County Set To Sell Out To Slots Operators For 24 In Beads
Written by Michael Lewis on January 20, 2005
By Michael Lewis
Miami-Dade commissioners are to vote today (1/20) on selling the county’s soul for $9.8 million a year.
That’s what we could get for letting three sites install 6,500 slot machines that are illegal here now.
If commissioners agree, voters would be asked March 8 to approve the 30-year deal and sell out our glowing future for a fistful of trash. It’s equivalent to the sale of Manhattan for $24 worth of beads – but less defensible.
Yet no elected official has pointed out the peril of going back to the shame of 50 years ago when gambling ran Miami. Nobody questions a vote that would transform this area, destroying its allure for the investors, businesses and residents that we seek to attract.
After all, Las Vegas might mean big money, but it’s not the place you’d choose to raise a family.
The pitch to voters is that without slots, three gambling venues – a horse track, dog track and jai-alai fronton – wouldn’t survive. These dying attractions say they need slots to lure more bettors.
Gambling interests in November got state voters to allow Miami-Dade and Broward, which has four sports-gambling sites, to permit slots the Legislature could tax to fund schools statewide – a shameless linking of a public necessity with a pariah. Bettors here would fund education in counties that permit no gambling.
Now officials have cut a deal with gambling operators, on the table today, to give the county a sliver of the take. In return for less than $10 million, operators could install 6,500 slot machines that would rake in about $275 each daily profit – more than $652 million total profit a year.
If schools got, say, 30%, or $195 million, and the county got $10 million, operators would pocket $447 million a year in Miami-Dade. Add Broward, and operators would get a $1 billion windfall.
And what do public officials say?
Mayor Carlos Alvarez says that while he’s no gambler, he sees no harm in slots.
Commission Chairman Joe Martinez says government should aim first of all at the welfare of its citizens, not at making a profit. But when it comes to gambling, he thinks this is a good deal for the county.
In his message to the commission, County Manager George Burgess notes that this isn’t such a good deal. He cites added crime, congestion, demands for social services, problem gambling leading to mental health and addiction treatment costs and more.
Mr. Burgess also refers obliquely to a key fact: Every dollar slots operators pocket is a dollar that won’t go to mainstream businesses. It’s a dollar not available to pay rent, buy food, pay credit-card debt, buy clothing or attend non-gambling entertainment venues slots would stifle.
In other words, not only would families of gamblers suffer if we got slot machines but every legitimate business in South Florida would lose revenue.
And that, Mr. Burgess points out, would cut sales tax collections, draining county funds even as slots paid the county a sliver of their take.
Consumer spending creates a multiplier slots don’t. A dollar is re-spent over and over, creating sales taxes with each turnover. So the slots’ annual payment may be less than the county’s loss of sales tax revenue.
Thus, we’d have multiple net losses from slots: lost county income, lost sales at local businesses, lost income in families of bettors and loss in community quality of life.
Deterioration of lifestyle, in turn, would slow the outside investment that creates jobs and sells the condos we keep building as if there were no gambling storm on the horizon. The Miami of 50 years ago was not a model that created high-income professional jobs.
Bettors’ losses are especially serious because track and fronton patrons aren’t glitterati or tycoons – they are below average in income and are likely to become a drain on society as a result of gambling losses.
Proponents say bettors get back on average about 90% of what they pour down the slot.
But that implies bettors feed in a given sum one time and leave with whatever they get back – 90% on average. Actually, most gamblers go through not only the money they came with but the 90% that they got back, and then the 90% of that that they got back, and so on. Five times through, the money they walked in with means leaving on average with just 59% of what they bet the first time – and many don’t quit until every cent is gone.
Ron Book, lobbyist for the tracks and frontons, says slots would lure visitors from all over eager to visit the tawdry sites where betting now is limited to so-called sporting events and low-stakes poker.
In fact, nobody will travel by air to dump money into slot machines at tracks and frontons. Local workers will drive over – but don’t expect Europeans, who have luxury casinos, to book a visit to Miami so they can go to the horse track – or an Indian casino.
For if tracks and frontons do get Las Vegas-style slots, the Indian casinos will, too. That will mushroom the amount slots will drain from the economy, though it’s unlikely casinos will pay out to education or local government.
Any payout to the schools, in fact, depends on the Legislature – a decision that will follow the March 8 votes Miami-Dade and Broward plan to set local rules.
But who knows what the Legislature will do? It would be far wiser to await its action before voting here.
What if both counties approved slots and the Legislature didn’t tax them? It would be bait and switch on a massive scale when voters are being told that up to 30% of slot takes would aid education. Nor do we know what formula the Legislature might devise for distributing slot taxes.
Voting before the Legislature acts is the height of cynicism – promising something that might never be.
But then, it’s the height of cynicism to pledge that gambling that would degrade our society would improve schools or to sell our soul for $9.8 million as we hand gambling interests a $652 million windfall. Top Front Page About Miami Today Put Your Message in Miami Today Contact Miami Today © Copyright 2005 Miami Today designed and produced by Green Dot Advertising and Marketing