The Issue The issues for disposition in this case are whether proposed rules 61D-11.001(17) and 61D-11.002(5), Florida Administrative Code, which consist of the repeal of said rules, constitute an invalid exercise of delegated legislative authority as defined in section 120.52(8), Florida Statutes; and whether the Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering’s (Respondent), failure to prepare a statement of estimated regulatory costs constituted a material failure to follow the applicable rulemaking procedures or requirements set forth in chapter 120.
Findings Of Fact Respondent is the state agency charged with regulating pari-mutuel wagering pursuant to chapter 550, Florida Statutes, and cardrooms pursuant to section 849.086, Florida Statutes. Each Petitioner currently holds a permit and license under chapter 550 to conduct pari-mutuel wagering and a license under section 849.086 to conduct cardroom operations. Petitioners offer designated player games at their respective cardrooms. The rules proposed for repeal, rules 61D-11.001(17) and 61D-11.002(5), relate to the play of designated player games. Rule 61D-11.001(17) provides that “‘[d]esignated player’ means the player identified by the button as the player in the dealer position.” Rule 61D-11.002(5) provides that: Card games that utilize a designated player that covers other players’ potential wagers shall be governed by the cardroom operator’s house rules. The house rules shall: Establish uniform requirements to be a designated player; Ensure that the dealer button rotates around the table in a clockwise fashion on a hand to hand basis to provide each player desiring to be the designated player an equal opportunity to participate as the designated player; and Not require the designated player to cover all potential wagers. Both rules were adopted on July 21, 2014. Both rules list sections 550.0251(12), and 849.086(4) and (11) as rulemaking authority, and section 849.086 as the law implemented. Designated Player Games A designated player game is a subset of traditional poker games in which a designated player plays his or her hand against each other player at the table, instead of all players competing against each other. The term “designated player game” is used synonymously with “player banked games.”3/ However, a designated player is not a cardroom operator. In traditional “pool” poker games, each player bets into a central pool, with the winning hand(s) among all of the players collecting from the pool of bets, minus the cardroom rake. In designated player games, each player at the table makes an individual bet, and compares their hand against the designated player’s hand. If the player’s hand is better than the designated player’s hand, then the designated player pays the player from the designated player’s stack of chips. If the designated player’s hand is better than the player’s hand, then the designated player collects the player’s wager. At an eight- seat table, it is as though there are seven separate “player versus designated player” games. Designated player games were first played at the Ebro (Washington County Kennel Club) cardroom in 2011. The game, known as “double hand poker,” was demonstrated to Respondent, and subsequently approved for play. Though the internal control that describes the rules of game play was not offered in evidence, a preponderance of the evidence demonstrates that the game used a designated player. After Respondent’s approval of Ebro’s double hand poker, Respondent entered an order rescinding its approval due to concerns that the use of a designated player resulted in the establishment of a banking game. That decision was challenged, and subsequently withdrawn, with the result being that “Ebro may immediately resume play of Double Hand Poker as approved by the division.” In 2012, the Palm Beach Kennel Club cardroom began offering “tree card poker” with a designated player. Although tree card poker had been approved by Respondent, the designated player element had not. Thus, since the game was not being played in accordance with the approved internal control, it was unauthorized. Respondent investigated the playing of tree card poker at Palm Beach Kennel Club. A video demonstration was provided that showed two hands of tree card poker being played with a designated player. The video depicted a single designated player playing his hand against each other player at the table, and paying or collecting wagers based on each individual hand. After having reviewed the demonstration video, Respondent ultimately determined that the use of a designated player did not violate the prohibition against banking games as defined. The Adoption of the Designated Player Rules As requests for approval of internal controls for games using designated players became more common, Respondent determined that it should adopt a rule to establish the parameters under which designated player games would be authorized. On December 16, 2013, after having taken public comment at a series of rulemaking workshops, Respondent published proposed rule 61D-11.002(5) which provided as follows: 61D-11.002 Cardroom Games. * * * Card games that utilize a designated player that covers other players’ wagers shall: Allow for only one designated player during any single hand; Not require the designated player to cover all wagers