Betting on Casinos in Miami
Will Miami be the next American tourist city to have mega casinos? The short answer – not yet. Since 1978, various casino ventures have tried to promote casino tourism in Miami. So far, all efforts have fallen short. Malaysian casino operator Genting Group purchased the downtown Miami Herald Building for $236 million last May. Including the Miami Herald purchase, Genting has invested nearly $500 million in Miami real estate in recent years.
Last week, the Miami casino bill was withdrawn in the Florida legislature. It won’t be taken up again until the 2013 session. Nick Iarossi, a lobbyist for Las Vegas Sands, says the bill would have failed in committee by one vote. Why did the Miami casino bill fail? First, Florida has a conservative legislature. Tallahassee is an 8 hour drive from Miami. Northern Florida (“the panhandle”) is culturally distant to South Florida’s liberal atmosphere. Genting will have to learn how to reach out to legislators from Florida’s more conservative central and northern regions.
The second reason is obvious – competing interests. Disney, Carnival Cruise Lines, Seminole tribes (who own the Hard Rock Cafe & Casino in Fort Lauderdale), horse and dog tracks, and not to mention Jai-alai don’t want additional competition. In fact, the only type of gambling currently not in South Florida is the mega casino. Genting owns 50% of Norwegian Cruise Lines, which operates out of the Port of Miami.
Genting’s spectacular promises didn’t help their cause. Genting promised to invest $3.8 billion, create 45,000 new jobs in a city struggling with 10.2% unemployment, non-stop flights from Miami to Asia, $1.7 billion in new state revenues, and the purchase of thousands of Disney World tickets. Perhaps next year, Genting will pare down estimates.
Miami’s economy is largely based on tourism and real estate. The real estate market will take years to recover and tourism just isn’t enough. South Florida doesn’t have a hi-tech hub like Boston or San Francisco. Miami’s multitude of sports franchises is nice, but an economy is not built on Heat, Dolphins, and Marlins. As long as Miami doesn’t have a strong economic anchor, casino conglomerates will try and try again to bring casinos to the shores of South Florida.
There is one thing both proponents and opponents of casinos in Miami agree on – the current battle is not over. “This is round 1,” says Dan Gelber, chairman of the No Casino advocacy group that fought the bill. Jessica Hoppe, a senior vice president at Genting agrees. She said in a statement that the company remains “committed to the vision of world-class destination resorts in the South Florida community.”
Stay tuned next year for round two of the battle for Miami casinos.