed to spending $1.1b to develop the property. Alliance president Kingson Sian is “confident that there is a market” in Manila to support both operations, but the challenge will be to ensure that the new Bayshore operation won’t “cannibalize” revenues at its crosstown rival in Newport City.
