REVENUE ESTIMATING CONFERENCE TAX: Electronic Gaming Machine Tax ISSUE: Electronic Gaming Machines allowed in certain pari-mutuel facilities BILL NUMBER(S): PCS/SB836 SPONSOR(S): Regulated Industries Committee and Senators Jones and King MONTH/YEAR COLLECTION IMPACT BEGINS: Contingent on execution of Indian Gaming Compact DATE OF ANALYSIS: March 26, 2009

SECTION 1: NARRATIVE a. Current Law: Electronic Gaming machines are not allowed in the state.

b. Proposed Change: Electronic gaming machines playing games are allowed in certain pari-mutuel facilities. An eligible licensee must have conducted a full schedule in 2007, and be licensed to operate a cardroom, or become eligible in the future by running a full schedule in two consecutive years. A facility which has slot machines may not have electronic gaming machines. Up to 1,000 machines per location are allowed. Hours of operation are 18 per day Monday through Friday and 24 per day Saturday, Sunday, and holidays. The tax rate is 35% with the proceeds going to the Educational Enhancement Trust Fund (no General Revenue Service Charge imposed). In order to operate, each licensee must pay an annual license fee of $1.0 million and an annual fee of $250,000 for an addictive prevention program. Occupational licenses are also required, with a maximum charge of $50 for an employee of the licensee and $1,000 for non-employees of the licensee providing goods or services to the licensee. (sections 1 through 25) Any proceeds from facility and occupational license fees not necessary for the funding of the division’s electronic gaming machine regulation operations will be transferred to the General Revenue Fund (section 32).

SECTION 2: DESCRIPTION OF DATA AND SOURCES Results of the February, 2009 Slot Machines conference

SECTION 3: METHODOLOGY (INCLUDE ASSUMPTIONS AND ATTACH DETAILS) See attached SECTION 4: PROPOSED FISCAL IMPACT

State Impact: FY 2009-10 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 All Funds Annualized Cash Cash Cash Cash High Middle—Gaming Machine Tax 138.8 17.4 59.4 104.1 138.8 Licenses 20.0 5.0 15.0 15.0 20.0 -8.5 -1.1 -4.3 -6.4 -8.5 Slot Machines Tax -5.2 -.7 -2.6 -3.9 -5.2 Sales Tax -14.3 -1.8 -7.1 -10.7 -14.3 Low

SECTION 5: CONSENSUS ESTIMATE (ADOPTED 3/30/09) The conference adopted the proposed estimate, contingent upon the compact being approved or deemed approved by the U.S. Department of the Interior, and published in the Federal Register by July 1, 2009.

FY 2009-10 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13 Annualized Cash Cash Cash Cash General Revenue Sales Tax (12.7) (1.6) (6.3) (9.5) (12.7) General Revenue Service Charge 1.5 .4 1.1 1.1 1.5 State Trust, Sales Tax (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) EETF 125.1 15.6 52.5 93.8 125.1 Pari-mutuel Wagering Trust Fund 18.5 4.6 13.9 13.9 18.5 Total State Impact 132.4 19.0 61.2 99.3 132.4 Revenue Sharing (.4) (.1) (.2) (.3) (.4) Local Government Half Cent TF (1.1) (.1) (.6) (.8) (1.1) Local Option Sales Tax (1.2) (.2) (.6) (.9) (1.2) Total Local Impact (2.7) (.4) (1.4) (2.0) (2.7) Total Impact 129.7 18.6 59.8 97.3 129.7

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CS/SB836 Electronic Gaming Machines (EGM's) in Pari-mutuel Facilities (Class II, Bingo only) Maximum of 1,000 Machines Per (non-slots) Facility, 35% to EETF

Fully implemented, full year High level activity Lower level activity Total all Cash Estimates facilities facilities Facilities Electronic Gaming Machines per location 1,000 500 Cash Estimate 2009-10 Net machine income/machine/day (1) $95 $95 13% 1/4 licensees for half year Net machine income/facility $34,492,500 $17,246,250 Total EGM tax $17,354,039 % EGM tax 35% 35% Tax per facility $12,072,375 $6,036,188 Lottery -$1,067,273 Number of facilities (2) 7 9 Slot Machines Tax -$650,776 Sales tax -$1,784,987 Total tax $84,506,625 $54,325,688 $138,832,313 Net Revenue from EGM's $13,851,002

