DESTINATION RESORT ACT --- SB 710
Key Definitions --(4) “Destination resort” or “resort” means a freestanding, land-based structure in which limited
gaming may be conducted. A destination resort is a mixed-use development consisting of a
combination of various tourism amenities and facilities, including, but not limited to, hotels, villas,
restaurants, limited gaming facilities, convention facilities, attractions, entertainment facilities,
service centers, and shopping centers. [Page 41, same as 2011]
(8) “Gross receipts” means the total of cash or cash equivalents received or retained as winnings by a
resort licensee and the compensation received for conducting any game in which the resort licensee is
not party to a wager, less cash taken in fraudulent acts perpetrated against the resort licensee for
which the resort licensee is not reimbursed. [Page 42, same as 2011]
o The term does not include promotional credits or “free play” as provided by the resort
licensee as a means of marketing the limited gaming facility.
o The term does not include the amount of any credit extended until collected.
Oversight --Elimination of the DBPR’s Division of Pari-mutuel Wagering and the creation of the Department of
Gaming Control headed by the State Gaming Commission.
A. Generally, may impose administrative fines of not more than $10,000 for each count or
separate offense, except as otherwise provided. The payments will be credited to the General
Revenue Fund. The Destination Resort Act provides that fines for violation of that act may
not exceed $250,000 per violation.
B. The new Department must contract with the Department of Revenue to perform the tax
collection and financial audit services for any taxes required to be collected.
C. The Commission has special emergency rulemaking power.
Mechanism --The Commission shall use an Invitation to Negotiate process. [Page 56] The commission will
select from competing applicants the applicant that “best serves the interests of the residents of
Florida, based on the potential for economic development presented by the applicant’s proposed
investment in infrastructure, such as hotels and other nongaming entertainment facilities, and the
applicant’s ability to maximize revenue for the state.” Up to three successful applicants are given
licenses which allow them to operate and maintain a destination resort having a limited gaming
facility.
Location --The commission shall authorize limited gaming at three destination resorts. The Commission
“may specify in its invitation to negotiate the county in which the facility would be located.”
The application must contain documentation that shows the applicants have received “conceptual
approval” for the destination resort proposal from the municipality and county in which the
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resort will be located, as well as include a map of the location. The Commission may award a
resort license for a county only if a majority of the electors in a countywide referendum have
approved the conduct of “slot machine gaming” or a majority of the electors voting in a
countywide referendum have passed a referendum allowing for limited gaming, and proof that
this has occurred is provided in the application. [Pages 55, 56, 62 and 64]
Limited Gaming --(20) “Limited gaming,” “game,” or “gaming,” as the context requires, means the games authorized
under this part in a limited gaming facility, including, but not limited to, those commonly known as
baccarat, twenty-one, poker, craps, slot machines, video gaming of chance, roulette wheels, Klondike
tables, punch-board, faro layout, numbers ticket, push car, jar ticket, pull tab, or their common
variants, or any other game of chance or wagering device that is authorized by the commission.
[Page 44, essentially the same as 2011]
Miscellaneous -- Age: 21 to engage in gaming
 Hours: 24 hours per day, every day of the year
 Payout: 85 percent for each slot machine
 Wagers: minimum and maximum wagers on all games set by resort licensee
 Credit Instruments: allowed
Timing --Quarters refer to Calendar Years.
 The State Gaming Commission Nominating Committee must submit recommendations for
the initial appointments to the State Gaming Commission to the Governor within 60 days
after becoming law. The Governor then has 60 days to select among the nominees. [120 days
or 4 months before the State Gaming Commission is in place. Assuming the bill becomes
law on April 1, 2012, this would be July 29, 2012]
 The initial meeting of the commission must be held within thirty days of July 1, 2012.
[First Commission meeting is assumed to be July 30, 2012.]
 The Invitation to Negotiate must be issued no later than 90 days after the date of the
Commission’s first meeting. [Approximately October 26, 2012 --- a little more than one
quarter later than 2011 bill, but much quicker pace]
 Proposals in response to the Invitation to Negotiate must be received within 90 days after
issuance. [Assume receipt by January 24, 2013 --- roughly equivalent to the date assumed
for the 2011 bill]
 The Commission shall award or deny a destination resort license within 90 days after the
deadline for the submission of a reply. [Assume April 24, 2013 --- which is slightly more
than two quarters earlier than assumed for the 2011 bill]
 Construction Phase of 8 quarters or 2 years. [Assume begins Q3 of 2013 which is the
beginning of FY 2013-14 and ends the last day of Q2 of 2015 which is the end of FY
2014-15; language directs the Commission to give preference to applicants who can
begin construction no later than 12 months after the award of the resort license]
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
Operations commence immediately after construction phase ends. [Assume begin Q3 of
2015, the start of FY 2015-16]
State Revenues (assuming the required timeline can be met) --A. Nonrefundable Application Fee of $1 million to the Commission to defray costs
(nonrecurring) --- [Assume Q1 of 2013 which is in FY 2012-13; benefit to State Trust;
limited participation due to significant financial barriers to entry --- direct cost of the
application and licensing fees buttressed by the $2 billion requirement for new
development and construction]
LOW:
MIDDLE:
HIGH:
3 x $1 = $3 million (3 applications)
4 x $1 = $4 million (4 applications)
5 x $1 = $5 million (5 applications)
(e) The applicant must demonstrate that it has adequate capitalization to develop,
construct, maintain, and operate the proposed resort having a limited gaming facility...
