12/17/2009 12:00AM

Hialeah racing permit voided

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The Florida Division of Pari-Mutuel Wagering has informed Hialeah Park and Gulfstream Park that neither is eligible to receive a Thoroughbred racing permit once held by Hialeah because the permit does not exist, officials involved in the matter said Thursday.

Both Hialeah and Gulfstream recently applied for the permit, which was last issued in 2002. Gulfstream applied for the permit in an attempt to expand its poker room to a 24-hour operation, said Marc Dunbar, an attorney for Gulfstream, whereas Hialeah applied for the permit in order to introduce the possibility of running a Thoroughbred meet at the track. Hialeah reopened this year as a Quarter Horse track to comply with provisions in stalled legislation that would allow the track to open a casino if it ran Quarter Horse meets in two consecutive years.

In letters rejecting the applications dated Dec. 15, the division of parimutuel wagering said that it could not award the permit because it was permanently revoked in 2004 after Hialeah failed to run any races in 2002 and 2003 "in violation" of Florida statutes.

"To say that we rejected the applications goes too far," said Alexis Antonacci Lambert, a spokesperson for the division. "The permit was revoked, and so it doesn't even exist."

Gulfstream was seeking another permit because all parimutuel facilities in South Florida use two permits in order to keep their poker rooms open 24 hours, according to Dunbar, putting Gulfstream at a disadvantage in the local marketplace. A single permit allows a track to operate a poker room for 12 hours.

"We're the only parimutuel facility, including dog tracks and jai alai frontons, that doesn't have a 24-hour card room in a 12-mile radius," Dunbar said. Gulfstream has filed a lawsuit challenging the practice of using two permits to extend poker-room hours, Dunbar said, and the case that will likely be heard in January.

Attempts to reach Hialeah owner John Brunetti Sr. were unsuccessful on Thursday. The track reopened on Nov. 28 for the first of 40 live race cards of Quarter Horse races, but handle so far has failed to meet the track's expectations.

The Florida division also informed Brunetti that it could not consider any application by the track for a Thoroughbred racing permit because existing state law "expressly prohibits" the division from issuing any new permits to a Thoroughbred track within 100 miles of an existing track. If Hialeah were to push forward in its efforts for a Thoroughbred permit, the law would need to be changed.

Brunetti reopened Hialeah for the sole purpose of receiving the casino license for 2011. However, the legislation that allows for the Hialeah casino is now stalled, and legislators will not be able to revisit the matter until they return in March 2010. The legislation also includes tax breaks for racetrack casinos, slashing the tax rate from 50 percent of gross slot-machine revenue to 35 percent.

The legislation was passed last year, but the bill's enactment rested on the approval of a separate gambling compact between the state and the Seminole Indian tribe, which operates the most lucrative casinos in the state.

Dunbar said that the legislature will almost certainly take up the bill again when it returns next year, but he said that it's unlikely the legislation will resemble the current bill because of the current political climate.

"It is going to be a nasty, nasty session where everything gets put back on the table," Dunbar said.

Gulfstream currently operates an 850-machine casino that generated $41.9 million in gross revenue for the fiscal year ending in June, or approximately $138 in revenue per machine per day. Calder's owner, Churchill Downs Inc., plans to open an $80 million casino with 1,200 slot machines by mid-January. Churchill has estimated that its casino will generate approximately $80 million in revenue in its first year of operation.

Bill Carstanjen, Churchill Downs's chief operating officer, said in an e-mail response to questions that Churchill had based its spending and revenue projections on the 50 percent tax rate, so the failure of the legislation would not affect any of the company's current plans for the casino.