South Florida’s racetrack casinos paid $187.9 million in slot taxes this fiscal year, surpassing last year’s record of $182.5 million.
While $187 million is nothing to sneeze at, it’s still far less than anticipated 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 the legislature placed. Florida slots started off at a 50 percent tax rate, then dropped to 35 percent in 2010.
That said, all of the 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.
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.
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.
Interestingly, the three established casinos in Broward County all dropped, but the newly re-opened Casino @ 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.
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. Both likely were dinged by the re-opening of Dania Beach, although the remodeled jai-alai fronton lags way back ($11 million).
Slots are where the money’s at. While South Florida slot revenues were at $537 million combined, the area’s poker rooms took in “only” $41 million.
The 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 that amounts to about a 12 percent tax on their revenues, and by extrapolating figures from state 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.
The state figures also report casinos’ payback percentages. Hialeah, Casino Miami and Magic City, all within a few miles, 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 now 90.98. The casino is one of the gems for the St. Louis-based Isle chain, so my thought is that it’s part of a plan 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. My take is that’s just good business.)
Tax money via slots could grow quickly with the turn of a court case. Florida’s Supreme Court is considering whether legislators’ language that allowed Hialeah, which was not part of the original referendum, to add slots applies to other jurisdictions. If so, at least six Florida counties could be adding slots.