Florida poker: 15 years of change

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With World Series of Poker Circuit and World Poker Tour stops a regular fixture now in the Sunshine State, Florida cardrooms have emerged as a growing force in the poker world. Unlike California or Nevada, which have boasted legalized commercial poker for more than 100 years, Florida is in its infancy in the relative history of the poker industry. It’s worth looking back on how Florida has come onto the national poker scene and now vies for some of the best games in North America.

The history of Florida’s parimutuel cardroom operations dates to 1996, when the Florida Legislature authorized poker as a “side game” of sorts at horse tracks, dog tracks and jai-alai frontons. Poker was just one of many “penny ante” games authorized to parimutuels, which included bridge, canasta and dominoes to name a few of the low-stakes parlor games permitted at that time. From its first year of operation and for several years thereafter, cardrooms were greatly restricted by Florida law despite efforts to expand the attractiveness of the games to the playing public.

For example, poker could be played only on days when the facility was operating live parimutuel activities (dog racing, horse racing or jai-alai games), and the limit on the size of each pot, $10, was constraining to say the least. With many of today’s players utilizing a loose-aggressive style of play, it’s hard to imagine being successful with these strict limitations on pot size. Evidence of this is provided by the total gross receipts of Florida’s 15 cardroom operators during the fiscal year 1997-98. It was just shy of $5.5 million, which translated to an annual tax paid to the state of about $550,000.

The poker boom did not go unnoticed in the Sunshine State. The
poker landscape began to change in Florida in 2003, when the Legislature expanded the hours of operation to allow poker from noon to midnight on live operating days, and increased betting limits from a $10 maximum pot, to a $2 maximum raise, with three raises allowed per round of betting. Though this expansion is mild by today’s standards, the increase in player participation and revenues were significant. The 17 cardrooms in operation during the 2003-04 fiscal year reported $18.5 million in gross receipts, more than three times what was reported just six years earlier. As the tax rate of 10 percent on gross receipts remained unchanged, these facilities paid about $1.8 million to the state.

The addition of no-limit hold’em, with a maximum buy-in of $100 per player, occurred in 2007. Along with this new game and a “limited no-limit” structure came the addition of tournament games, which were limited to a maximum buy-in of $800, expanded operating times for any 12-hour period on any day, and the introduction of prizes such as high-hand and other types of giveaways, all of which were authorized during this time. Not surprisingly, the jump in gross receipts was significant, as the gross receipts from the 23 cardroom licensees totaled more than $90 million, translating to $9 million in taxes.

The most recent expansion to Florida’s poker laws occurred in 2010, as “no-limit” poker was introduced in Florida’s parimutuels. The Legislature removed limits on cash-game buy-ins, tournament buy-ins and expanded the hours of operation to a maximum of 18 hours during the week and 24 hours on weekends.

At 12:01 a.m. on July 1, 2010, Florida parimutuel facilities were legally authorized to dictate the stakes in their cardrooms. On average, Florida poker room revenues grew 26 percent that July. As momentum grew throughout the year in Florida’s poker industry, so did the revenues reported by the facilities. In fiscal year 2010-11 gross revenues climbed to more than $125 million, and $12.5 million in taxes were paid, an increase of more than 22-fold in the 15 years since poker was introduced to the parimutuel market.

Florida’s poker rooms now attract some of the best dealers and managers in the country, and the players are following. New rooms are expected to come on line in the next several months, and investors are flocking to Florida to develop additional rooms around the state. As the number of tables in the state increases and the tournaments and cash games gain notoriety, it’s likely the double-digit growth in Florida will continue for some time.

— Marc W. Dunbar represents several gaming clients before the Florida Legislature and teaches gambling and parimutuel law at the Florida State’s College of Law. Follow him on Twitter (@FLGamingWatch) or his website (floridagamingwatch.com).