Guest AuthorGreyhound racing has a rich history in Florida. The first greyhound racetrack opened in Florida more than 100 years ago.
Our state quickly became the nation’s unofficial capital of the sport. Greyhound racing became one of the most popular spectator sports in America.
While some of Florida’s smaller tracks have closed in recent years, greyhound racing is still very much alive. In fact, it was recently reported that live attendance and wagering at Florida’s greyhound racetracks increased in 2013. Florida leads the nation for live greyhound racing in both attendance and in wagering.
The state started collecting taxes on greyhound races (as well as horse races) in 1931 to help offset budget shortfalls during the Great Depression. Since then, more than $73 billion has been wagered in Florida at pari-mutuel tracks; the state collected $4.35 billion in taxes.
Over the last 10 years, the reported amount wagered, as well as the revenue to the state, from greyhound races and other pari-mutuel activities has seen a significant decline. It appears that a large percentage of the decline is the result of wagers diverted by Advanced Deposit Wagering or ADW.
Last year’s Gambling Impact Study commissioned by the Legislature determined that most ADW firms have established themselves in Oregon through a hub network which opened in 2000. The amount wagered through the hub has dramatically increased from $2 million its first year to $2.24 billion in 2012. From 2007 to 2012 the amount wagered using the ADW hub increased 47 percent while at the same time the reported amount of live wagers at Florida’s pari-mutuels fell 46 percent.
It has been conservatively estimated that the amount of the bets reported to the state is less than half the actual wagering at Florida’s pari-mutuel facilities. ADW accounts for the other half of the wagers.
That also means that the state is not collecting taxes on roughly 50 percent of the money being wagered in Florida.
Florida is not the only state facing this problem. In September 2012, the State of New York issued a report that details the effect of ADW on its pari-mutuel industry. New York lost out on $200 million in wagers placed through ADW, primarily at its race tracks in 2012 alone, according to the report. Those are wagers that are not reported and not taxed.
As a result of the report, New York’s Wagering and Racing Board recommended that state law be amended to require ADW operators who accept wagers from New York residents to be licensed in the state. The Board also recommended imposing taxes and fees on each wager accepted from a New York resident using ADW. Other states, including California, Oregon, Washington, Virginia and Illinois, already impose fees and taxes on ADW operators who collect wagers from their residents
Florida has always been fairly conservative when it comes to gambling. Voters rejected casino gambling three time (1978, 1986, 1994). The state aggressively challenged the Seminole Tribe when it opened a high-stakes bingo parlor in 1979. Even the state lottery was not approved until 1984. Generally, only gambling specifically approved by voters or otherwise authorized by law are legal.
Which raises a question about Advanced Deposit Wagering. Since ADW is not specifically authorized by Florida law, some believe it illegal.
Considering the amount being wagered in Florida using ADW, as well as the harm to the state, it would appear to be an activity that is ripe for review by the Attorney General.
Also, the Legislature should follow the lead of other states and require ADW operators who accept wagers made in Florida to not only be licensed in the state but also pay taxes and purses on those wagers. Anything less is a bad bet for Florida.
Jeff Kottkamp was Florida’s 17th Lieutenant Governor and served in the Florida House of Representatives for three terms. He is General Counsel to the Florida Greyhound Association. He lives in Tallahassee, Fla.
