Survival of Miami Gambling: Magic City Casino & Hialeah Park

The reopening of the historic Hialeah Park Race Track on November 28, eight years after owner John Brunetti closed it to the public, drew a huge overflow crowd of 26,874; in the next two days, however, that number thinned to a mere 4,305 and then 1,193. But the declining crowds did not bother Brunetti, who said the resumption of racing at Hialeah was just “the means to an end”, the end being permission from the state to open a casino. Such permission is a privilege doled out to South Florida’s struggling parimutuels, which have withered in the face of competition from other forms of gambling in the state such as the Florida Lottery, Indian-run casinos and the increasingly popular Internet poker sites. The question is: can Vegas-style slots casinos really reverse the parimutuels’ declining fortunes? Various tracks and frontons are betting that they can.

The latest parimutuel to take the plunge is the Calder Race Course, which had been rushing to complete an $85 million casino in time for the Super Bowl, which kicked off on February 7 at the adjacent Sun Life Stadium (formerly known as Joe Robbie Stadium and Dolphins Stadium). But other establishments that have already jumped in ahead of Calder and Hialeah are reporting mixed results, calling into question the familiar adage: ‘the house always wins’. Some of the parimutuels have already scaled back their plans to build lavish gambling palaces.

The Opening of Magic City Casino

The November 10 formal opening of the Magic City Casino, owned by Flagler Dog Track, brought Miami’s movers and shakers out in force, evoking the glamour of the days when members of the Rat Pack – Frank, Sammy, Dean et al – visited the track. Speaking before a cheering crowd, newly-elected Miami Mayor Tomás Regalado crowed about the 500 new jobs the casino created with “no public funds!” Unfortunately, the euphoria has subsided since then; while gamblers still flock to the new slots, income per machine has dropped by half since Magic City’s soft opening in October.

Marc Dunbar, an instructor in parimutuel law at Florida State who is also an expert in gambling, said that while new casinos would enjoy flashy openings, “the reality of the marketplace” would soon bring them down to earth. And the reality is that competition in the gaming market is fiercer than ever, with the Seminole Tribe’s hugely successful casino operation in the Hollywood reservation going head to head with parimutuels/casinos operating in the Miami/Dade and Broward area.

Adrian Segredo, 33, a gambler unwinding over a cocktail at Magic City on Friday night, commented that the Seminole Hard Rock had live entertainment, “where this [Magic City] doesn’t have it.” What Flagler does have is in-the-neighborhood convenience – and of course, dogs. By law, greyhound racing must continue to be held at the parimutuels in order to justify their gambling license, although the crowds continuing to attend such races are sparse. Still, management claims that while they have no exact figures, the coming of the slots has filled more grandstand seats. Some patrons also prefer to take in the races from the comfort of the air-conditioned casino, where a window offers a railbird’s view of the track.

Flagler is also hoping to entice patrons into placing a bet or two with various promotions, including Thursday Doggie Dinner Theater, which features dancing waitresses and food specials, as well as offering giveaways, and Tuesday Doggie Bingo, where patrons connect the results of the day’s races on a free bingo card in hopes of scoring a winning bingo.

Still, it remains uncertain if slots can lift the fading fortunes of a racetrack and its workforce. Horsemen employed at Pompano Park raised a $100,000 campaign to help win approval from voters in 2004 for ‘racinos’, only to claim afterwards that the racing track reneged on its promise to increase measly purses.

There have been no similar protests at Magic City since Vice President Isadore Havenick said that the overall operation is profitable. And yet, there are indications that all is not well. The casino has indefinitely postponed its planned $90 million second phase – which would have featured a nightclub, multiple restaurants and an amphitheater. Instead, Magic City is opting for a smaller expansion which would simply add an additional 150 to 200 new slot machines. Havenick attributed the second phase’s delay to the high tax rate the state levies on slots – which amounts to half of every dollar made.

While Florida legislators attempted to cut down the rate to 35% earlier in the year, such moves were stalled after the legislature, the Seminole tribe, and the governor, failed to come to terms on an Indian gaming compact. The stalemate also threatened Hialeah Park’s large-scale redevelopment.

The Redevelopment of Hialeah Park Race Track

Brunetti said that the park’s future survival as a racing venue hinges on lawmakers allowing stocks and thoroughbred racing – as opposed to the quarter-horse sprint-style races that are currently permitted at the track. He hopes to use revenues from slots to fund a massive redevelopment of Hialeah that would encompass a two-story casino, a hotel, and non-gambling establishments such as a multiplex cinema and bowling alley. The project would take seven to ten years to complete and cost one billion dollars; Brunetti said the redevelopment would funnel substantial amounts of money into the local economy, likening it to “building Hoover Dam during the Depression”. And indeed, casinos are just about the only things still being built in a moribund economy where most other construction projects in South Florida are at a standstill.

“We put hundreds of people to work,” Calder spokesperson Michele Blanco said. “That’s a good-news story.”

Magic City Casino is found at 450 NW 37th Avenue in Miami, Florida USA and Hialeah Park Race Track is found at 2200 E 4th Ave in Hialeah, Florida USA.

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