STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FRANK LARRY ROSENTHAL, )

)

Petitioner, )

)

vs. ) CASE NO. 77-010

) DIVISION OF PARI-MUTUAL WAGERING ) DEPARTMENT OF BUSINESS REGULATION, ) STATE OF FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter, after due notice, on February 9, 1977, at Coral Gables, Florida, before the undersigned Hearing Officer.

APPEARANCES

For Petitioner: Starr W. Horton and

Mallory Horton, Esquires

Suite 904, City National Bank Building

25 West Flagler Street Miami, Florida 33130

For Respondent: William A. Hatch, Esquire

Department of Business Regulation The Johns Building

Tallahassee, Florida 32304 ISSUE PRESENTED

Whether the Petitioner should be granted a license as an owner of race horses, pursuant to Chapter 550, Florida Statutes.

Petitioner's license as an owner of race horses was revoked by the Florida State Racing Commission on July 31, 1961. By letter of June 16, 1976, from Petitioner's legal counsel to the Respondent, a hearing was requested on "Determination of eligibility to be licensed as an owner of race horses with the State of Florida of FRANK LARRY ROSENTHAL" and requesting that the Order of revocation be "reevaluated." The letter further stated: "The existence of this order now serves as an impediment to his earning a living. The letter was referred to the Division of Administrative Hearings by Respondent on January 3, 1976, requesting the appointment of a Hearing Officer. The referral letter noted that no formal application for licensing has been submitted but that "an extensive background investigation has been conducted." At the commencement of the hearing on February 9, 1977, the parties agreed that the letter of June 16, 1976, would be treated as an application for an occupational license as an owner

of race horses, and that the issue for determination would be petitioner's qualifications for such license.

The following Findings are based on the testimony of witnesses and documentary evidence submitted at the hearing.

FINDING OF FACT

1. Petitioner resides in Las Vegas, Nevada, and is currently employed by the Argent Corporation in that city with responsibility for the food and beverage aspects of several hotels owned by the firm. He is forty-seven years old. (Testimony of petitioner)

   
   

2. Petitioner served in the Army from 1951 to 1953. He was awarded the Combat Infantryman's badge for service in Korea during that period and received an honorable discharge at the conclusion of his period of obligated service. After his military service, petitioner went to Chicago and was in the restaurant business for two years. He then went to work as a "professional handicapper" or "oddsmaker" with the Angel Kaplan Sports Service in Chicago. He thereafter moved to Miami, Florida, where he formed a joint venture with his father as an owner of race horses. The trainer of his horses was Arnold Winick. Winick purchased some six or eight thoroughbred horses for Petitioner and thereafter trained and raced them in his behalf for about a year. (Petitioner's Exhibits 5, 6, Testimony of petitioner, Winick)

   
   

3. On December 31, 1960, petitioner was arrested at his apartment in North Bay Village, Florida, by local police and charged with operating a gambling house. However, he was not far prosecuted for this alleged offense because the Dade County State Attorney's office determined that there was insufficient evidence. Petitioner testified that this arrest was the result of harassment by the North Bay Village Police who were allegedly enforcing a "penalty" levied upon him for his refusal to pay extortion money to a man named Eli for the privilege of staying in Miami. Petitioner claims that Eli was the "patch" for mobsters, a "patch" being the "connection for those who were trying to get people like myself to extort." (Testimony of Huttoe, Petitioner)

   
   

4. On March 31, 1961, at Miami, Petitioner appeared before the Florida State Racing Commission pursuant to notice requiring him to show cause why his occupational license as an owner of race horses for purposes of conducting races in the State of Florida should not be revoked or suspended. The stated grounds for the proposed action were Petitioner's 1960 arrest on charges of operating a gambling house, and allegations that he was a so-called regional "layoff" bookmaker based on long- distance telephone toll records from numbers at his residence to places in Covington and Newport, Kentucky, which were national bookmakers "layoff centers" where bets on horse races and other sporting events were accepted from bookmakers throughout the United States. It was further alleged that during a search of Petitioner's apartment at that time, police officers answered the telephones there and took numerous wagers intended for Petitioner. Further grounds for the proposed action were that at the time of his arrest, Petitioner admitted to the North Bay Village Police Chief that he had been accepting wagers on the premises, and that therefore his conduct was unbecoming or detrimental to the best interests of racing in Florida. His license as a racehorse owner was therefore revoked on July 31, 1961, and he was barred from admission to any of the racetracks or establishments licensed by the Racing Commission. No appeal was taken to the revocation. (Testimony of Petitioner, Respondent's Exhibit 4)

5. Petitioner was arrested on gambling charges in Pikesville, Maryland, in June, 1963. The charges were reduced to disorderly conduct and Petitioner forfeited $100 bond.

