Lobbyist SUSAN SUMMERALL WILES
St. Johns County commissioners to consider slot machine referendum
Playing the odds?
Posted: July 16, 2016 - 11:06pm | Updated: July 17, 2016 - 12:05am
By JAKE MARTIN
St. Johns County commissioners on Tuesday will discuss a proposed ordinance calling for a referendum to determine whether slot machine gaming would be allowed in the county. The licensed pari-mutuel facility would be built on the northeast corner of Interstate 95 and State Road 207.
Also on the table, by a separate agreement, is a provision through which the county would receive 1.5 percent of that facility’s gross slot machine revenues via monthly payments.
Behind the push for the referendum is BestBet, which currently operates facilities in Jacksonville and Orange Park. Its facility on Race Track Road, called St. Johns Greyhound Park, closed in 2012.
Susie Wiles, BestBet spokeswoman, told The Record on Wednesday that the company is not seeking a new license but an expansion of the allowable entertainment to include slot machine gaming.
“What the company is asking the commission to do is to put this on a ballot in November so the voters can decide if they want this economic development and entertainment option available in St. Johns County,” she said.
Wiles said the 1.5 percent revenue share provision is the same as what was included in the company’s proposed ordinance for a slot machine gaming referendum it put before the City of Jacksonville.
“It’s completely voluntary, and it’s what BestBet offered,” she said.
According to a feasibility and economic impact analysis prepared for BestBet by The Innovation Group, based in New Orleans, the proposed St. Johns County facility would be expected to generate $329 million in slot revenue from nearly 4 million visits during its first stabilized year of operation — in 2020.
The analysis projected St. Johns County’s share would come out to over $4.7 million annually and touted other revenue streams — both direct and indirect — as well. According to staffing estimates, for example, the facility would employ nearly 1,400 workers, providing over $48 million per year in labor income.
A interoffice memorandum from Doug Timms, director of the Office of Management and Budget, to County Administrator Michael Wanchick said the analysis did not include an estimated $300,000 that could be collected annually via the county’s bed tax and property taxes.
The memorandum, dated June 2, said while the job creation component did “appear attractive,” the overall average salary would likely be only 80 percent of the average workforce salary for the county. Also questioned was the shelf life of the projected slot machine revenues and the long-term payout to the county.
“The average slot revenue per visit calculates to $85.25,” the memorandum said. “This revenue, on which the $4.7 million County revenue is entirely dependent, can be volatile and likely will decline as the facility ages. For example, average slot revenue per visit of $50 would reduce annual County revenue to $2.8 million.”
Competing venues, particularly internet gambling sites, were also cited as possible challenges to the project’s sustainability.
“However, if not located in the County, it is likely that another facility will be placed near enough to the County to tap the County market,” the memorandum concluded.
Wiles said the plan would be to construct a whole new project, expected to open by 2018, and to transfer BestBet’s existing license for the Race Track Road operation to the S.R. 207 facility. However, Wiles also said the decision is yet to be made whether that project would move forward without the slot machine component.
The proposed referendum is for slot machine gaming on a 30-acre site with frontage along I-95, near the northeast corner of State Road 207 and I-95.
The county’s Future Land Use Map shows the area is designated Business Commerce. It is surrounded by Mixed-Use districts to the east and south, with Industrial to the west and Residential-B to the north. The area’s zoning is Commercial Intensive and Commercial Warehouse. It is surrounded by residential PUDs to the north and east, an industrial PUD across I-95 to the west and mostly Commercial Highway Tourist to the south.
According to county documents, the proposed $133 million facility would include space for gaming as well as a hotel and restaurant/bar business.
Wiles said there are no solid plans for what BestBet will do with its facility at 6332 Race Track Road.
Playing the odds?
Commissioners may choose to advertise and hold a hearing on the proposed ordinance and referendum, modify the proposed ordinance and referendum, or not hold the hearing. A second hearing and enactment of the ordinance would be scheduled for Aug. 2. The referendum would be included on the Nov. 8 general election ballot.
Getting the referendum before St. Johns County voters for approval isn’t the only obstacle in BestBet’s way, however.
Slot machine gaming is a regulated activity through the Florida Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering. Slot machines are permitted only in “eligible facilities,” which are defined in Florida Statute 551.102(4) as facilities in counties where a majority of voters have approved slot machines via referendum, provided that such facilities have conducted a full schedule of live racing for two consecutive calendar years and met a host of other statutory requirements.
In January 2012, St. Johns County adopted a resolution placing a similar question on whether to allow slot machine gaming on that year’s general election ballot in November. However, by August, the county had rescinded its authorization in order for the state to resolve an issue of whether further statutory or constitutional authorization would be required in order to hold a referendum on slot machine gaming.
An agreement between the state and the Seminole Indian tribe only allows slot machines at non-tribe facilities in Miami-Dade and Broward counties. However, six counties have authorized referenda on slot machine gaming: Brevard, Gadsden, Hamilton, Lee, Palm Beach and Washington counties.
The Florida Supreme Court, in the meantime, is expected to render an opinion later this summer on whether those and other counties may hold such referenda without additional authorizations. That case is Gretna Racing, LLC v. Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering, Case No. SC15-1929.
[Ed's note: The Florida Supreme Court Clerk's office advised me on Thursday, July 14, 2016 that no more decisions will be issued until August 25, 2016).
There are other hurdles BestBet may still have to jump in order to get the go-ahead.
When asked how the company would overcome some of the stigmas attached to gambling in getting the referendum passed, Wiles said, “Define what risks you see.”
“It isn’t crime,” she continued. “What risks? It’s a safe, indoor activity for adults. It’s not located near any residential neighborhoods or the historic districts. I’m not sure what stigma is there.”
She said crime in the Monument Road area of Jacksonville, where the company operates its BestBet Poker Room, has gone down since the facility’s opening.
The county memorandum said recent polling has indicated over 80 percent of Americans accept gambling and that overall social acceptance of such a facility would be likely, although it did not provide a source the polling data.
“More problematic is that the County does serve the social welfare and such facilities are generally supported by 15 percent of clientele who produce 40 percent of the visits,” the memorandum said. “Approximately 5 percent of clientele are estimated to develop serious social problems related to gambling.”
Lobbyist SUSAN SUMMERALL WILES