that could be made by the other players in the game; Not allow other players to cover wagers to achieve winnings that the designated player could have won had he or she covered the same wagers; Not allow or require a player to buy in for a different amount than any other player in the game in order to participate as the designated player; and Rotate a button or other object to designate which player is the designated player. The button or other object shall rotate clockwise around the table to give each player the opportunity to participate as the designated player. On February 14, 2014, a challenge to the proposed rule was filed that objected to restrictions on the manner in which designated player games could be conducted. The rule challenge hearing was continued, and the case placed in abeyance pending negotiations between the parties. On March 14, 2014, Respondent filed a Notice of Change to the proposed rule 61D-11.002, which added the following provisions to proposed rule 61D-11.002: The designated player shall: Cover the table minimum for each participating player; and Pay each player an amount above the table minimum equal to their pro rata share of the pot in the event the designated player cannot cover all wagers. A public hearing on the changes to the proposed rule was held on May 8, 2014. As to the designated player provisions of the proposed rule, Respondent received the following comment: [I]f we could modify this . . . taking the existing paragraph 5 and come up with three new criteria, one being uniform requirements for a designated player included within the house rules; allowing for the dealer button to rotate on a hand-by-hand basis for qualified designated players; also, not requiring the designated player to cover all potential wagers, but nonetheless allowing the house rules to set a designated minimum buy-in amount or just a chip count. I think if we had those particular parameters, we would allow the preservation of this game to continue in its current fashion . . . . And . . . we’re going to avoid [] any argument that the department has somehow created a banked card game, because the biggest thing here is that we’re not requiring that the designated player meet all the theoretical payouts of the game. On May 19, 2014, written comments were submitted on behalf of several pari-mutuel facilities. Those comments included proposed language that is identical to the rule that was ultimately adopted, and included the following: Multiple jurisdictions have determined a key element to banked card games is the house requiring all wagers be covered. We propose this language to distinguish between lawful games and impermissible banked games. On June 9, 2014, Respondent filed a Notice of Change that adopted the industry’s proposed language, and changed proposed rule 61D-11.002 to its present form. On June 13, 2014, the challenge to proposed rule 61D-11.002(5) was voluntarily dismissed, and the case was closed. On July 21, 2014, rule 61D-11.002(5) became effective. There can be little doubt that Respondent understood that it was, by its adoption of rule 61D-11.002(5), recognizing player banked games in which a designated player plays his or her hand against each other player at the table. The rule is substantial evidence that, as of the date of adoption, Respondent had determined that designated player games did not violate the prohibition against “banking games” as that term is defined in section 849.086. Internal Controls Over the course of several years, beginning generally in 2011 and extending well into 2015, Respondent was presented with internal controls from cardrooms around the state for playing designated player games. Internal controls are required before a particular game may be offered, and describe the rules of the game and the wagering requirements. The internal controls submitted by the Jacksonville Kennel Club; the Daytona Beach Kennel Club; the West Flagler Associates/Magic City Poker Room; and the Naples/Ft. Myers Greyhound Track Cardroom, described games in which designated players played their hand against those of the other players at the table, and paid and collected wagers from the designated player’s chip stack based on the rank of the designated player’s hand against the individual players. The games described did not involve pooled wagers, and clearly described player banked games. Respondent approved the internal controls for each of the four facilities. The process of approving internal controls occasionally included the submission of video demonstrations of the games described in the internal controls for which approval was being sought. Approval of internal controls was never done without the review and assent of Respondent’s legal department or the division director. With regard to the rules of the designated player games that underwent review and approval by Respondent, “all of them are about the same, few differences.” From 2011 through mid-2015, Respondent approved internal controls for playing one-card poker, two-card poker, three-card poker, Florida Hold ‘Em, and Pai Gow poker using designated players at numerous cardroom facilities. A preponderance of the evidence establishes that Respondent was aware of the fact that, for at least several facilities, “eligible” designated players were required to meet minimum financial criteria, which