   
   

6. On December 2, 1963, Petitioner was found guilty of a conspiracy to give a bribe to influence the outcome of an athletic contest, in Superior Court, Mechlenburg County, North Carolina. His conviction of this felony was based upon a plea of nolo contendere and a fine was imposed in the amount of $6,000. The offense of which he was convicted involved a conspiracy to bribe a New York University basketball player. His petition for restoration of civil rights was granted by the same court on July 30, 1975. (Testimony of Petitioner, Petitioner's Exhibit 7, Application Letter of June 16, 1976)

   
   

7. Petitioner was arrested for loitering by the Miami Beach Police Department on March 6, 1963. He was arrested on two other occasions in September, 1964, by the Miami Beach Police Department and the North Miami Beach Department, the latter charge being failure to make criminal registration. No prosecutive action was taken in any of these instances. Petitioner testified that his arrests were a continuation of harassment by local police authorities. (Testimony of Petitioner)

   
   

8. Petitioner became associated with the Multiple Sports News Service in Miami in 1963 as a "sports consultant." The President of Multiple Sports News Service was Stanley Green. It was in the business of selling a publication that contained schedules and other pertinent data pertaining to college and professional sports events. It also provided its subscribers telephonic information upon request concerning handicap information or odds on various college and professional games. Petitioner's primary function in this organization was to arrive at the odds or "point-spreads." After an investigation of the operations of this firm, Petitioner, Green, and other employees were arrested by agents of the Federal Bureau of Investigation in November, 1965, and charged witch various interstate gambling violations. An indictment against Petitioner resulting from this arrest was later dismissed.

   In the opinion of a federal agent who investigated the activities of Multiple Sports News Service, its functions and the manner in which it conducted them were designed to provide necessary services to gamblers and bookmakers. (Testimony of Petitioner, Welsh)

   
   

9. In 1967, Petitioner operated as a handicapper in Chicago, which occupation he described as "winning bets." He was listed in a 1967 report of the Chicago Crime Commission as "one of a group of persons who deserve to be identified with the syndicate because of their activities in recent years." In January 1967, Petitioner served ten days in jail at Miami, Florida, on a traffic offense of driving without a valid driver's license. (Testimony of Petitioner, Respondent's Exhibit 4 (Supplemental)

   
   

10. In 1968, Petitioner moved to Las Vegas, Nevada, where he has resided until the present time. There, he became associated as a handicapper with the Rose Bowl Sports and RaceBook. This was a legalized betting establishment where Petitioner was in charge of establishing the odds on games in various major sports. Shortly after his arrival in Las Vegas, Petitioner was arrested by the local police on charges of second degree burglary and vagrancy, but the charges were dismissed. He was there after arrested in December, 1970, for alleged violation of federal statutes in the transmission of wagering information in aid of racketeering and conspiracy. He was again arrested the same month and charged with federal offenses of wagering by telephone and racketeering in the State of Nevada. Again, on March 20, 1971, he was charged with a federal

    gambling violation. Two of these cases did not reach trial and the third is pending in the United States District Court for the Central District of California (United States v Kilgore Case No. 8085-RJK-CD). (Testimony of Petitioner, Goodman, Respondent's Exhibit 1)

    
    

11. In 1971, Petitioner commenced work at the Stardust Hotel in Las Vegas as a supervisor of blackjack games. In short order, he was promoted through the "ranks" to executive positions with that hotel and then with the Argent Corporation that controlled several hotels and gambling casinos in Las Vegas. His rise in the Argent hierarchy resulted in his eventual appointment as chief operating officer of the corporation's four casinos and three hotels in Nevada. During his years with Argent, Petitioner was instrumental in having race and sports books merged into the general hotel casino gaming operations. (Testimony of Petitioner, Brown, Goodman)

    
    

12. The Nevada State Gaming Commission advised Petitioner in 1975 that he would be required to apply for a license as a key employee due to the executive nature of his employment. In 1976, the Commission denied the license to the Petitioner based upon his North Carolina conviction, the Florida license revocation action and statements made by the Chief of the North Bay Village Police regarding that incident, and testimony of one Mickey Bruce before the McClellan Committee in the early 1960's to the effect that Petitioner had tried to influence the outcome of a sporting event. As a result of the license denial, Petitioner was obliged to give up his executive position with the Argent Corporation, but retained his local work permit and moved to his present job in food and beverage services with the corporation. (Testimony of Petitioner, Goodman)