[Page 57 --- Assume this is a binding criteria.]
B. One-Time Licensing Fee of $50 million (nonrecurring) --- [Assume availability in Q2 of
2013 which is in FY 2012-13; assignment unknown but assume State Trust based on
renewal placement]
LOW:
MIDDLE:
HIGH:
3 x $50 = $150 million (MAX)
3 x $50 = $150 million (MAX)
3 x $50 = $150 million (MAX)
(b) The application for a destination resort license must be submitted with a one-time
licensing fee of $50 million. If the commission denies the application, the commission must
refund the licensing fee within 30 days after the denial of the application. If the applicant
withdraws the application after the application deadline established by the commission, the
commission must refund 80 percent of the licensing fee within 30 days after the application is
withdrawn. [Page 67]
C. Annual Renewal License Fee of $2 million --- [Assume begins Q2 of 2014 which is in
FY 2013-14; benefit to State Trust (Destination Resort Trust Fund)]
LOW:
MIDDLE:
HIGH:
3 x $2 = $6 million (MAX; see above)
3 x $2 = $6 million (MAX; see above)
3 x $2 = $6 million (MAX; see above)
D. Gross Receipts Tax --- [Assume construction phase of 24 months which indicates no
earlier than Q3 of 2015, placing first receipts in FY 2015-16; tax rate is 10% of the gross
receipts] NOTE: First Year estimates reflect 12 months of activity.
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LOW:
3 x $326.7759 = $980.3277 million in Total Gross Receipts
$980.3277 million x 10% = $98.0 million in Total Taxes
3 x [Avg gaming revenue per Indian Gaming Facility in FL 2009 x
5% growth per year (2010, 2011, 2012, 2013, and 2014)]
MIDDLE:
3 x $501.5668 = $1,504.7 million in Total Gross Receipts
$1,504.7 x 10% = $150.5 million in Total Taxes
3 x maximum revenue for high competition
HIGH:
3 x $699.8960 = $2,099.6881 million in Total Gross Receipts
$2,099.6881 x 10% = $210.0 million in Total Taxes
3 x maximum revenue for low competition
(k) Limited gaming may not be conducted by a resort licensee until the resort is completed
according to the proposal approved by the commission. [Assume that the $2 billion can be
staged over the five years in the proposal, so that the resort licensee can begin at a phase prior
to having all $2 billion in construction for all ancillary facilities completed.] [Page 75]
(b) The area in which the conduct of limited gaming is authorized may constitute no more
than 10 percent of the resort development’s total square footage. The resort development’s
total square footage is the aggregate of the total square footage of the limited gaming facility,
the hotel or hotels, convention space, retail facilities, nongaming entertainment facilities,
service centers, and office space or administrative areas. [Page 57]
A portion of this data was pulled from the Casino City’s Indian Gaming Industry Report ~
2011 Edition. They define gaming revenue as follows: “Gaming revenue is defined as all
revenue earned from Class II and Class III gaming. It is measured on a calendar-year basis
and equals the total amount wagered minus prizes and payouts. It also excludes gaming
promotional allowances to the extent possible (if gaming promotional allowances were
included in gross gaming revenue yet not identifiable, they could not be subtracted out).
Gaming revenue as defined in this report is sometimes also referred to as net win, gross
gaming revenue, or adjusted gross gaming revenue.”
Distribution of Gross Receipts Tax --(a) The gross receipts tax shall be deposited into the Destination Resort Trust Fund and
shall be used to fund the operating costs of the department pursuant to appropriations by
the Legislature. [Page 77]
(b) On June 30 of each year, all unappropriated funds in excess of $5 million shall be
deposited into the General Revenue Fund. [Page 77]
[Assume that license fees plus $5 million are sufficient to fund the operations of the
department, so 100% minus $5 million of annual gross receipts collections are deposited
into the General Revenue Fund at midnight on June 30th of each collection year, making
them available for expenditure on July 1st of the subsequent fiscal year. The first
distribution to the General Revenue Fund would not be available for expenditure
purposes until FY 2016-17]
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E. Compact Loss --- The REC has adopted a forecast of expected revenues from the Indian
Gaming Compact. The forecast contains a decrease in projected Compact payments
beginning in FY 2015-16 that is related to the anticipated loss of table games. [Assume
Compact payments continue until the first destination resort begins operations and then
cease entirely as at least one destination resort is authorized outside of Miami-Dade or
Broward counties. Timeframe will permit a referendum(s) to be held prior to application
deadline.]
