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Business Observer Thursday, Mar. 25, 2010 11 years ago

Gulf Coast Gaming Mecca?

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A state economist developed an analysis to gauge the revenues to the state from gaming in different counties and the Gulf Coast dominated the list — potentially more than doubling state revenues.
by: Jay Brady Government Editor

All eight Gulf Coast counties from Pasco to Collier are on a state list of the top 26 counties in Florida that are potential candidates for state gaming licenses in a proposed auction-based system.

Sarasota and Pinellas counties top the statewide list.

Five Gulf Coast Counties are in the top eight on the list with Lee at fourth, Manatee tied for fifth, and Collier eighth.

Coincidentally, the analysis shows the state has the capacity for eight licenses. It also shows that the eight licenses, if distributed among the more highly ranked counties, could provide more than twice as much revenue to the state than two other gaming deals that have been proposed by the governor and the Legislature.

The list is based on an index created by ranking counties on density, population, number of seniors, and per capita income. Given that criteria, it makes sense to see the Gulf Coast so highly represented on the list.

Amy Baker, a well-respected economist with the Florida Legislature's office of economic and demographic research, developed the index and presented several alternative auction systems March 11 to the House Select Committee on Seminole Indian Compact Review.

The committee is chaired by Rep. Bill Galvano, R-Bradenton. It's a bit ironic, that the key legislator who, for the most part, has resisted any major expansion of gaming in Florida, represents a district smack in the middle of gaming's sweet spot.

Baker's analysis cautions that no cash would flow to the state until fiscal year 2012 when the eight licenses are assumed to be sold for a total of $1.5 billion or 2.3 billion depending on the auction system.

Still, the study concludes that one auction system could generate $2.5 billion in tax revenues for the state over the four years through fiscal 2014, and nearly $1.7 billion under another auction system scenario.

Either way, both scenarios would yield more than Gov. Charlie Crist's latest proposed compact with the Seminole Tribe ($1.09 billion if $287.5 million in “banked” funds from the Seminole Tribe is included) or the 2009 Legislature's proposal outlined in Senate Bill 788 ($971.5 million).

The reason why auctions are efficient market mechanisms is outlined clearly in the study: “The economic theory is that 'the parties in the market are much better informed than the government with respect to the economic value of the goods offered.'”

But some significant stumbling blocks might keep some of the more anti-growth Gulf Coast counties from stepping up to the table. The study assumes local governments are willing partners, land is available for gaming, and that any required referenda would be approved prior to auctioning a license to operate within a county.
—Jay Brady

BY THE NUMBERS:
Highest Ranked Gaming Counties

Counties Index Rank
Sarasota 67
Pinellas 66
Palm Beach 65
Lee 64
Broward 61
Brevard 61
Manatee 61
Collier 60
Martin 59
Miami-Dade 58
Indian River 57
Pasco 56
Volusia 55
Charlotte 54
Lake 53
Hillsborough 52
Source: Florida Legislature Office of Economic and Demographic Research

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