South Florida Slot Machine Action Sets Record, but Taxpayers Still Screwed
Photo by Nick Sortal
South Florida’s racetrack casinos paid $187.9 million in taxes on slot machines this past fiscal year, surpassing last year’s record of $182.5 million. Miami was mostly up, Broward generally down.
The state receives 35 percent of casino slot revenues. The eight casinos at horse tracks, dog tracks, and jai-alai frontons garnered $537 million via slots in the year ending June 30, according to state figures. That’s about a 3 percent increase from the $521 million the casinos made in 2014-15.
Slots at racetrack casinos are legal only in South Florida, thanks to a 2004 constitutional amendment approved by 50.8 percent of Florida voters. Broward and Miami-Dade then had separate referendums as well.
While $187 million is nothing to sneeze at, it’s still far less than was expected more than a decade ago. Back in 2004, proponents of the slot referendum said the machines could raise up to $500 million per year in taxes. The state’s Office of Economic and Demographic Research at the time, comparing revenues from similar casinos, estimated slots would generate $200 million to $500 million, depending on the tax rate set by the legislature. Florida slots started off at a 50 percent tax rate, then dropped to 35 percent in 2010.
That said, all Miami-Dade casinos improved from last year: Magic City Casino again led the way, making $83.5 million, up almost $3 million. Calder improved $1 million to $74 million, followed by Hialeah Park ($68 million) and Casino Miami ($61 million), both of which took in about $4 million more than last year.
Interestingly, the three established casinos in Broward County all dropped, but the newly reopened Casino at Dania Beach made up for it, so overall the county slot haul increased. The Isle Casino continues to be South Florida’s leader, although it dropped more than $2 million to $143 million. The casino, based in Pompano Beach, has the good fortune to be close to Palm Beach County, which does not allow slots. Isle officials say about one-third of their business comes from across the county line. (And if you hadn't noticed, there’s some money in Boca Raton.)
Gulfstream Park Racing & Casino again barely held its lead over Hallandale Beach rival Mardi Gras. Each casino is down about $1 million from last year, with Gulfstream earning $48 million and Mardi Gras $46.8 million. Both likely were dinged by the reopening of Dania Beach, although the remodeled jai-alai fronton lags far behind ($11 million).
Slots are where the money is at. While South Florida slot revenues were at $537 million combined, the area’s poker rooms took in only $41 million.
Seminole casinos aren’t required to reveal their slot revenues, although overall their seven casinos in Florida took in about $2.2 billion with slots, table games, and poker. The Seminoles make payments to the state of about 12 percent on their revenues, and by extrapolating figures from public records, I once wrote that the Seminole Hard Rock Hotel & Casino in Hollywood makes as much as all the South Florida pari-mutuels combined. The Miccosukee tribe, which runs a casino in west Miami-Dade, has no agreement with the state, so its revenue figures are secret.
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State figures also report casinos’ payback percentages. Hialeah, Casino Miami, and Magic City, all within a few miles of each other, are extremely competitive and lead the area with percentages at about 93.5 percent. The Isle continues to tighten up, from 92.88 percent two years ago to 91.57 last year to 90.98 currently The casino is one of the gems for the St. Louis-based Isle chain, so this is likely necessary to keep stockholders happy.
Each slot machine has a programmable chip that casino managers can use to determine how much a machine pays out, although each individual spin and result is determined by a random number generator. (So over a short time, one jackpot can skew payback percentages, but over a year it pretty much evens out.) A slot costing $1 per spin often has a payback percentage of 97 percent; machines costing just one cent often pay only 85 percent. (This gives knowledgeable slot players an incentive to play higher-denomination games. It's just good business.)
Tax money via slots could grow quickly after a Florida Supreme Court case is decided. The justices are considering whether language in a state bill that allowed Hialeah to add slots applies to other jurisdictions. If so, at least six Florida counties could be adding slots.
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