ranged from a minimum of $20,000 in chips, up to $100,000 in chips. In the case of the Daytona Beach Kennel Club cardroom, internal controls called for a designated player to submit an application, agree to a background check, and submit a deposit of $100,000. Respondent approved those internal controls. DBPR Training In August 2015, Mr. Taylor was invited by the Bestbet cardroom in Jacksonville4/ to participate in a training session it was offering for its employees. Mr. Taylor is an investigator for Respondent, and visited the pari-mutuel facilities at least once per week. Mr. Taylor was invited by the facility to get an overview of how the cardroom games that had been approved by Respondent, including designated player games, were played. The games that were the subject of the training were substantially similar to those depicted in the April 2012 training video, and those he had observed during his weekly inspections. The designated player games for which training was provided had been approved by Respondent. In September 2015, training in designated player games was provided at Respondent’s Tallahassee offices to several of its employees. Mr. Taylor perceived the training “as an overview to give us an idea of what we are going to see.” Neither Mr. Taylor nor any other participant in the training offered any suggestion that the training was being provided in anticipation of a shift in Respondent’s practice of approving the internal controls for designated player games. Current Rulemaking On September 23, 2014, Respondent published a Notice of Development of Rulemaking. The notice cited 15 of the 30 subsections of chapter 61D-11 as being the subject areas affected by the notice, and provided that “[t]he purpose and effect of the proposed rulemaking will be to address issues discovered in the implementation and practical application of cardroom rules adopted on July 21, 2014.” There is nothing in the notice to suggest that Respondent had modified its position on designated player games, and its continued approval of institutional controls approving such games is strong evidence that it had not. On August 4, 2015, Respondent published a Notice of Meeting/Workshop Hearing for a rule workshop to be held on August 18, 2015. The Notice listed each rule in chapter 61D-11 as the “general subject matter to be considered,” including those related to games of dominos. Respondent asserted that it had “posted a version of amended cardroom rules that included the [repeal of rule 61D-11.005] on its website,” though such was not published, nor did Respondent provide a record citation in support of its assertion. On October 29, 2015, Respondent published its proposed amendments to chapter 61D-11. Rule 61D-11.001(17), which defines the term “designated player” as “the player identified by the button as the player in the dealer position,” was proposed for repeal. Rule 61D-11.002(5), as set forth above, which had established the standards for designated player games, was proposed for repeal. Rule 61D-11.005 was proposed for amendment to add subsection (9), which provided that “[p]layer banked games, established by the house, are prohibited.” On December 2, 2015, the Division held a public hearing on the proposed amendments. During the public hearing, Mr. Zachem made it clear that the intent of the proposed amendments was to change the Division’s long-standing and consistently applied construction of section 849.086 as allowing designated player games to one of prohibiting designated player games, and in that regard stated that: The rules pertaining to designated player games are now going to be correlated with the statute that is the prohibition against designated player games. The statute does not allow designated player games. There has to be a specific authorization for a type of game in statute, and there is none in 849.086 pertaining to designated player games . . . . When some of these definitions in other areas were created, I don’t think that the concept of what these games could even become was fathomed by the division. Given the process by which internal controls for designated player games were approved by Respondent, including written descriptions and video demonstrations of play, the suggestion that Respondent could not “fathom” the effect of its rules and decisions is not accepted. On December 11, 2015, Petitioners individually filed petitions challenging the validity of the proposed rules. The cases were consolidated and ultimately placed into abeyance pending efforts to resolve the issues in dispute. Agency Action Concurrent with Rulemaking After the December 2015 public hearing, and prior to the adoption of any amendments to chapter 61D-11, Respondent filed a series of administrative complaints against cardrooms offering designated player games. Those administrative complaints were very broadly worded, and reflected Respondent’s newly-developed position that designated player games constituted “a banking game or a game not specifically authorized by Section 849.086, Florida Statutes.” In that regard, Mr. Zachem testified that a cardroom could have been operating in full compliance with its Respondent-approved internal controls and still have been the subject of an administrative complaint.5/ The position of Respondent was made clear by Mr. Zachem’s statement that if a cardroom has an