Slots by a TKO
On a spring Thursday, the parking lot at Gulfstream Race Park appears as vast and unbroken as a salt flat, inviting a high-speed, line-cutting swoop to the front of the clubhouse.
The racetrack has stood here in Hallandale Beach since 1939, virtually the dawn of time in South Florida years, and it has run races continually since World War II. But with attendance declining here and at other tracks, the original, 65-year-old, 30,000-seat track had become outdated. That vast parking lot hardly ever filled up anymore.
Hence, the new Gulfstream. Here at the edge of the lot stands a Simpsons-yellow building with two stories of high arches in a crescent around a paddock encircling a fountain alive with dancing water and colored lights. The new clubhouse, which opened in January, has all the ersatz elegance of a cocaine kingpin's jungle hacienda.
The horseracing crowd is already complaining about an apparent de-emphasis on the ponies here. The building has only about half the former race-day seating capacity, and racing fans find themselves butting against one another when they try to spread out their racing newspapers. What's going on? Here's a clue. A sign near the elevator reminds guests: "Slots are coming to Gulfstream this summer."
Even without the actual one-armed bandits, Vegas has arrived at Gulfstream. On the second floor, the sound of stadium announcers echoes onto the concourse. The January-to-April race season is over, and soon basketball season will be as well. In the interim, Gulfstream's new venue, Tickets Sports Theatre, a posh restaurant that seats 440 and tonight appears nearly full, has opened its doors for fans and casual gamblers who might want to place a simulcast racing bet while swilling Bud Lights and watching Shaquille O'Neal get into foul trouble.
The joint also features its own in-house entertainment. At a break in the game, the speakers suddenly blare L.L. Cool J's "Mama Said Knock You Out," and a door at the front of the room disgorges a fleet of women clad in decorated white T-shirts and deep-pink shorts with the high, cheek-cradling cut of briefs long ago outgrown. These are the Knockouts. They're babes. They cavort past people eating chicken wings and pasta, waving inflatable, hot-pink boxing gloves. One hands a glove to a kid of maybe 11 who's wearing a Dwyane Wade jersey, and he slips it on triumphantly to bop his brother in the puss.
WAXY-AM (790) sports radio host Paul Messels and a Knockout select a strapping young guy named Jason from the audience to choose one of six doors on stage. He chooses door five, from which emerges a comely Knockout with a sign reading "$500," which ought to cover Jason's hair-gel bill this month.
At halftime, Messels and another Knockout summon to the stage a customer who will get to take the equivalent of a half-court basketball shot with a thousand bucks at stake. When the man middle-aged, heavyset, his shirt tucked into his slacks comes forward, the hostess sits him on a couch and tells him to wait. Then the lights dim. Spotlights fall on Knockouts in high boots and fishnet waggling on platforms outfitted with what look like stripper poles. They complete a second number as a group of seven, like a Parisian revue crossed with a halftime dance number.
Then the heavy older man gets to take his shot, which he must have been inwardly dreading, because with the house lights upon him, he chucks a granny-style underhand shot at the hoop. It lands so short that it requires a bounce just to reach the pole holding up the goal. Messels wonders aloud whether they could have counted a ball that bounced in.
One of the Knockouts consolingly pats the contestant on the shoulder.
"What's your day job?" she asks into the mic.
"I play golf," he replies, before slinking back to his table for high-fives.
This scene will soon be the new face of gambling in Broward County: jumbo-screen TVs, $12 Cuban sandwiches, boobs bouncing in kids' faces, every man a big shot. The first wave of Broward's complement of 6,000 slot machines at the four Broward facilities where the state allows and regulates gambling Gulfstream, Pompano Park horse track, Hollywood Greyhound track, and Dania Jai-Alai arrive in August.
In truth, Broward gamblers have never had more betting venues: cruises to nowhere, websites, the Bahamas, low-stakes poker. But the slot machines will be the first legal, Las Vegas-style gambling in the state outside of an Indian reservation. Since Broward voters passed a county referendum allowing the pari-mutuels to become "racinos," the struggling tracks have undertaken hundreds of millions of dollars' worth of new development to prepare for the slots (and perhaps more gambling someday) and to offer the same kind of swanky, gambling-resort trappings as Vegas and, locally, the Seminole Tribe's hugely successful Hard Rock Hotel & Casino, which has about 2,100 one-armed bandits sucking up coins.