Lottery -$5,197,157 -$3,341,030 -$8,538,187 License Fees $5,000,000 Slot Machines Tax -$3,168,998 -$2,037,213 -$5,206,212 Sales tax -$8,692,110 -$5,587,785 -$14,279,895 2010-11 50% 1/4 licensees for full year, 1/2 for half year Net Revenue from EGM's $67,448,359 $43,359,659 $110,808,019 Total EGM tax $69,416,156

Lottery -$4,269,094 Annual license fees $7,000,000 $9,000,000 $16,000,000 Slot Machines Tax -$2,603,106 Addictive Gambling Fees $1,750,000 $2,250,000 $4,000,000 Sales tax -$7,139,948 Occupational Licenses Indeterminate Indeterminate Indeterminate Net Revenue from EGM's $55,404,009

Assumed source of spending License Fees $15,000,000 % from tourists/non-taxable spending 25.0% 25.0% % from spending subject to Sales Tax 60.0% 60.0% 2011-12 % from current Lottery 7.5% 7.5% 75% 3/4 licensees for full year % from Slot Machines 3.8% 3.8% Total EGM tax $104,124,234 % from Indian Gaming 3.8% 3.8% % blended EETF contribution rate estimated 09-10 28.7% 28.7% Lottery -$6,403,640 % slot machines tax rate 35% 35% Slot Machines Tax -$3,904,659 % sales tax rate 6% 6% Sales tax -$10,709,921 Net Revenue from EGM's $83,106,014 (1) Income per machine per day has been reduced to 75% of the slots level due to class II machines, and further reduced by another 10% due to bingo games only License Fees $15,000,000

(2) Currently 17 facilities would be eligible, including Dania in Broward County since they do not have slots currently. 2012-13 These figures assume that Dania would choose slot machines over electronic gaming machines, and that all other eligible facilities 100% all licensees for full year would choose to become licensees for electronic gaming machines Total EGM tax $138,832,313 Summer Jai-Alai and Summersport Jai-Alai could would be able to move to another location and become eligible Ocala Breeder Sales could potentially become eligible should they open a cardroom Lottery -$8,538,187 There are three more facilities which would need to get voter approval for cardrooms before they would be eligible Slot Machines Tax -$5,206,212 There are 14 more permits (active & inactive) issued which could result in more facilities after 2 years if the permit-holders Sales tax -$14,279,895 begin to conduct a full schedule of live races/games in 2009 Net Revenue from EGM's $110,808,019

License Fees $20,000,000 Potential Electronic Gaming Facilities

Total Handle Paid from Live Cardroom Attendance Rank Performances Rank Revenues Rank Daytona Kennel club 147,081 3 14,391,041 8 760,344 4 Derby Lane 3,446 11 50,267,052 3 817,141 3 Ebro Greyhound Park 32,953 6 4,306,638 10 344,341 9 Fort Pierce Jai Alai - 369,698 13 168,283 13 Hamilton Jai Alai - 4,570 16 209,735 12 Jefferson County Kennel Club 27,160 8 2,272,817 12 141,185 14 Melbourne Greyhound Park 21,157 10 364,382 14 591,719 6 Naples Fort Myers Greyhound 255,495 1 37,108,720 4 657,036 5 Ocala & Jai Alai - 219,573 15 103,283 15 Orange Park Kennel club 24,563 9 22,119,176 7 243,224 11 Palm Beach Kennel Club 220,086 2 89,196,982 2 1,088,428 1 Pensacola Greyhound Track - 3,314,680 11 Sarasota Kennel Club 145,858 4 12,082,481 9 588,277 7 St. Johns @ Bayard Raceway 28,853 7 36,975,703 5 922,580 2 Tampa Bay Downs 139,683 5 127,568,889 1 466,596 8 Tampa Greyhound Track - 29,866,381 6 260,988 10