approved designated player game “where a banker is using their table, their dealer, their facility they [the cardroom] are establishing a bank.”6/ Thus, there can be little doubt that Respondent now construes section 849.086 to mean that player banked games constitute prohibited “banking games” because, by allowing the player banked game in its facility, the cardroom “establishes” a bank against which participants play. After the December public hearing, Ms. Helms was instructed that she was to no longer approve internal controls if they included provisions regarding designated players. That blanket instruction came with no conditions. Since that instruction, the internal controls for at least one facility have been disapproved, despite their being “about the same” as internal controls that had been previously approved for other facilities. Ms. Helms testified that after the December 2015 rule hearing, “things kind of turned around” with regard to Respondent’s position on designated player games. She then rethought her selection of words, stating instead that “things changed.” Given the totality of the evidence in this case, Ms. Helms’ statement that the position of Respondent towards designated player games “turned around” is the more accurate descriptor. Notice of Change On January 15, 2016, the Division published a Notice of Change/Withdrawal of proposed rules. Through the issuance of this notice, the Division withdrew proposed rule 61D-11.005(9). The proposed repeal of rules 61D-11.001(17) and 61D-11.002(5) remained unchanged. Since that notice of change, the preponderance of the evidence demonstrates that Respondent has stopped approving internal controls that propose the offering of designated player games, and has continued to take action against facilities that offer designated player games. Respondent’s statements and actions, including those made in the course of this proceeding, demonstrate that Respondent intends the repeal of rules 61D-11.001(17) and 61D-11.002(5), to effectuate the prohibition of designated player games despite the withdrawal of proposed rule 61D-11.005(9). Lower Cost Regulatory Alternative When it proposed the subject amendments to rule 61D-11 on October 29, 2014, Respondent had not prepared a statement of estimated regulatory costs. Rather, the notice of proposed rule provided that: The agency has determined that this rule will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency. The agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: the economic review conducted by the agency. Any person who wishes to provide information regarding the statement of estimated regulatory costs, or to provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice. On November 19, 2015, in conjunction with the rulemaking process described above, a number of licensed cardroom operators, including some of the Petitioners, timely submitted a good faith proposal for a lower cost regulatory alternative (“LCRA”) to the proposed amendments to chapter 61D-11 that would have the effect of prohibiting designated player games, citing not only the creation of rule 61D-11.005(9), but the repeal of rule 61D-11.002(5). A preponderance of the evidence demonstrates that the LCRA indicated that the rule was likely to directly or indirectly increase regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. The LCRA, as described in the letter of transmittal, also concluded that regulatory costs could be reduced by not adopting the proposed rule amendments, thus maintaining Respondent’s previous long-standing interpretation of section 849.086, and thereby accomplishing the statutory objectives. Respondent employed no statisticians or economists, and there was no evidence to suggest that any such persons were retained to review the LCRA. Though Mr. Zachem did not “claim to be an expert in statistics,” he felt qualified to conclude that the LCRA was “a bit of a challenging representation.” Thus, Respondent simply concluded, with no explanation or support, that “the numbers that we received were unreliable.” Respondent did not prepare a statement of estimated regulatory costs or otherwise respond to the LCRA. Respondent argues that its abandonment of proposed rule 61D-11.005(9), which was the more explicit expression of its intent to prohibit designated player games, made the LCRA inapplicable to the rule as it was proposed for amendment after the January 15, 2016, notice of change. That argument is undercut by the fact that Respondent did not amend its statement of estimated regulatory costs as a result of the change in the proposed rule. Moreover, the evidence is overwhelming that Respondent, by its decision to disapprove internal controls that included designated player games, and its enforcement actions taken against cardrooms offering designated player games, specifically intended the amendments repealing the designated player standards to have the effect of prohibiting designated player games. Thus, despite the elimination of the specific prohibition on designated player games, there was no substantive effect of the change. Therefore, the LCRA remained an accurate expression of Petitioners’ estimated regulatory costs of the proposed rule. Ultimate Findings Respondent has taken the position that the repeal of rule 61D-11.005(9) was undertaken “[f]or clarity with the industry.” That