Get ready for a new entertainment option for gamblers, complete with social ills, huge tax windfalls, foxy indoor cheerleaders, and a driving force to expand its reach. The era of Broward, the Gambling Mecca, is upon us.
"Come on, two, don't let him in the fuckin' race! Shit. Don't let him in the race! Make him go up top! No, no. That's so stupid. Oh, now he runs. It's too late now! He doesn't know how to ride. Son of a bitch!"
With that, a bettor who gives his name only as Marshall trashes another ticket at the bank of simulcast screens at Pompano Park, where the number-two horse in the fourth race at Raceway Park in New Jersey just cost him another few singles. With no live racing tonight, maybe 100 bettors gather to wager under the low fluorescent lights of the poker room and curse nags in faraway states. His race over, Marshall, clad in a blue cap and golf shirt, retires to the bench just outside the poker room to smoke near a concrete ashtray full of discarded betting slips.
"If it weren't for slots," he says, "this track would have folded." A grim prospect, in Marshall's opinion. He cites the addiction and bankruptcies he saw in his hometown of Detroit as evidence that slots will ultimately pollute racing culture.
"It ain't gonna hurt the rich person," he says. "It's gonna hurt the $2 bettor. Why am I going to bet on just one horse when I can play four times at a machine?"
The comparative investments of slots versus ponies is a dilemma that track brass hopes many people come to weigh. A lumpy, cheerful man of about 40 who was raised on a New Jersey horse farm, Pompano Park's marketing director, Steve Wolf, speaks of the soon-to-arrive slots not just as a way to make a barnload of money (that, it will be) but also as a way to revive horseracing. Wolf on a recent race day leads an excursion to the nearly deserted portions of the 42-year-old track, stopping at the sixth floor, a vast and empty restaurant arranged in terraces reaching toward the track to give up to 800 patrons a view of the finish line. Wolf points out Jackie Gleason's former Friday night reserved table and recalls the other entertainers and athletes Rodney Dangerfield, Yogi Berra, Mickey Mantle who used to partake of the state-of-the-art, Art Deco-influenced track.
"Everyone used to come here," Wolf says. The obvious, unspoken implication is that they no longer do, at least not in the hordes of the past.
For a glimpse of the future, Wolf treks up a floor, to a cement catwalk among a field of ceiling beams that leads past the inside of the dining room's ceiling (through which, he says, a poor newsman once fell while chasing a dropped ticket). Emerging from the press box, out a side door that's held open by wire wrapped around the handrail, Wolf crosses a tarpaper roof. Now he's overlooking, from eight stories up, the 223 acres of the track's property: parking lots, stables, a former golf course now overgrown, and a swath of sand where earth-moving machines sit among the ordered wood frames and rebar foundations that give the whole thing the look of a gigantic, fallow tomato patch.
Early next year, this is where a $140 million casino and entertainment complex will house the track's allotment of 1,500 slots. This 157,000-square-foot playpen might have been even grander if the Legislature hadn't written into the statute some of the toughest restrictions on slot machines of any of the dozen states with racinos. They are to remain open for no more than 16 hours daily, and they are not allowed to install ATMs on the property. The tax rate for the state's coffers is set at 50 percent. On top of that, each racino will pay about 3.2 percent to their respective cities and Broward County, $3 million a year in licensing fees, and $250,000 to fund programs for problem gamblers.
"When you add in these things, you're at about 65 percent tax on the gross," says state Sen. Steve Gellar (D-Hallandale Beach), who sponsored a failed bill to set the tax rate at 30 percent instead of 50. "Normally, people pay taxes on their net profit. I'm not aware of any business in the country that makes money paying 65 percent taxes on gross revenue."
Additionally, the machines will pay out about 90 percent of the money wagered, meaning that, of every dollar fed into a Broward slot machine, proprietors will keep about 3 or 4 cents for overhead and profits.