    
    

13. During approximately a ten-month period in 1976, Petitioner wrote a successful sports column for a Las Vegas newspaper, Valley Times. (Testimony of Brown, Petitioner, Petitioner's Composite Exhibit 2)

    
    

14. Based on their knowledge of Petitioner, witnesses Huttoe, Winick, Goodman, and Brown recommend that Petitioner be granted a license by Respondent. An affidavit from the Sheriff of Clark County, Nevada, was submitted, wherein that official attests to Petitioner's integrity and excellent reputation for truth and veracity in the Las Vegas community. (Testimony of Huttoe, Winick, Goodman, Brown, Petitioner's Exhibit 4)

    
    

15. Petitioner has not given any consideration to the possibility of actively participating in the current racing season in Florida and does not have any plans for immediately attempting to enter into thoroughbred racing. He does not own any horses at the present time, but hopes to become active in racing if he is issued a license. (Testimony of Petitioner)

    
    

    CONCLUSIONS OF LAW

    
    

16. Petitioner seeks an occupational license as an owner of race horses. Such a license is issued under the authority of Section 550.10, Florida Statutes, which provides pertinently as follows:

    
    

    "550.10 Occupational license tax to be paid

    by employee; denial and revocation of license.--

    1. All persons connected with race tracks shall pay an annual occupational license tax, this occupational tax to be payable for each specified job performed. The scheduled license

       fees are as follows:

       (b) Professional persons such as owners, trainers, veterinarians, doctors, nurses, officials and supervi- sors of all departments, $10.

    2. It is unlawful for any person to take part in or officiate in any way or to serve in any capacity at any racetrack without first having secured said license and paid said occupational tax.

       (4)(a) The division may deny or revoke a license to any person who shall have been refused a license by any other state racing commission or racing authority; provided, however, that the state racing commission or racing authority of such other state extends to the Florida Division of Pari-mutuel

       Wagering reciprocal courtesy to maintain the discipli- nary control.

       (b) The Division of Pari-mutuel Wagering may deny or revoke any license where the holder thereof has violated the rules and regulations of the division governing the conduct of persons connected with the race tracks."

       
       

17. The above statutory provision is implemented by

    various sections of the rules of Respondent in Chapter 7E-1, F.A.C. Rules applicable to the matter under consideration read pertinently as follow:

    
    

    "7E-1. 01 Definition's, constructions, interpretations.

    (18) Owner includes sole owner, part owner or lessee of a horse . . .

    
    

    7E-1.02 General Rules.

    (21) The holding of a permit entitling thoroughbred pari-mutuel associations to licenses to conduct racing meets under the laws of Florida is a privilege given and granted by the Legislature and The Board of Business Regulations in the best interests of the people of the State of Florida; and the holding of a license entitling persons, partnerships or corporations to engage in thoroughbred racing pari-mutuel activities either as owner, trainer, employee, or in any capacity whatsoever, requiring a license under the Statutes and these Rules, is likewise a privilege.

    
    

    7E-1.03 Occupational licenses, resident employment.

    1. Every license shall be for not more than one year, and shall expire on June 30th of each year.

    2. All licenses are temporary when issued and subject to final approval by the Division.

    (10) Applications for licenses filed by owners, . must be submitted to and approved by the Board of Stewards before action will be taken upon such applications by the Division.

    1. Before approving any application for a license it shall be duty of the board of stewards or department head individually and collectively to ascertain if the

       applicant is qualified as to ability, integrity and right to the license applied for.

    2. In considering each application for a license the Board of Stewards or department head may require the applicant as well as his endorsers to appear before them and show that said applicant is qualified

    in every respect to receive the license requested. Ability as well as integrity must be clearly shown by the applicant in order to receive recommendation for the granting of the license.

    (d) No occupational license shall be recommended by the stewards or department head and no license shall be issued by the Division unless satisfactory evidence first is presented to the stewards or department head that the person so applying will participate in the meeting over which the steward or department head has supervision.

    1. No person who shall have been convicted of

       a felony or bookmaking in the State, or under the laws of any other state government, or country, of an offense which would be a felony if committed within this State in the last ten (10) years shall be

       issued an occupational license by the Division.

       Any deviation from this rule shall be approved by the Division.

