|By Mary Ellen Klas, The Miami
HeraldMcClatchy-Tribune Regional News
Oct. 23, 2011--TALLAHASSEE -- It is a lazy, rainy day in Tallahassee and Colin Au, the president of Genting Americas, has arrived in town on a mission -- to meet with every one of the state's 180 legislators to explain why Miami needs a "destination resort" with one of the world's biggest casinos.
As the top U.S. executive for one of the globe's largest casino developers, Au is prepared to lobby "24-7 for 100 days,'' he said -- or as long as it takes for a legislative vote on a bill to bring resort casinos to Miami-Dade and Broward. "I'm stationed here,'' he said Tuesday, in between meetings.
A bill is expected to be filed Monday by Miami Rep. Erik Fresen and Fort Lauderdale Sen. Ellyn Bogdanoff. It asks legislators to do what decades of lawmakers have rejected: bring three Las Vegas-style casinos to Florida.
The proposal appeals heavily to the jobs-first strategy of Gov. Rick Scott and legislators, but skepticism is widespread. Doubters question what impact more gambling, more tourism and more congestion will have on families, communities and the state.
In a wide-ranging interview with the Herald/Times last week, Au responded to concerns, pointedly countered rumors that his company is anti-Semitic and associated with the Chinese mob, and offered a window into the company's legislative strategy.
"My message is very simple,'' Au said. Florida faces "huge unemployment, budget deficits and gaming is already here." Florida's choice, he said, is to decide whether it wants to keep gaming the way it is "or transform it."
He spelled out the preliminary results of an economic impact study, in which Genting consultants project annual casino tax revenue of $400 million to $600 million and the creation of 100,000 permanent jobs.
Au, 62, is one of the new breed of casino developers. Along with Sheldon Adelson of the Las Vegas Sands and Steven Wynn of Wynn Resorts, he has transformed the traditional Las Vegas-style casino into multi-purpose entertainment venues, geared toward high-end clients, conventions, business, and families. The strategy has earned them billions and now each eyes Miami as a gambling frontier.
A native of Malaysia, educated at Harvard Business School and the University of Birmingham in England, Au speaks with the argot of a Brit and the accent of an Asian. He compared Florida to Singapore, a city-state historically opposed to casinos until the powerful former prime minister, Lee Kuan Yew, determined in 2005 that the right "moment" had come to permit so-called "integrated resorts" to stimulate the economy.
"The key thing for Florida is to decide what I call the Lee Kuan Yew moment,'' Au said. "It is transforming. We are not talking about hiring 500 jobs or 1,000 jobs. We are talking 100,000 jobs."
To up the ante, Genting Group purchased the Miami Herald property last spring from the McClatchy Company, the newspaper's parent, paying $236 million in cash for the bayfront building and allowing the paper to remain rent-free at the site for two years. Genting has since gobbled up adjacent property, met with downtown traffic engineers and started assuring local retailers and hotel owners that it wants to work beside them, not in competition, Au said.
Rep. Steve Precourt, a Republican from theme-park rich Orlando, has heard Genting's pitch and doesn't buy it.
"Look at the new gambling efforts around the country --from Atlantic City to Biloxi -- and any of those new entrants have horribly cannibalized the local economy,'' said Precourt, chairman of the House Finance and Tax Committee.
He predicts that resort casinos "will put a whole bunch of hotel and restaurants out of business and it won't be limited to the local economy.'' he said. He said the attempts to lure convention business to the mega-resorts will sap Orlando's "bread-and-butter convention business" and then "take huge profits out of the community."
Precourt is not a lone dissenting voice. House Speaker Dean Cannon, also from Orlando, said he's skeptical of the claims of the casino industry. He and the Florida Chamber of Commerce, with its new chairman from Disney, have lined up against the casino legislation.
Au acknowledged that of all the obstacles ahead of him, persuading Florida's historically anti-gambling Legislature to take a chance on casino resorts is the most challenging. So Au comes to every meeting with charts, graphs and numbers.
First, he talks about revenue and jobs. Genting believes Florida can create a $4 billion to $6 billion resort casino market by appealing to international tourists and high rollers from other states. Casinos would pay a 10 percent tax rate -- higher than the 6.75 percent paid in Las Vegas but lower than the current 35 percent paid by Florida's slot racinos, he said. Then, Miami would lure high-stakes gamblers from the East Coast and Texas, and away from Las Vegas (estimated revenue: $1 billion to $2 billion a year). Another $1 billion to $2 billion would come from Asian tourists with the rest from Latin America.