Those strictures reflect the political climate in Tallahassee. Since he took office as governor in 1997, Jeb Bush has fought almost any expansion of gambling in the state. Both the House and Senate leadership in the overwhelmingly Republican Legislature opposed gambling. A pari-mutuel-funded political action committee called Floridians for a Level Playing Field succeeded in getting onto the 2004 ballot a measure that would permit county referendums in Broward and Miami-Dade to decide whether to allow pari-mutuels in the counties to have slot machines. As with any vote involving gambling, it made for unlikely bedfellows. On one side were pro-business Democrats, education proponents, jockeys, and degenerates of all stripes; aligned on the other side were God-fearing North Floridians, sanctimonious Republicans, anti-traffic neighborhood residents, anyone concerned about crime or corruption, and the gaming tribes that contributed heftily to anti-gambling ads.
The vote was close even by Florida standards. In a strong north-south split, Amendment 4 carried only 16 of Florida's 67 counties, the same number that Al Gore carried in 2000. Strongest in favor was Broward County, which approved the measure by 226,000 votes; it passed by only 119,000 statewide. Broward voters later approved slots in their referendum while more conservative Miami-Dade declined them.
"You realize the odds," Wolf says, "to have the governor, the head of the Senate, the head of the House, [and] your attorney general all vehemently against this movement, but yet it still passed?"
Investors recognized a coup when they saw one. The day the votes shook out for Amendment 4, the stock price for Isle of Capri, parent company of Pompano Park, jumped 24 percent in the heaviest trading day in the company's 13-year history and has matched that gain in the months since.
The state's own economic projections suggest why. The Office of Economic and Demographic Research, which crunches big numbers such as these for the state Legislature, estimated that the four Broward pari-mutuels would generate $225 million in taxes by fiscal 2007, when all the machines are running. Although pari-mutuels have traditionally generated plenty of money for the state, those numbers have been way off in recent years, as horseracing has struggled nationwide. The reasons are legion, including the rise of other sports, the proliferation of gambling and off-track betting, and the aging of the horse-betting public, making the racetracks sadder, poorer, and ever more worthy of avoiding.
In fiscal 2004, the state's 24 pari-mutuels coughed up only $33 million to the state, about a third of what they had generated ten years earlier. The wagers at six jai-alai frontons have all fallen below the state's threshold for taxing them, so, aside from their card rooms and licensing fees, they don't pay the state anything for the right to host gambling. Slot machines bleeping, clanking, hypnotic, addictive are expected to change that.
Gellar contends that the state could have made even more loot if the tax rate were more favorable to the pari-mutuels. "The bill that the Legislature passed is, in my opinion, set up to fail," he says.
Still, the racinos-to-be have a lot of confidence in the new machines. According to Daniel Adkins, executive vice president of Hollywood Greyhound, the dog track expects to have a $40 million to $50 million renovation complete by the end of the summer, when the facility will rebrand itself as the Mardi Gras Racetrack and Gaming Center. Its subsequent developments, including plans for shops and a 5,000-seat arena, also planned to be in the tens of millions of dollars, will follow a New Orleans theme because, obviously, with the real New Orleans gone, someone has to take up the slack.
Gulfstream will open first with just 500 machines while preparing for the next thousand. A couple of weeks before he stepped down as track president and general manager, Scott Savin said that Gulfstream had planned to go ahead with renovation plans regardless of the outcome of the slots votes. But the machines will abet Gulfstream's planned development of a "self-contained entertainment village" a $1.2 billion project that will contain a 500-room hotel, 1,500 condos, a movie theater, and nearly a million square feet of retail and office space.
As Savin describes it, the Gulfstream complex begins to sound a bit like another gambling haven, less than ten miles away to the northwest. "We're not on the scale of the Hard Rock," Savin says, invoking the elephant in the room, "but we're kind of a mini version of it... We have to have a lot of ingenuity in our marketing, because we can't compete on a dollar-by-dollar basis with them."
Grand plans were also ready to roll in Pompano, before that 50 percent tax rate was announced. Now they've been tabled but not shelved. That means maybe a 500-room hotel. Maybe RV hookups. Maybe a mini-golf course. Maybe a Tri-Rail station with retired racehorses leading carriages to and fro. Maybe a little petting zoo with the track's minihorses. The words Wolf uses are "total destination resort." The closest thing to a sure bet is that Pompano will open its new digs in early 2007, with 1,500 machines and a sunken poker room meant to recall a gladiatorial arena.
Until then, the most common sight might be one like the scene that ends Marshall's night. Around 10 p.m., he reaches into his pants pocket and pulls out three $1 bills mashed around one another.
"I better go to the gas station," he says.
