Florida House, Senate split on taxation, rules for slots - Tuesday 12th of April 2005

Anti-gambling Republicans on Friday attempted to shackle slot-machine operators with tight regulations and heavy taxes, as the state Legislature continued to craft the rules under which the devices could operate in Broward County.

In the Senate, slots supporters beat back a series of proposals from Sen. Dan Webster, R-Winter Garden, a conservative Christian who tried to load up the slots bill with amendments that could have made it extremely difficult for racetracks and other pari-mutuels to enter the business.

In the House, where individual members work more under the discipline of Gov. Jeb Bush and the Republican leadership, a bill moved forward that would tax slots revenue at 55 percent -- a rate gambling operators said could thwart their plans or lead to the construction of shabby "slots barns" rather than glittery entertainment complexes.

Broward County voters in March approved a proposal to allow slot machines at Gulfstream Park in Hallandale Beach, Dania Jai-alai, Hollywood Greyhound Track and Pompano Park Harness Track, with all tax revenues to go to public education.

But with two weeks to go in the annual legislative session, the House and Senate remained far apart on basic questions of taxation, regulation and the type of machines to be allowed.

The House Fiscal Council unanimously approved the 55 percent tax rate Friday, after Rep. Frank Attkisson, R-Kissimmee, the bill's sponsor, told them the state should try to rake off as much as it could of the $200 million a year each company could make from slots.

"We are responsible for not leaving one dime on the table, since it's going to education," he said.

Alan Solomon, executive vice president of Isle of Capri Casinos, which owns Pompano Park, said the 55 percent rate would discourage the investment needed to create the complex of restaurants and shops that would allow the race track to compete with the nearby Indian casinos and gambling boats. His company planned to make an initial investment of $150 million.

"I don't know that at that rate we'd be willing to go ahead," he said. "By allowing this tax, you're perpetuating the monopoly of the unregulated, untaxed casino business in Broward County."

Slot proponents also pointed to a study by the Legislature's economists that found a 35 percent rate would yield the maximum revenue for the state, with tax receipts dropping as the rate goes higher.

Gov. Bush, who opposed the expansion of slot machines in Florida, said Friday, "I'm comfortable with 55 percent."

Asked about concerns that the rate was too high, he said, "It might be, but I would hope it is part of the process of trying to negotiate in good faith with the Senate, which has a very different position, to find some middle ground."

The Senate Judiciary Committee on Friday adopted a slots bill that was much more favorable to the gambling industry. The bill would tax slots on a sliding scale, from 30 percent on the first $100 million, to 32.5 percent on the next $100 million, and 35 percent for all revenue after that.

Webster, the committee's chairman, proposed a higher rate but backed down. He also attempted to persuade his colleagues to ban alcohol at the slots complexes and force the operators to choose between operating slot machines or maintaining their pari-mutuel business. But those proposals were defeated.

While the House bill directs the tax money to schools around the state, the Senate bill would send the tax money to the Public Education Capitol Outlay trust fund, which finances the construction of new schools.

Sen. Skip Campbell, D-Fort Lauderdale, objected that such a plan would shortchange Broward County because the vast majority of the money would go to counties that were still rapidly expanding and needed more new schools.

Webster countered that some of the money would go to repairs, to implementing the constitutional amendment to reduce class size and to constructing buildings for public higher education.

The House and Senate bills remain far apart not only on taxes but on the types of machines that would be allowed. The Senate bill would permit the more profitable Las Vegas-style Class III slots, while the House version would allow only bingo-style Class II machines like the ones at Indian casinos.

Campbell said the two sides were so far apart he doubted any legislation would be passed this session.

"I just don't see it happening," he said. "I just don't see any major push to bring the House and Senate together."

Senate President Tom Lee said it is important to pass slots bills this year so the industry knows the tax and regulatory environment it will be operating under.

"It's been difficult," he said. "Hopefully things can get worked out in the next couple weeks."

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