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Not only are slot machines not a cash cow for the state’s public school system, they’re not even that much of a money-maker for casino owners.

 

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Editorial  

Money for Education a Bad Argument for Slot Machines

When Miami-Dade County’s pari-mutuels roll out the propaganda machine on Jan. 29, they’d do well to keep school funding deep in the background. Just use some other line of reasoning, like, “Hey, gambling is already allowed in pari-mutuels — why not slot machines?” Or maybe, “Well, Broward has ’em, why not us?”

The referendum was scheduled during the Democratic and Republican presidential primaries by the Miami-Dade County Commission. It will be a do-over from an election held back in 2005. During that election, pro-casino forces touted how much money would be raised for public schools from slot machines. Broward voters bought the pro-casino arguments, passing the initiative. Miami-Dade voters didn’t.

But the education argument just isn’t going to fly anymore. Las Vegas-style slot machines in Broward were predicted to gather $196 million for public schools statewide. But, according to a recent Miami Herald article, only $113 million was collected from slots. State legislators reportedly are scrambling for another $45 million now for state schools.

It isn’t because people aren’t gambling on slot machines. The Florida Council on Compulsive Gambling reported a 25 percent increase in calls, mainly from South Florida and mainly regarding slots.

Broward pari-mutuel operators blamed what they called a high tax rate on slot machine revenue — a 50 percent tax — that they claimed cut into their marketing budget.

“Relief” was on its way. A bill that would have allowed casinos to collect state credits from taxes charged by cities and counties passed the Senate, but was rejected in the House of Representatives. Also not passing, it turns out, was a bill that would charge slot machines only a 30 to 35 percent tax rate. Casinos argued that a lower tax rate would enable them to run more commercials about their particular slot machines and compete with casinos on the Seminole and Miccosukee reservations, which aren’t charged any state taxes.

But then again, tax credit for casinos translates to even less of a share for public schools. Wasn’t public education the whole point of asking voters in Miami-Dade and Broward counties back in 2005 if they wanted slot machines?

A bill allowing video lottery terminals in pari-mutuels also died; however, regulations allowing them to have 2,000 slot machines instead of 1,500 did pass. Yet many Broward casinos don’t see the point. Dania Jai-Alai just shelved plans to build a giant casino on its premises, claiming the tax rate reduces the profitability of slots significantly.

It’s a catch-22 that Miami-Dade pari-mutuels are sure to consider as they seek their slot machine prize: Make only moderate profits with a 50 percent tax rate or lobby the state for a 30 percent rate or tax credits that will mean less money for the schools. If Miami-Dade pari-mutuels are wagering on slots, expect them to hedge their bets by fighting for a lower tax rate.

Pro-casino forces, if they relaunch their lower tax rate bid, likely will argue that money for more marketing would translate to more revenue sent the way of public schools. Well, calls to the FCCG are already on the upswing. Is an extra revenue stream for schools statewide (the pool of money would also be shared with all the other counties that don’t allow slot machines) a fair tradeoff for more Miami-Dade residents becoming hooked on gambling?

Or maybe Miami-Dade gaming institutions should really make a conservative bet and not push too hard for slots at all. If the remarks from pari-mutuel institutions are to be believed, slot machines aren’t magic moneymakers in Florida. Perhaps it’s best for Miami-Dade pari-mutuels to capitalize on recent regulations allowing higher stakes in poker rooms and to focus on their particular specialties, whether horse racing, dog racing or jai alai.

But using education as a hook? That would not be a good bet.

 Comments? E-mail letters@miamisunpost.com.

 


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