Genting Resorts World announced Monday that it wants to stake its fortunes on a scaled-back, slots-only resort on the Miami waterfront, a suggestion that the company may be prepared to sidetrack the glitzy destination resort that it planned two years ago.
Under the proposal, the Malaysian gambling company would enter into a four-way partnership that would allow it to use a permit owned by Gulfstream racetrack to open a slots casino at the Biscayne Bay property once owned by the Miami Herald.
If approved by legislators or state gambling regulators, the permit would allow Genting’s Resorts World Miami to open 2,000 slot machines and off-track betting. The proceeds would be used to augment thoroughbred purses at Gulfstream’s racetrack and go into a non-profit company to benefit the other partners: Florida horse breeders, owners and trainers. Genting and Gulfstream would keep some of the revenue as administrative fees.
“I think it’s game-changing,” said Lonny Powell, CEO of the Florida Thoroughbred Breeders and Owners Association. “This is the first partnership where the revenue stream and investment would actually go back into the horses.”
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Gulfstream has argued that a permit it obtained last year for a non-profit subsidiary allows it to operate in both Miami-Dade and Broward counties because of property it owns that straddles the county line. But state regulators have rejected that interpretation and Genting would have to get legislators to clarify the law, get partimutuel regulators to change the ruling or take the matter to court to obtain the permit.
The concept is a “less lucrative option” than the $3.1 billion resort on 13.9 acres originally sought by the company in 2011, said Genting lobbyist Brian Ballard, but allows the company to work with the horseracing industry.
“Genting, over the past couple of years, has decided to look at this with a fresh set of eyes,” Ballard said. “They’re not closing out destination resort option at all.”
Legislators have twice rejected destination resorts and, Ballard said, if they don’t approve it when they meet again this coming session after a sweeping review of the state’s gambling laws, “it’s probably not going to happen.”
Powell said the agreement is unlike any other racino model in the nation because portions of the wagering from both slots and horseracing would go to a non-profit. For example, the deal would provide greater rewards for Florida-bred horses, create a thoroughbred aftercare program for retired horses, help disabled jockeys and create a dedicated marketing program to attract more horse racing fans and steer money into improving racing facilities, he said.
The partnership with the horse industry and Gulfstream offers the company the opportunity to appeal to a different constituency to win the votes necessary to expand gambling in Florida by potentially reaching legislators in the state’s horse country in North and Central Florida.
“In Florida, we’re a $1 billion industry with tens of thousands of jobs and an economic impact that exceeds spring training,” Powell said.
But the proposal could also open the door to a major shift in the state's gambling regulations by allowing a stand-alone slots casino to operate without horse or dog racing on the same site. For years, Florida legislators have watched as state gambling regulators allowed existing pari-mutuel permits to be modified to allow expanded gambling but refused to tighten or clarify the law. This year, legislators say they expect to conduct a wholesale rewrite of the gaming regulations.
The partnership between Genting and the horse industry is similar to the company’s arrangement at Aquaduct race track in Queens, New York. There, Genting refurbished the languishing racetrack and opened a slots casino, which has since become the highest grossing slots parlor in the nation.
That prospect has Frank Nero, former head of the Miami Beacon Council and now a business consultant, wary about Genting’s latest plans.
“I’m not a fan of destination casinos gambling but slot houses — which is what they are proposing — are the worst of the worst,’’ he said. “This doesn’t attract the high rollers that Genting has been talking about.”
Instead, Nero said, Genting’s latest idea is “a desperate attempt to try to save pari-mutuel horse racing so that Genting can continue to expand into this area.”
Although Ballard and Powell both said they believe a case could be made to allow the Genting deal to stand without legislation, others in the pari-mutuel industry say that would be illegal.
“If they issue a permit that allows this to happen, it will draw a legal challenge. I guarantee it,’’ said Wilbur Brewton, lobbyist for Calder Casino and Race Course. “This is an expansion of gambling.”
Genting purchased the Miami Herald property on Biscayne Bay for $236 million and is in the process of demolishing the newspaper’s old headquarters. Although the company’s push for a change in Florida’s gambling laws have stalled in Tallahassee, executives say they’re proceeding with a resort and residential complex on the waterfront property even if they can’t get approval for a gambling facility.