- The agreement in the Florida legislature on slots in Broward County features a flat 50% tax rate which is one of the highest in the country. The House and Senate split their difference on the number of machines per facility right down the middle, settling on 1500.
It is estimated the tax will raise at least $100 million for schools, which is far less than the $300 million to $500 million the pari-mutuels pledged to provide under an early plan that was based on a low rate and let each facility have at least 3,000 machines. [Sun-Sentinal]The tax rate is far higher than the 35% advocated by the parimutuels, who claimed that a significantly higher rate would discourage them from building the extravagent gambling palaces that some had planned. Pompano Park harness was one of those with lofty aspirations, and the stock of their parent company reacted poorly in trading on the Nasdaq exchange on Thursday.
"Obviously, the four operators would have liked to have seen more, but the hope is that one day more machines will be allowed," said Brian McGill, an analyst at Susquehanna Financial Group.Nobody seemed particularly happy with the bill. Slots opponent Governot Bush said "I just don't think this is right for our state ... The fact that there's going to be a bunch of slot machines in Broward County doesn't warm my heart." [AP] Broward Senator Steve Geller, a key supporter of slots, complained "This is a terrible bill. I think it's setting them up for failure.....I believe they're doing this so the governor can lead the repeal (campaign) and say, 'See? Look what you have instead of those nice facilities you were promised.'" [Sun-Sentinal]
"While we are encouraged that an agreement has been reached, the high tax rate (as expected) will likely limit investment dollars in the facilities," Deutsche Bank analyst Marc Falcone said in a report. [Reuters]
You can be sure that a repeal effort will soon be underway; gambling opponents are persistent if nothing else. Perhaps relentless is a more appropriate word. In Arkansas, opponents filed a lawsuit to block the installation of electronic “games of skill” at Oaklawn Park; and I previously mentioned the repeal effort soon to be underway in Pennsylvania.
- The U.S. House and Senate are working on tax relief bills for Gulf Coast businesses devastated by Hurricane Katrina. But inserted into the House version, at the behest of conservative Republican representatives, is a clause that would deny tax breaks to casinos and racetracks, as well as to massage parlors, liquor stores, country clubs, and tanning facilities.
Rep. Frank Wolf, R-Va., led the effort to carve those businesses out of the bill. He said Congress should not allow "our constituents' hard-earned tax dollars, in these kinds of record deficits, to subsidize the rebuilding of a massage parlor, a liquor store or a casino." [AP]In deciding for the rest of us which businesses are too immoral to get help, the religious right has targeted a casino industry that employed about 50,000 people in Louisiana and Mississippi and generated more than $770 million a year in tax revenue. [LA Times]