By Ryan Yousefi
By Chuck Strouse
By Terrence McCoy
By Terrence McCoy
By Terrence McCoy
By Michael E. Miller
By Kyle Munzenrieder
By Michael E. Miller
The renovated Magic City Casino opened this past November. The slots wing is by far the most expensive part of the renovation, Izzy says. At an approximate cost of $10,000 to $15,000 per machine, the games totalled $18 million.
There's a stark contrast here. The old clubhouse is a sterile, Muzak-friendly incubator for old-timers, while the casino is like a jukebox that syncopates to shrill computerized noise and a blitzkrieg of lights. This past March, a new wing of electronic blackjack machines opened at a cost of $3.5 million. New ads have appeared all over town: "Blackjack + Miami = Magic City."
All of that work didn't immediately translate to profit. Izzy Havenick claims the track has been barely breaking even. A ray of hope arose, though, when the state reached agreement on a pact with the Seminole tribe to gain money that would pay for deficits accrued because of the real estate meltdown.
450 NW 37th Ave.
Miami, FL 33125
Region: Central Dade
Years in the making, the pact allows the tribe to run more card games, such as baccarat and Vegas-style slots. In return, the Seminole guarantee the state at least $1.5 billion over the next five years.
A less noticed part of the pact will mean millions of dollars for the Havenicks and other pari-mutuels. It reduces the tax on slot revenue from 50 percent to 35 percent, rolls back the annual slots license to $2 million, and allows no-limit poker. It also extends card rooms' operating hours to 18 on weekdays and 24 on weekends. Just the tax break on the slots will generate at least $138 million, a whopping $32 million more than last year.
How did the deal get done? Lobbying helped. The Havenicks employ three lobbyists — Quinton Greene, Manny Prieguez, and Ron Book, or Ronnie, as Izzy calls him, who has been with the family since Izzy was 10 — for about $200,000 a year. In addition, pari-mutuels gave $1.6 million to political campaigns in 2008, according to the National Institute on Money in State Politics. Magic City donated the most of the Dade tracks: $96,500.
Legislators such as state Sen. Dennis Jones and House majority whip from Miami, Carlos Lopez-Cantera, were some of the main proponents of the tax break. Unsurprisingly, they were among the top ten recipients of political industry contributions in 2008, receiving nearly $100,000. "It's not a bone we're throwing them," says Lopez-Cantera, who received $15,500. "If they make money, we make money. It may not be the windfall they're expecting, but if the state doesn't suffer, I don't see the harm in it. If the state makes money and they make money, that's great. That's capitalism."
Because of the money guaranteed for schools, the measure was backed by the United Teachers of Dade and the Florida School Boards Association. In fact, the state legislature's office of economic research forecasts that more people will play slots — so the total amount received by the state will grow back to its current level of about $113 million annually by 2013.
Gov. Charlie Crist signed the measure into law last week — the day before he announced he would run as an independent for U.S. Senate. It takes effect in July. He called it "an example of elevating problem-solving over ideology."
But it's not that simple. Nathan Dunn, the lobbyist for the conservative group Florida Family Action, doesn't see it that way. "This is the largest expansion of gambling in Florida without the vote of the people," he says. "It's unfortunate the state didn't take further efforts to resolve their financial problems."
Miami-Dade Commissioner Katy Sorenson cast the sole vote against the slots referendum in 2007. "Casinos target the poor," she says. "They prey on people's problems rather than solving them, and I don't think they create great jobs." She adds the compact is one more "desperate" Band-Aid to remedy the state's flat-lining finances. "We're going to continue to cobble these solutions together that really aren't solutions."
The management office at Magic City Casino is a shabbier home away from home for Izzy Havenick. The 32-year-old leaves his $1.5 million home in Miami Beach every morning with his bullmastiff, Kitty, and drives to an office that overlooks the now-impressive dog track. Havenick is the opposite of the slender greyhounds that run here weekdays — a chubby poodle of a man with pudding cheeks and a golfer's tan. He walks around in khakis and a Magic City guayabera. Only his hair, which is sooted with gray specks, suggests he's the guy in charge.
On his desk sit blueprints to develop the track's old racing theater, a soundstage-like facility that's been empty since Hurricane Andrew tore off the roof.
He'd like to bring back the flea market and then build stores and cafés around the building in much the same way Gulfstream recently opened the Village at Gulfstream Park. "Our family is invested in this project," he says. "We definitely see a future of retail, restaurants, and bars, not just the casino and the dogs."
Those plans will likely work out. Combined with earnings from slots, jai alai, dog tracks, and racetracks, the Florida gambling industry earned a total of $1.1 billion in 2009, according to the Florida Department of Business and Professional Regulation.
That will go higher, says Bob Jarvis, a gambling-law professor at Nova Southeastern University in Davie. The Seminole compact opens the door to hotels and amusements that have made gaming a $4.3 trillion industry in Nevada. "Eventually, the legislature will decide the horse is so out of the barn we might as well have full-scale gambling in Florida," he says. "And if you have that, prepare to see the Steve Wynns, the Donald Trumps developing all along the beaches."