Someone walks past and asks him how he did.
"Terrible, terrible, terrible, terrible day," comes the reply. "And when I say terrible, I mean terrible."
He slouches toward the exit. "I have enough to go get a pack of smokes at the gas station," he says. "I had $20. I kept saying I should leave with it. But that's what gamblers do, I guess." He pauses to take a drag off his last cigarette. "They gamble."
While Pompano and Gulfstream apparently prepare to price $2 gamblers off the property, the next big bet in Broward may be taking place on the Seminole reservation. Now that slot machines are legal somewhere in Florida, by federal statute, they're a handshake with the state away from being legal in tribal casinos.
Efforts to coax comment from the tribe itself were fruitless, but experts on Indian gaming, while split on just how much latitude the tribe can assume, all expected the legalization of slot machines to feed any gambling expansion that the Seminole (or, for that matter, the Miccosukee, in Miami-Dade) care to undertake. The tribe currently is restricted to gambling machines that run a modified version of bingo, a class of gambling dubbed by the Indian Gaming Regulatory Act as Class II. The Seminole Hard Rock Hotel & Casino in Hollywood has a couple of thousand such machines, which look, feel, smell, and pay out like genuine slot machines though they're not as profitable.
The pressure is on to bring in full-fledged slots and other gambling games.
"Eventually, my opinion is, Indians will get Class III gaming throughout the state," says Bob Jarvis, a professor and gambling expert at Nova Southeastern University Law Center in Fort Lauderdale. The state perhaps in a time of budget crunch will recognize that it's getting no cut of the billions of dollars spilling into tribal machines, and perhaps it will offer to broker a compact. "Any time a state needs money, they go to the Indians and say, 'Would you like some more gambling?'" Jarvis continues. "Most of the time, that makes everybody happy."
Jarvis mentions California's recent compact with its gaming tribes as a mutually beneficial scenario between tribal and state governments. With California looking under couch cushions just to pay the power bills, Gov. Arnold Schwarzenegger brokered compacts with five gaming tribes that ensured their monopoly in exchange for a billion dollars upfront to the state and annual payments amounting to hundreds of millions more. Under federal law, the state may take a small cut of the spoils to cover regulation and infrastructure but may not take more without providing something in return. In California's case, that came in the form of exclusivity. Such a deal could still be brokered in Florida, Jarvis says.
The Seminole submitted an application to Gov. Bush's office last year, requesting the license to run Class II slots that the racinos will have. Bush didn't bite. The matter has reportedly been kicked up to the federal Bureau of Indian Affairs at the Interior Department, which administers Indian gaming regulations.
There's a tradition of rock-bound resistance to gambling in the state. "Ten, 12 years ago, the State of Florida did have a budget problem," Jarvis says. "We still said 'no,' and that's how crazy the legislators from north Florida have been. If the state were sinking into the ocean and the Indians said, 'How about it?' they'd say, 'Screw you we'd rather drown. '"
Jarvis' prediction, though: In 30 years, any county in the state that wants gambling will be able to have it, creating little Atlantic Cities in Fort Lauderdale, Miami, the Tampa area, and Jacksonville. "I think it has to be that the Indians are so in our face, making so much money," he says, "that the northerners will say it's OK to have these 'mini islands of sin. '"
The only catch is that the Seminole already rake in the dough, with none going to the state. Alan Meister, an economist with the California-based Analysis Group, who writes an annual Indian Gaming Industry Report, found in his most recent edition that in 2004, the seven Indian casinos/bingo parlors in the state (including the two Seminole establishments in Hollywood and one in Coconut Creek) generated $862 million in gambling revenue, largely off the strength of 7,700 slot-like machines. That haul made Florida the ninth-largest Indian gaming state and, but for Oklahoma, the largest in which the state doesn't receive a portion of Indian gaming revenues.
"Competition will have a negative effect on the tribe," Meister says. "The magnitude of that depends on what the racinos do, how the tribes react to that, and what else they have to offer. The tribe has a very, very attractive property. Would that really be hurt by racinos? Is that really going to draw away business from the tribe?"
In the short term, it's hard to imagine the Seminole properties taking much of a dip. Traffic into the 2-year-old casino is so dense, the tribe has reportedly talked with the state about helping to pay for a new Florida Turnpike exit just south of the Hard Rock, on Stirling Road.
