MANATEE -- Political discussions about expanding casinos in Florida are being met with opposition from local dog tracks and slot arcades that fear a big player would eat away at their loyal customer base.
Legislation allowing mega destination casinos is now being considered in the state’s annual legislative session. But local pari-mutuels -- dog tracks, horse racing associations, jai alai and poker rooms -- say business already is bumpy, and they’re concerned about the potential for a new neighborhood bully.
While casino revenues are skyrocketing in Florida, a slump in consumer spending has hit pari-mutuels hard -- challenging the old adage that all gambling is recession-proof.
If more competition is added to an already tight market, operators say it will cause problems.
“Of course it would hurt us,” said Scott Pinkus, owner of the Winners Circle sweepstakes arcade. “How would it not have an impact?”
Experts say when times are tough, recreational gamblers usually scale back. But recession-battered consumers down to their last dollar may actually be more apt to gamble when they otherwise wouldn’t because they see a bigger upside in winning.
“You see a lot of older people originally from up north who are on pensions and Social Security, and this is what they do for recreation,” said Sean Snaith, economist at the University of Central Florida. “This is sort of the evolution here.”
Snaith believes if the casino legislation ultimately is approved, it would give the economy a shot in the arm. Unlike corner arcades and most pari-mutuels, the Vegas-style casinos would become a destination -- filling tables at local restaurants and beds at area hotels, he said.
But many aren’t sold on the rosy picture presented by Snaith and others.
Because the goal of a casino resort is to keep visitors under one roof, the state’s restaurant and lodging association fears they would cannibalize the industry with resorts across Florida already failing to meet capacity.
“We can’t compete against their business model,” said Carol Dover, president and CEO of the Florida Restaurant & Lodging Association. “They can give away rooms, discount them heavily, and package them with food and drink.”
Pari-mutuels also are pushing back. While net slot revenues at major Florida casinos have soared over the past four years, other gambling institutions have seen their bottom line shrink.
Florida casinos reported $175.2 million in net revenue collected six months into the current fiscal year, which began in July. That tally represents a 10.7 percent increase from the same time last year, a 75 percent jump from 2009, and 82 percent surge from 2008, according to the Department of Business and Professional Regulation.
At the same time, wagers made at the state’s 34 pari-mutuel institutions are down 6 percent from last year, and 13 percent from fiscal year 2008-2009, state records show.
The trend forced the Sarasota Kennel Club three years ago to discontinue live summer races. The track, located on Old Bradenton Road near the airport, is now only fully operational from November to May.
If it weren’t for revenues collected at the poker room, the track may have had to shut down entirely, Director of Racing Tom Bowersox said.
The card room brought in $402,559 in November. Racing bets only equated to $308,563, according to the state.
“The economy has had a lot to do with our situation,” Bowersox said. “We’re always looking for new business. People have just decided to go elsewhere for their gambling.”
There was a time when dog tracks and bingo halls were the only spots in town a lucky consumer could hit it big. The proliferation of strip mall slot arcades has changed that.
The arcades, also referred to as Internet cafes, can offer customers true casino-style games.
Most payouts come on Visa gift cards, but some even handle cash by following a legal loophole that classifies the non-skill games as sweepstakes, putting them in the same category as the Monopoly game at McDonalds. The only difference is these are played through purchased Internet time or phone cards.
The arcades are popping up all over Southwest Florida, with overhead much lower than a pari-mutuel due to minimal regulation and staffing costs.
But the idea of a Vegas-style casino even has the arcades on edge.
“There’s a lot of competition,” said Terry McDonough, manager of Derby Sweepstakes in Bradenton. “They’re popping up everywhere in the area, but each one is a little different. People don’t have money to go on these Vegas trips, and they enjoy (the machines).”
Josh Salman, Herald business writer, can be reached at 941-745-7095.