FY 2011-12
FY 2012-13
FY 2013-14
FY 2014-15
FY 2015-16
FY 2016-17
FY 2017-18
$150.0 million --- $145.5 GR --- NO Impact
$226.1 million --- $221.2 GR --- NO Impact
$233.0 million --- $226.0 GR --- NO Impact
$233.9 million --- $226.9 GR --- NO Impact
$ 99.4 million --- $ 96.4 GR --- 100% Loss
$ 99.4 million --- $ 96.4 GR --- 100% Loss
$ 99.4 million --- $ 96.4 GR --- 100% Loss
100.342 Notice of special election or referendum.—In any special election or
referendum not otherwise provided for there shall be at least 30 days’ notice of the
election or referendum by publication in a newspaper of general circulation in the county,
district, or municipality, as the case may be. The publication shall be made at least twice,
once in the fifth week and once in the third week prior to the week in which the election
or referendum is to be held. If there is no newspaper of general circulation in the county,
district, or municipality, the notice shall be posted in no less than five places within the
territorial limits of the county, district, or municipality. [emphasis added]
Page 39 of the Compact states:
And, Page 40 states:
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F. Compulsive or Addictive Gambling Prevention Regulatory Fee (annual) --- [Assume begins
Q3 of 2015, the start of FY 2015-16, with the commencement of operations; State Trust]
LOW:
MIDDLE:
HIGH:
3 x $250,000 = $750,000 (MAX; see above)
3 x $250,000 = $750,000 (MAX; see above)
3 x $250,000 = $750,000 (MAX; see above)
G. License to Sell or Serve Alcoholic Beverages for Consumption on the Premises (annual) --Resort licensees must pay an annual license fee of $50,000 for a special state alcoholic
beverage license and may serve alcohol 24 hours per day, every day of the year.
[Assume begins Q3 of 2015, the start of FY 2015-16, with the commencement of
operations; State Trust]
LOW:
MIDDLE:
HIGH:
3 x $50,000 = $150,000 (MAX; see above)
3 x $50,000 = $150,000 (MAX; see above)
3 x $50,000 = $150,000 (MAX; see above)
H. Supplier’s License (annual) --- The Commission must establish a scale of fees based on the
type of service but may not exceed $25,000 per year; indeterminate positive number to State
Trust; could begin FY 2013-14 with construction.
I. Occupational License (4-Year) --- May not exceed $250 per employee; indeterminate
positive number to State Trust; could begin FY 2013-14 with construction.
J. Gambling Business License (annual) --- The bill appears to require any person who allows
gambling to occur on their property to get a gaming license from the department – could
potentially include fraternity houses when they engage in poker nights, bingo halls,
Internet cafes, arcade amusement centers, lottery retailers, etc. The department shall fix
the fee in an amount sufficient to meet the costs of carrying out its licensing,
enforcement, and administrative responsibilities, but in an amount not to exceed $5,000.
The impact is positive indeterminate (unknown universe and unknown fee level) to State
Trust (proceeds to the Destination Resort Trust Fund). Assume effective July 1, 2012.
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K. Sales Tax associated with $2 billion Construction Requirement (nonrecurring) --- [Assume—
but for the bill—there will be no construction of destination resorts. Also assume that the $2
billion requirement is a binding criteria on all applicants, and that each licensee has the full
five years to comply with the dollar requirement. And assume that the section below
excludes the cost of the property upon which the destination resort is built, as well as
furnishings and gaming equipment.]