"My personal feeling is, once the Indians get the Class III slots, they're not going to sit still," Pompano Park's Wolf says. "They want full gaming. And they're going to exercise their full right, and I'm sure that we won't say a word and hope that they get it. Then we're going to come back and say, 'Hey, look, they're going with full table games, and we should have it too.' And with a better, more favorable government, if those things happen, we're going to go through with the big plans."
Downtown Dania Beach along Federal Highway is a sagging strip of dive bars, antiques dealers, and shops selling conch shells. For most of recent memory, the one defining landmark in the area was a towering neon "DANIA JAI ALAI" sign atop a hotel, pointing people toward the largest employer in Broward's oldest city.
Today, the sign is a hurricane-ravaged skeleton, much like the aging fronton itself, a shadow of former glory. Dania Jai-Alai hasn't submitted any development plans to the city, and General Manager John Knox deferred questions about the fronton's plans until the rules regarding the machines are finalized. But City Manager Ivan Pato says he expects a new facility to be built on the property, whether it's by the current owners or a larger casino company that might snap up a facility with a newly minted license to print money. That money will mean jobs, he hopes, and business with the various vendors and establishments around the city.
"Ten years from now, I think I'll look back and say what a difference this place made, and the difference will be positive," Pato says. "What is the option? To have a place that's dying? Dania Jai-Alai puts the city on the map, and I think it will put us on the map again. You're only a few steps away from having a full casino anyway. It's only a matter of time."
The trick is whether the racinos can actually split the uprights. Today, they are, with the exception of the renovated Gulfstream, low-rent joints most charming in their rumpled, egalitarian air. What will happen if they succeed in turning around the ailing pari-mutuel industry? Full casinos might not be such a distant notion.
Laws dictate a minimum number of performances for racing and jai alai, but if owners want to shave off about half of the current performances or heck, lobby to change the laws they may find that the original function of the pari-mutuels just bogs down the casino business.
The International Jai-Alai Players Association, which represents the players who toss the cue ball-like pelota at speeds of up to 150 mph, has already raised the depressing prospect of a Dania Beach fronton without the games. The worst-case scenario has occurred in Rhode Island, where the introduction of slot machines doomed live jai alai, as owners of the fronton dropped the costly enterprise of jai alai in exchange for slots revenues.
During another Heat game broadcast at Tickets, Savin, the then-Gulfstream president, pondered the possibilities. "We never thought there would be table games in the near future, as in the next ten years," he said from behind sepia-tinted sunglasses, indoors, at night. "But the Seminoles could actually make that happen, if they push the envelope. We'll see. There are a lot of different ways it could play out."
The next few years are the tryout for this stage of the gambling experiment. Gas prices could continue to climb, pressuring lawmakers to find more avenues to attract tourists to the state. The Seminole could defuse any gambling arms race by standing pat with their $900 million in revenues. In any case, the issue is unlikely to fade depending heavily on Floridians' next choice for governor.
"I'm sure [Bush] would like nothing more than to leave office without the first slot machine being turned on," Savin said. "To his constituency, he has stayed true. Maybe he leaves office, and whether it's [Charlie] Crist or [Tom] Gallagher or Rod Smith or [Jim] Davis, then it changes all of a sudden. There are these four pari-mutuels open that are hopefully delivering hundreds of millions of dollars to the state, and people see this isn't a big, bad thing; they see it's a big, good thing. It gets easier to get either more machines or the Dade County referendum, so there would be seven pari-mutuels.
"And Jeb can say, 'I controlled it on my watch,' and when he runs for president in 2012 or whatever, fine, he kept his word to his supporters."
As Savin talked, the crowd cheered lustily at the game this turned out to be the night that the Heat dispatched the Chicago Bulls from the playoffs and the sound echoed off a ceiling high enough to render a light sculpture hanging from the center nothing more than glowing stalactites. At eye level, the green walls are festooned with plasma-screen TVs, but above, they give way to great blank expanses of wall.
It was pointed out to Savin that at Vegas casinos, you wouldn't find unadorned walls. They would carry video boards with the latest odds for these very same playoffs, and beneath them, a man in a dapper shirt would take bets on whether Miami could cover the spread.
Lowering his voice, Savin replied: "It's very easy to envision this as a sports book."
Enough of horseracing. Bring on the next referendum.
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