Gambling operator Resorts World Omni has struck a deal with Gulfstream Park in the hope of getting slot machines rolling at a downtown Miami property.
The proposal is a dramatically scaled-back version of the glamorous casino resort once pitched to -- and rejected by -- Florida lawmakers, and it hinges on a controversial permit at the horse track.
The agreement between Resorts World, a division of Malaysia-based Genting Group, and Gulfstream, along with breeders and thoroughbred horse owners and trainers, involves relocating a permit to the Miami bayfront property purchased by Genting in 2011 for $236 million.
Backers of the deal are hoping lawmakers will sign off on the plan, which they contend would be a major boon for the horse-racing industry in Florida, as the Legislature undertakes a sweeping review of gambling during the 2014 session.
But others in the pari-mutuel industry say that, if approved, it would be a major shift in the state's gambling landscape and essentially "decouple" horse and dog racing from slot machine operations.
The permit at the heart of the deal was issued to the Gulfstream Park Thoroughbred Aftercare Retirement Program, a nonprofit linked to The Stronach Group, which also owns Gulfstream. Proceeds from the nonprofit go toward caring for horses after they retire from racing and toward benefits for disabled jockeys as well as increases in purses.
But the permit has been entangled in a battle over whether the permit issued to the nonprofit, now called the Gulfstream Park After Racing Program but known as "GPTARP," is situated in Broward County, where Gulfstream's permit is located, or in Miami-Dade County, as Gulfstream and its lawyers contend.
State law allows pari-mutuel permit holders in Broward and Miami-Dade counties to also operate up to 2,000 slot machines. Under the deal, GPTARP would continue to run horse races at Gulfstream, while Resorts World would manage the slot machine and card room operations at its downtown property.
The plan would give Resorts World entree into the gambling world in South Florida although on a much smaller scale than the $3 billion luxury casino once envisioned at the 14-acre property, home to The Miami Herald for four decades.
"We think we're one of the pre-eminent gaming companies in the world. We're looking for a way to move the initiative forward," Resorts World CFO Christian Goode said. "This is just one opportunity or potential opportunity. If it's not viable, then we'll pursue other means."
Gulfstream President and General Manager Tim Ritvo called the agreement between the track, the casino operator and the horse industry "the single most important thing that's happened to thoroughbred racing in a long time."
Joe Stronach, one of the state's largest landowners and largest horse breeders, is backing the deal with Resorts World because the deal could pump millions into the horse industry, Ritvo said.
"Our ownership is heavily, heavily invested in horse racing," Ritvo said. "He's interested for his legacy to be a positive impact on thoroughbred racing and this permit does that."
South Florida tracks, including Gulfstream, at one time viewed "destination resort" proposals pitched by Resorts World and other out-of-state gambling operators skeptically, saying they already had a difficult time competing with Seminole Indian casinos.
"We don't completely disagree that the full-blown destination casinos would hurt us. This is the alternative. This is the compromise where we can create new industry or a new casino that really helps ?subsidize the industry that has been here for many, many years," said Ritvo.
About a year ago, Florida breeders complained that GPTARP had entered into the pari-mutuel arena without including the breeders in its board of directors as required by law.
But Florida Thoroughbred Breeders and Owners Association CEO Lonny Powell said this week that Resorts World helped New York's horse industry boom and could help Florida's thoroughbred industry get back on track.
"One of the things about past racino models that has frustrated me was none of the money went back into racing,'' Powell said. "That's what this model does. From my perspective it's a game-changer for our industry in Florida."
But other pari-mutuel operators, including those who challenged the GPTARP permit from the beginning, aren't as keen on the idea.
Gulfstream and its lawyers believe the GPTARP permit is domiciled in Miami-Dade County. But state regulators disagree. "The Gulfstream Park Thoroughbred After Racing Program (GPTARP) permit is a Broward County permit,'' Tajiana Ancora-Brown, a Department of Business and Professional Regulation spokeswoman, said in an email Tuesday.
And, regardless of where the permit exists, state law now specifies that slot machines must be located at the same place where pari-mutuel activities like horse or dog racing occur, said Wilbur Brewton, a lawyer and lobbyist for Calder Casino & Race Course.
"A slot machine license may be issued only to a licensed pari-mutuel permit holder, and slot machine gaming may be conducted only at the eligible facility at which the permit holder is authorized under its valid pari-mutuel wagering permit to conduct pari-mutuel wagering activities," the statutes read.
Having slot machines separated from dog or horse racing or jai alai games would be "a dramatic change in the philosophy" of gambling law, Brewton said.
"Obviously it's understandable that other facilities would try to oppose it because who would like increased competition? But the idea of the permit is not just to benefit a single entity but to benefit the entire racing industry," Ritvo said.
Gulfstream and the other partners said they are working the legislative route out of deference to lawmakers who are in the midst of examining the state's gambling infrastructure.
"We hope we can get enough legislators to look at this and understand the true purpose of this permit is not to benefit any one entity, whether it's Genting, the breeders or even the racetrack. It's about to energize and revitalize the racing industry," Ritvo said.
Resorts World, which also owns the Hilton Hotel a block away from the old Herald tower site, plans to put up three condo towers, a promenade along the water and a 500-room luxury hotel, about a tenth of the 5,000-room extravaganza once envisioned.
"That's one plan we would have obviously loved to pursue ?but we continue to look for all opportunities," Resorts World executive Goode said. "I wouldn't say it's a disappointment. It's just another opportunity we feel we should consider."
Adding 2,000 slot machines unconnected to any pari-mutuel facility is "not truly an expansion of gaming," Ritvo insisted.
"It's already an active permit and obviously they'll be raising more tax dollars but it's subsidizing a business that also exists," he said.
If lawmakers refuse to act, the partners could still try to get approval from state regulators.
"If need be, we could always exercise our right as the permit holder," Ritvo said.