(h) The applicant must demonstrate that it will expend at least $2 billion in new
development and construction of the proposed destination resort following the award of a
license, excluding any purchase price and costs associated with the acquisition of real
property on which to develop the destination resort. Such expenditure must in aggregate
be completed within 5 years after the award of any such license. [Page 58]
LOW:
MIDDLE:
HIGH:
$11.6 million YR1; $18.5 million YR2; $9.0 million YR3
$23.1 million YR1; $13.9 million YR2; $4.1 million YR3
$23.1 million YR1; $13.9 million YR2; $6.8 million YR3
L. Sales Tax associated with Tourism (annual) --- Previous work developed by EDR to analyze
the proposed $3 billion resort expansion originally anticipated by the Seminole Tribe as part
of the Compact negotiations suggested that there would be significant churning of existing
tourist and convention activity associated with any new expansion. See EDR website at the
following links:
http://edr.state.fl.us/Content/presentations/gaming/IndianGaming_Issues&Concerns.pdf
http://edr.state.fl.us/Content/presentations/gaming/IndianGaming_Addendum.pdf
http://edr.state.fl.us/Content/presentations/gaming/IndianGaming_EconomicImpactAnalysis.
pdf
The results of that analysis indicated that there would be a total minimum shift in overall
activity as follows:
$
$
$
Low Dollar Value
High Dollar Value
Avg Dollar Value
58,399,741 $
61,451,093 $
59,925,417 Convention-Related Cannibalization
36,939,250 $
38,869,304 $
37,904,277 Leisure-Related Cannibalization
95,338,991 $
100,320,397 $
97,829,694 Total Business Shift
However, the net sales tax number (new collections minus churning elsewhere in the state) is
expected to be positive indeterminate based on three factors: (1) Florida residents who would
have travelled outside the state for a gambling experience who now choose to remain in-state;
(2) new tourists who would have selected a domestic location outside the state for a gambling
experience who now choose Florida; and (3) new international tourists (particularly Latin
American) who would not have come at all to Florida—or the United States—who now come
to gamble. All of these factors would lead to an infusion of new taxable activity. In support
of (2) and (3) above, the Bernstein Research note dated October 24, 2011, indicates that
Florida “...has the potential to pull 15% of the business from Las Vegas.” Because the
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ultimate business plans and locations are currently unknown, it is not possible to develop a
reliable estimate—that is, suitable for use within the appropriations process—for the net sales
tax gain from added tourism at this time.
M. Slots Tax Losses Associated with Cannibalization (annual) --- There will be slots tax losses
associated with the increased gambling opportunities that cannibalize from existing activity.
Fundamentally, the state loss is attributable to the lower tax rate that will be assessed at the
destination resorts (10% at the destination resorts instead of 35% for existing slots activity).
However, the calculation takes the form of an offset that should be applied against the gain
from the new Gross Receipts Tax to derive a net increase once cannibalization has been taken
into account. While the market for the new destination resorts is different and geared more to
tourists than to local activity, the Bernstein Research note dated October 24, 2011, indicates
that approximately 30% of the play in Singapore is from locals. However, there are no
alternative gaming opportunities in that location. Further, it seems most reasonable to
assume that the greatest loss due to cannibalization will be against the most comparable
competitor---the Indian gaming facilities. Because this analysis assumes that all Compact
payments will cease, this loss has already been addressed—albeit for another reason. It
should also be noted that there are steps that the destination resorts can take to discourage the
volume of purely local play (location, dress codes, cover charges, parking charges, etc.), but
it is currently unclear to what extent this will occur—or even if this chilling effect would be a
desired outcome by the resorts. For the purposes of this analysis, it is assumed that the entire
cannibalization affect on existing gaming activity is 20%—17 percentage points from the
Indian gaming facilities and 3 percentage points from the existing slots facilities. Note that
the middle estimate implies a total loss of 10.3% of the projected activity in FY 2012-13 at
the slots facilities, and approximately13% of the assumed activity in FY 2012-13 at the
Indian Gaming facilities.
LOW:
MIDDLE:
HIGH:
($2099.9688*0.35)*.03 = $22.0 million offset from Slots
($150.4700*0.35)*.03 = $15.8 million offset from Slots
($98.03278*0.35)*.03 = $10.3 million offset from Slots
N. Property Tax Associated with $2 billion Construction Project (annual) ---There will be
increased property taxes associated with a $2 billion project for the host communities;
indeterminate positive number to Local since sites are unknown; would probably first affect
the 2016 tax roll. Generally, multi-phased projects are added to the rolls in stages, after each
certificate of occupancy is given. However, a property appraiser can place a property
improvement on the roll if it is substantially complete in his/her judgment even without a
certificate of occupancy. If the improvement does not meet the criteria of being
"substantially complete" on January 1 it is not placed on the roll until the following year. See
s. 192.042, F.S., s. 193.011, F.S., and s. 193.1554, F.S.
O. Documentary Tax Associated with Land Purchase (nonrecurring) --- There may be increased
documentary stamp taxes associated with the land purchase; however, the impact is positive
indeterminate since the sites and footprints are unknown; it is also known that some of the
land has already been purchased by the prospective applicants.
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M. Service charge implications are not mentioned in the bill, but all trust funds benefiting from
the implementation of destination resorts are assumed to be exempt to that extent.
P. Surety Bond --- [Indeterminate amount prior to the license being delivered; zero impact]
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