    2. The Division may refuse to Issue or renew an occupational license issued if it shall find that tile applicant, or any person who is a partner, agent, employee, or associate of the applicant, has

    knowingly associated or consorted with any person or persons who have been convicted of a felony in any jurisdiction or jurisdictions or is knowingly con- sorting or associating with bookmakers, touts, or persons of similar pursuits, or has himself engaged in similar pursuits, or has been found guilty of any fraud or misrepresentation in connection with racing,

    breeding, or otherwise, or has violated any law, rule, or regulation, with respect to racing in this or any other jurisdiction or any rule, regulation, or order

    of the Division, or has been guilty or engaged In simi- lar related or like practices; provided, however, that the Division may issue or renew an occupational license or refuse to suspend or refuse to suspend or revoke an occupational license issued, where the applicant or licensee has not engaged in such association or activities for a period of ten years or for good cause shown."

    
    

18. It is apparent from the above rules that the applicant for a license is required to establish his qualifications therefor. The two statutory grounds for denial in Section 550.10 are not deemed applicable to Petitioner. He has not been refused a license by any other state racing commission or racing authority nor has it been shown that he has violated any rules or regulations of the Division governing the conduct of persons connected with race tracks subsequent to the original license revocation. It is therefore necessary to look to the above-cited rules to resolve the matter.

19. The parties agreed at the hearing that the normal prerequisite of submission of license applications to a Board of Stewards prior to action thereon by Respondent, is unnecessary in this instance. This being so, it is considered that the requirement of Rule 7E-1.03(10)(d) which precludes issuance of licenses unless evidence is shown that the applicant will participate in a race meeting is likewise inapplicable. Therefore, the fact that Petitioner has no present intention of purchasing and racing horses should not foreclose his application, particularly in view of his justifiable reluctance to so so unless favorable action is taken upon his license application. However, it is noteworthy that Petitioner's request for reinstatement was made because the revocation stands as a bar to his ability to earn a livelihood. This obviously has reference to his past difficulties with the Nevada Gaming Commission which based its adverse action in part on the Florida revocation.

    
    

20. Rule 7E-1.03 (10) hinges license approval in this area of horse ownership to applicant's established "integrity." In this connection, subparagraph (13) of that rule rests discretion in Respondent to grant a license if an applicant has been convicted of a felony in the last ten years. It also reasonably may be concluded that felonies committed over ten years prior to application normally should not be a crucial factor in the issuance of a license. Subparagraph (14), after listing grounds for discretionary denial of a license, again speaks of a ten year "statute of limitations" in considering past derelictions or improper associations of the applicant.

    
    

21. With the above in mind, a brief discussion of Petitioner's past history commencing with the revocation of his license in 1961 is appropriate. The evidence presented at the hearing, primarily in the form of testimony rather than documentary evidence, shows that Petitioner, far from having been chastened by his license revocation, proceeded to commit a felony in 1963 of which he was convicted in North Carolina for conspiracy to bribe a college basketball player. This conviction is of a most serious nature, especially when viewed in connection with Petitioner's current application to engage in horse racing, and the possibility of further unlawful conduct in connection therewith. Nevertheless, when considering its vintage, the conviction, standing alone, would not necessarily warrant denial of a license today under Respondent's rules, if rehabilitation has been clearly shown. However, notwithstanding the seriousness of such a matter, Petitioner, over the ensuing years, has continually been embroiled in difficulties with the law by continuing to involve himself in questionable enterprises with unsavory associates. His record of arrests and indictments by city, state and federal authorities, although not resulting in convictions except for minor infractions, cannot be lightly disregarded for they tend to establish the adoption of a way of life that is decidedly not in consonance with the type of background expected and required of persons associated with horseracing in Florida. The term "integrity" is commonly defined as "soundness of moral principle and character." As heretofore stated, the burden rests with Petitioner to demonstrate his fitness to obtain a license. It is not necessary for Respondent to prove the contrary. Wetzler v Ring, 125 So 2d 883 (Fla. 3rd DCA 1961) Petitioner's contention that he has enjoyed a good reputation in recent years in Las Vegas is undercut by the recent adverse action of the Nevada State Gaming Commission in which, for various reasons, it was not seen fit to permit him to perform responsible functions relating to that agency's area of supervision.

    
    

22. The Petitioner has failed to "clearly show" qualifications as to integrity and it is therefore concluded that the application should be denied.

RECOMMENDATION

That Petitioner's application for an occupational license as an owner of race horses under Section 550.10, F.S., be denied.

DONE and ENTERED this 23rd day of March, 1977, in Tallahassee, Florida.

THOMAS C. OLDHAM

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Starr W. Horton and Mallory Horton, Esquires

Suite 904, City National Bank Building

25 West Flagler Street Miami, Florida 33130

William A. Hatch, Esquire Department of Business Regulation The Johns Building

Tallahassee, Florida 32304

Docket for Case No: 77-000010

Orders for Case No: 77-000010