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Frank Fahrenkopf: Destination resorts: a welcome expansion for Florida

Florida is a textbook example of what’s known as “gaming creep.”

With bingo, slot machines, pari-mutuel racinos at dog and horse tracks, jai alai, cruises to nowhere, poker rooms and now barrel racing, Florida has witnessed tremendous gaming growth. The state ranked No. 3 in the nation in total gaming receipts in fiscal year 2010 – behind New York and Pennsylvania.

It’s important to remember that much of this growth has happened without legislative approval. Instead, clever lawyers have taken advantage of loopholes in the state’s patchwork of gaming laws.

The “no casinos” argument against gaming in Florida became moot years ago. One of the nation’s largest casinos operates successfully in Tampa, attracting visitors from across the I-4 corridor.

With Florida’s gaming laws in disarray, anyone who argues for no casinos today is taking a stand supporting an unacceptable status quo where gaming continues to grow in the state without legislative permission or necessary, up-to-date regulatory oversight.

It is clear Florida needs to get its collective arms around the regulation of gaming. Looking at Florida there is no doubt the state needs to rebuild its regulatory structure from the ground up.

It is encouraging that state lawmakers are carefully reviewing gaming and considering enacting stronger regulatory reforms. The state should seriously study the strong gaming commission system that Nevada and New Jersey have. It’s the same tough model Singapore adopted and is being considered in Japan.

It is unusual that an industry would welcome an increase in regulation, but for the gaming industry it is essential. Regulatory structure ensures that the people involved in the business have the acumen, skill and morals to deal with financial matters honestly.

For an industry that deals with large amounts of cash, this is absolutely necessary. Setting firm regulations will ensure that everyone plays by the same rules and that only those who are truly qualified can engage in the gaming sector.

Having a license to operate in the gaming sector is a tremendous responsibility. Strict regulations would prevent unqualified businesses from running a gaming operation in Florida. This approach would provide lawmakers with a tool to actually reduce gaming in the state.

The Legislature now has an opportunity to take action.

Establishing an integrated/destination resort in South Florida could provide a critical lynchpin to reforming gaming laws while providing an economic boost to South Florida by creating quality jobs, generating capital investment, attracting more valuable tourists, and reviving Miami-Dade and Broward’s lagging convention and trade show business.  We’ve seen these resorts flourish in Las Vegas, Singapore, and Macau. There’s no doubt they would succeed in South Florida, too.

The integrated/destination resort model envisioned for South Florida would be a high-end, luxury property that offers lavish amenities, five-star dining, upscale shops, shows by nationally known performers and gaming. These resorts attract visitors from all over the world.

The majority of people travelling to these resorts are not going primarily to gamble. They are visiting to dine at five-star restaurants, watch incredible live shows or participate in business meetings or conventions. Every year, thousands of people flock to these resorts to watch golf tournaments or tennis matches and never set foot in a casino.

The Legislature now has an opportunity to weigh this issue and create a fair process to establish a destination resort and get the best deal for Florida.

Some critics wed to the status quo in Florida gaming are afraid of increased competition from a destination resort. Their fear is unfounded.

For example, there’s a mom-and-pop sandwich shop in Atlantic City called White House Subs that’s been in business since 1946. The shop had several nearby competitors, but its foot-long sandwiches drew people from all around. The restaurant gained an amazing reputation and their competitors were the ones that failed. Businesses producing a quality product will survive.

The market should pick the winners and losers, not the government. It is best to trust free-market competition.

Destination resorts attract a different market sector than a traditional theme park. History shows both can operate successfully, simultaneously.

Walt Disney World is about 230 miles away from downtown Miami, about the same distance as Las Vegas is from Disneyland. Disneyland opened in 1955 and with 16 million visitors a year, has successfully operated unthreatened by the casinos not only in Las Vegas but also the dozen tribal casinos that operate in the same region.

The Sands Macau integrated resort opened in 2004 and sits an hour ferry ride away from Hong Kong. According to TEA/AECOM’s 2012 Global Attractions Attendance Report, Disneyland Hong Kong saw its attendance grow by 13.6 percent between 2011 and 2012 and Ocean World experienced nearly 7 percent growth in that time.

As my old boss President Reagan liked to say, we should “trust but verify.”

As former president of the American Gaming Association, we surveyed Americans and an overwhelming majority — about 80 to 85 percent — has no problem with gaming for themselves or others.

With integrated/destination resorts, Florida has an opportunity to rebuild its gaming rules, close the loopholes and shenanigans that have caused “gaming creep,” all while providing a vital economic engine for South Florida based on improving the region’s convention and trade show opportunities.

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