Racetrack can keep slots
Ruling against thoroughbred breeders and trainers, an administrative law judge Tuesday backed up a decision by Florida gambling regulators to allow Calder Race Course to keep its lucrative slot-machine license after demolishing the grandstand where bettors once watched horses compete.
The case, filed by the Florida Horsemen’s Benevolent and Protective Association against the state Division of Pari-Mutuel Wagering, highlights the growing tension between the greyhound and horse industries and racetrack operators, who have sought to do away with live racing while keeping more-profitable gambling activities such as slots and poker, a process known as “decoupling.”
The horsemen’s group filed the complaint after regulators renewed the slots license for the Miami Gardens casino last year, following the razing of Calder’s grandstand.
But lawyers for Calder accused the horsemen of trying to force the track to build a glitzy new stadium despite a dramatic decline in horse betting that prompted the destruction of the aged facility two years ago.
Under Florida law, slot-machine gaming areas must be “contiguous and connected to the live gaming facility.”
The complaint alleged that the renewal of Calder’s slot-machine license after the grandstand was torn down amounts to an “unadopted rule.”
In general, the horsemen want slots players to be able to view live races, believing that seeing the activity will enhance the odds that gamblers will also wager on horses.
When Calder added slots in 2010, the area where gamblers played the machines was connected to the live gaming facility, the parties involved in the case agreed.
But after the 400,000-plus square foot grandstand was razed in 2016, only a partially covered sidewalk now connects the slots area and the live racing area, Bradford Beilly, the horsemen’s lawyer, argued during a hearing in May.
The destruction of the grandstand “materially changed” the configuration of the track, Beilly told Administrative Law Judge Lawrence P. Stevenson.
“There is nothing between the slots facility anymore and whatever Calder deems to be its live gaming facility,” Beilly said.
But in Tuesday’s 35-page order, Stevenson found that gambling regulators were correct to allow the track to keep its slots license, despite the modifications to the track and grandstand.
While Calder did not seek permission from the state to tear down the grandstand, regulators visited the track regularly and “were well aware of Calder’s plans,” Stevenson’s final order said.
“No one from the Division (of Pari-Mutuel Wagering) advised Calder that tearing down the grandstand would create a slot machine compliance issue,” he wrote.
Calder in 2014 “outsourced” its operation of race meets through an agreement with Gulfstream Park, which now operates all of Calder’s live racing at the Calder facility, Stevenson noted.
Demolition of the grandstand began in 2015 and was completed in 2016, but the live viewing areas “still contain outdoor seating and tiki huts where patrons can get food and drinks, view the race track, and wager on live racing events,” he wrote
The distance between the old grandstand and the current pari-mutuel wagering area “is roughly the same as it was” before the grandstand was torn down, Stevenson wrote.
But now, some portions of the walkway between the outdoor wagering area and the indoor facility are not covered.
That’s not a problem, Stevenson decided.
“The casino remains where it was in 2010. The wagering area on the racetrack apron has not moved. The only change in the Calder facility is the demolition of the grandstand building,” the judge wrote. “The entire property remains under the control of Calder. Nothing obstructs passage between the casino and any other portion of the Calder property.”
The controversy over the razing of Calder’s grandstand shines a light on the changing nature of Florida’s pari-mutuel industry, where South Florida tracks almost a century ago drew some of the nation’s most-glamorous celebrities and notorious underworld figures.
But the attendance numbers cited in the Calder case, and its operators’ decision to tear down the grandstand, indicate that the heyday of Florida’s horse and dog tracks and jai alai frontons is a thing of the past.
Slot machines, approved by voters, were originally intended to supplement the activities of pari-mutuels, according to a history of Florida gambling included in Stevenson’s ruling Tuesday. Slot machines are only allowed at pari-mutuels in Miami-Dade and Broward counties.
Calder’s grandstand, built in 1971, “was approximately 420,000 square feet, seven stories tall and seated approximately 15,575 people,” Stevenson noted.
But Calder’s live-racing attendance and revenues began to drop in 2004, and by 2013, attendance at the track’s races had plummeted to 118,000, or an average of 439 per day, just a fraction of the 3,351 daily attendance in 2004.
By 2013, Calder “was losing more than $5 million per year on its pari-mutuel activities,” according to the court documents.
The following year, the track “decided to cut its losses by demolishing the grandstand building,” Stevenson wrote.
Slots were intended to “support and enhance Florida’s horseracing, greyhound racing, and jai alai industries,” he wrote.
“Now, at least at Calder, the tail is wagging the dog: casino revenues far outstrip live thoroughbred racing revenues,” Stevenson wrote.
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