There were about 50 people aboard the vessel, which ferries people to a casino boat about three miles offshore in the Port Richey canal, according to the Pasco County Sheriff's Office. He said the crew chose to turn back veering close to a residential neighborhood as smoke belched and then flames kicked up.
Larry Santangelo, who lives near the scene, told the Tampa Bay Times he thought his own house was on fire.
The boat was in the Gulf near Harborpoint Drive in Port Richey.
Passengers jumped into the water to escape the fire, which spread quickly after breaking out about a half mile from shore.
Nobody was killed. About a dozen people were hospitalized with minor injuries, according to authorities.
Sheila McAffee told WTSP 10 News that she and other passengers jumped about eight to 10 feet into the water and that, once they reached shore, nearby residents rushed to help them. He said she had arrived less than an hour earlier after becoming ill.
Mcaffee's husband Darrell said that will be the last time they press their luck for a while.
The fire department said that because the water wasn't deep, rescue workers were able to get to the victims much quicker.
The boat shuttling passengers from land to the Tropical Breeze Casino boat had engine trouble, so the captain tried to return the boat to the dock. Fifteen passengers had experienced chest pain, smoke inhalation and other injuries.
The first 911 call about the fire came in around 4:15 p.m., CNN affiliate WFTS reported.
Another witness told the Tampa Bay Times the shuttle boat passes regularly by his family's home, carrying patrons to and from a casino ship offshore. The Pasco County Sheriffs Office said it will release more information later Monday, including which agency will lead the investigation.