The plan is to capture one-third of the estimated 13 million East Coast tourists who visit Las Vegas and 80 to 90 percent of the Hispanic market on the East Coast, Au said.
"We are not after the little old lady in Hialeah with $25,'' he said. "We are after New Yorkers with thousands."
Au calls it the "export model" and said it's based on the company's experience in Singapore, where the destination resort market has grown 41 percent in two years, gaming tax revenue is $6 billion, and most tourists come from out of state or abroad. There, residents are discouraged from gambling with a government-imposed $100 casino entrance fee levied every 24 hours.
If Miami can't get non-stop flights from Asia to Miami, Genting is "prepared to bankroll and subsidize some of the flights," he said. "We will tell China Eastern, or Air China, that we will guarantee 50 percent of the seats," he said.
Au is sensitive to the claim that the $3.8 billion mega-resort will swallow up existing local businesses. Genting's Resorts World Miami will limit its retail and convention center, he said, and partner with existing hotels, restaurants and retailers who agree to redeem the loyalty points earned by Genting customers.
"We have already talked to the Beach and the greater Miami convention center will market this thing,'' he said.
Nick Iarossi, lobbyist for the Las Vegas Sands and Genting's competitor in the resort casinos business, believes Au "is trying to backpedal some'' from the company's claims that it will build 5,100 hotel rooms and 50 restaurants. "They are realizing the local business owners in Miami are very nervous about the size of the Genting project and nervous about the competition,'' he said.
By comparison, Sands has not come out with a proposal to indicate how many hotel rooms it will have but Iarossi expects it to be at least half of what Genting is offering. "Everybody has all different types of business models,'' Iarossi said. "We fit the model to the market.''
Au also addressed concerns from legislators that by opening the South Florida market to Las Vegas-style casinos, the state will lose the $250 million in annual payments under a revenue-sharing compact with the Broward County-based Seminole Tribe.
To counter that, Au said that within four months of being awarded one of the casino licenses, Genting is prepared to open up a temporary casino at the Omni property in downtown Miami so the state can quickly offset the lost revenue. "We can backstop all the taxes that are due to the state,'' he said.
Au said Genting supports the effort by South Florida's horse and dog tracks and jai alai frontons to get parity in tax rates and games. "Philosophically, it's the right thing to do,'' he said. But, politically, his advice to them is to remove some slot machines when they install other games "to solve the expanding [gambling] footprint" that will occur because of the introduction of casinos.
As Genting's profile in Florida has risen, so have attacks from critics.
Miami businessman Norman Braman questioned Genting's ties to the government of Malaysia, where the company has a gambling monopoly, telling a Miami television station: "Just Google 'Malaysia' and 'anti-Semitism.' I imagine that this company has a very close relationship with the government and that concerns me," Braman said.
Au bristles at the suggestion that his company is anti-Semitic. The Chinese in Malaysia "were displaced just like the Jewish diaspora, which many of our Jewish friends know,'' he said.
He said the company has "no relationship with Stanley Ho," the Macau gambling tycoon the U.S. Justice Department named as a money launderer for the Chinese Triads' organized-crime syndicate. "If there is any relationship, we wouldn't be operating in Singapore," he said.
Au also dismissed remarks of former Beacon Council president Frank Nero, who last week warned against casinos, arguing that Miami is too dependent on tourism and needs to diversify.
"Into what?'' Au asked. "Solar energy, high tech? Those take years of incubation and they need a different class of people.... God, or nature, has given Miami the weather, the location, the stability and the crossroads of the three continents. Build on that strength."
The ultimate calculation for policy makers and the industry, Au said, is this: "At the end of the day we are a sin industry and the most important thing is to make the economic development benefits far outweigh anything else."
And if the Legislature doesn't agree?
"Don't feel sorry for us,'' Au said. "We think this [Miami] land is going to appreciate. So if they take three years to do it, so be it."
Mary Ellen Klas can be reached at meklas@MiamiHerald.com or on Twitter @MaryEllenKlas
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