Decoupling Sparks Fly at FL Gaming Hearing

The prospect of “decoupling” is of paramount interest to Thoroughbred stakeholders in Florida. But it occupies just a tiny portion of a sweeping 20-year agreement known as the Seminole Gaming Compact that is currently being debated by the Florida Senate Regulated Industries Committee before potential renegotiation, tweaking or approval by the state legislature.

Last week, when the committee first began vetting the compact at a public hearing, decoupling–which is essentially a clause in the plan to allow Florida's pari-mutuel licensees to drop live racing while still remaining open as casino facilities–barely came up in the discussion.

But Wednesday, the controversial topic percolated near the top of the committee's hearing on the compact, which was strictly limited to two hours of testimony.

Not surprisingly, Thoroughbred owners, breeders, and trainers vociferously argued against the inclusion of decoupling in the interest of preserving racetracks, and by extension, Florida's equine and agricultural interests. Casino entities, just as vigorously, lobbied in favor of it, framing the argument as a freedom-of-choice issue that would allow pari-mutuel gaming licensees to do as they pleased with their properties.

Yet a mild surprise seemingly occupied the middle ground in the testimony, and it came from a representative of The Stronach Group, the owner of Gulfstream Park.

Marc Dunbar, a longtime gaming lobbyist who has specialized in Florida betting laws for several decades, told the committee that while last year The Stronach Group, “certainly stood with the breeders and opposed decoupling,” Gulfstream Park was now ready and willing to fill the void that would be created if decoupling went forward as proposed and several existing racinos chose to leave the horse racing business.

Dunbar, to be clear, did not outright say that The Stronach Group was in favor of decoupling. But his testimony indicated that Gulfstream is actively laying the groundwork to snag any available racing dates that decoupling might create.

“I just want to let everyone know that we feel like we have a pretty good framework for a [compact] agreement, whereby the racetracks that want to decouple can decouple, and The Stronach Group will step in and maintain the level of racing that's currently required under the statute,” Dunbar said. “The Thoroughbred industry has been working really hard over the last year with a number of the folks in the slot machine coalition and the card rooms around the state to try and see if we could come up with a structure where, at least on the horse racing side, Gulfstream Park would maintain the racing, allow Calder and Hialeah and others to uncouple, and make sure that the horse breeders and the horse owners of the state are taken care of.”

Dunbar's testimony did not draw any sort of response from the Thoroughbred-related speakers who followed him to the podium. In general, the “no decoupling” entities seemed content to focus on making sure the committee members realized that the interests of horsemen were vastly different from the wants and needs of racinos.

“We're all about the agricultural segments. Even though we are part of the pari-mutuel process, we, just like any of the horsemen, are not the pari-mutuel [licensees],” testified Lonny Powell, the chief executive officer of the Florida Thoroughbred Breeders' & Owners' Association. “There's myriad reasons that decoupling is a major threat on our industry. But our message remains simple: Please say no to decoupling….It's a gambling expansion, and it works against jobs and economic growth.”

Powell continued: “I wonder, at the end of the day, after eight years of the compact [potentially] being in place, if [decoupling would be] a net plus, or if you consider the fact that this whole industry could crumble based on decoupling, if it's actually a net loss.”

Donn Mitchell, the chief administrative officer for Isle of Capri Casinos, spoke in favor of decoupling on behalf of the South Florida Gaming Association, which counts among its members the racinos at Calder Casino and Hialeah Park.

“In order to compete, we must be allowed to eliminate the losses that we're currently forced to incur from live racing,” Mitchell testified. “Yes, I'm talking about decoupling. I want you to understand decoupling does not mean elimination of racing. Decoupling means allowing businesses to make a decision to stop unprofitable portions of their business. The operations that make money [from racing] will continue to race, and frankly, we would argue, would become stronger as there is a more competitive racing product in the state. Decoupling will allow us to free up cash and land resources for further productive investment in assets that will create more tax revenues and jobs in the state.”

Powell, though, had earlier broached the question of why decoupling is even part of the compact at all.

“Why is it even part of the discussion?” Powell asked. “Since the Seminole CEO [testified last week that] they have 'zero position' on decoupling, and the fact that [owners and breeders] were never included in the conversation with anybody, why do we need to advance the concept? Please simply drop decoupling….You don't have to have it. The tribe doesn't want it. They say they don't care. And finally, if you don't like that idea, please consider putting 'no decoupling' in as a requirement and a provision of the compact.”

Three other Thoroughbred industry individuals also testified at Wednesday's hearing.

Stella Thayer, the president of Tampa Bay Downs, spoke for several minutes about the geographic “ground zero” competition that her non-slots track faces from Seminole gaming. But not once in her plea for parity in the gaming compact did she mention decoupling.

Bill White, the president of the Florida Horsemen's Benevolent and Protective Association, launched into what appeared to be a lengthy soliloquy about he role of the HBPA and the history of gaming in Florida. But the committee's chairman, Senator Rob Bradley, who had repeatedly asked speakers to limit their speeches during the time-constrained session, pressed White to sum up the HBPA's position in one brief sentence, which White hastily articulated as “We are against decoupling in any form.”

Laurine Fuller-Vargas, a third-generation breeder and trainer who currently has 40 Thoroughbreds at her Florida farm, was also politely, but emphatically asked by the chairman to truncate an impassioned personal story when it began to run long.

Fuller-Vargas closed her testimony by telling the chairman that she had collected signatures from some 3,000 people on a “no decoupling” petition.

Bradley acknowledged the gravity of the topic–and the intense anti-decoupling lobbying by members of the Thoroughbred community–by replying, “And I think I've received emails from all 3,000 of them.” @thorntontd