position is simply untenable. Rather, Respondent has taken an activity that it previously found to be legal and authorized and, by repealing the rule and simply being silent on its effect, determined that activity to be prohibited. By so doing, Respondent has left it to “the industry” to decipher the meaning and effect of a statute that is, quite obviously, ambiguous and in need of the interpretive guidance that has been and should be provided by rule. The evidence is conclusive that, by its repeal of rule 61D-11.002(5), Respondent simply changed its mind as to whether playing with a designated player constituted the establishment of a prohibited banking game.7/ It previously determined that such games were lawful under the terms of section 849.086; it has now determined they are not. Though there is substantial evidence to suggest that the reason for the change was related to the renegotiation of the Seminole Compact, the reason is not important. What is important is that Respondent has taken divergent views of the statute in a manner that has substantially affected the interests of Petitioners. For Respondent to suggest that its repeal of the rules is a clarification, a simplification, or a reflection of the unambiguous terms of the statute, and that Petitioners should just tailor their actions to the statute without any interpretive guidance from Respondent, works contrary to the role of government to provide meaningful and understandable standards for the regulation of business in Florida. Respondent cannot, with little more than a wave and well-wishes, expect regulated businesses to expose themselves to liability through their actions under a statute that is open to more than one interpretation, when the agency itself has found it problematic to decipher the statute under which it exercises its regulatory authority.
The Issue The central issue in this case is whether the Respondent is guilty of the violations alleged in the Emergency Order of Suspension; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: At all times material to this matter, the Respondent, Robert L. Seamans, held alcoholic beverage license no. 23-00987, series 4-COP, for the licensed premises located at 11425 S.W. 40th Street, Miami, Dade County, Florida, known as the Lucky Lady. Respondent, age 64, has held alcoholic beverage licenses in the states of New York or Florida since 1963. Respondent has never been charged or reprimanded for a beverage law violation until these proceedings. At all times material to this case, the Respondent employed a barmaid at the Lucky Lady who was known as "Stella." Also present at the Lucky Lady during relevant time periods was a drifter known to the bar patrons as "Tom". In exchange for food and/or the use of the bar kitchen, Tom assisted the barmaids by carrying out trash, stocking the beer cooler, or filling the ice bins. Although Tom was not an employee at the Lucky Lady, he, like many of the regular patrons, had unrestricted use of the Lucky Lady's kitchen area. Sometime prior to April, 1990, a bar located near the Lucky Lady was closed by the Department following an investigation and a determination that controlled substances were being either sold or possessed on the licensed premises. Respondent was aware of the action taken to close the local bar and was further aware that undesirable persons from that bar might attempt to patronize the Lucky Lady. Respondent had considered joining the Department's Responsible Vendors Program but did not. Respondent's policy was to exclude any customer suspected of improper conduct whether related to drugs or other inappropriate activities. To effect that policy Respondent maintained a "barred" list which listed those individuals either by name or description who were not welcome at the Lucky Lady. Employees were instructed to request any person on the barred list to leave the facility. In the event such person refused, the police were to be summoned. On numerous occasions not described below, patrons of the Lucky Lady have observed Respondent escorting persons from the bar who were suspected of, or were known to have exhibited, improper conduct. Respondent relied on his wife, Tanya, to assist him to monitor the interior areas of the Lucky Lady. It was Mrs. Seamans' custom to remain in the licensed premises throughout the evening hours and to watch for any improper conduct. If she observed anything suspicious, she would either report the activity to her husband or to an employee for further investigation and/or action. Unfortunately, Mrs. Seamans sustained a broken hip on April 29, 1990, and was unable to supervise the licensed premises after that date. The Respondent did not obtain a replacement to perform Mrs. Seaman's monitoring function. During May, 1990, Vincent Weiner, a law enforcement investigator employed by the Department, conducted an undercover narcotics investigation of the Lucky Lady. To effect his purpose, Mr. Weiner assumed the name "Vinnie Capio" and began to patronize the licensed premises. On May 5, 1990, Mr. Weiner and a confidential informant went to the Lucky Lady and asked Stella if cocaine were available. Stella directed the two men to the restroom. Once there, they proceeded to complete the transaction with Tom based upon the price which had been negotiated with Stella ($25.00). On this occasion, in exchange for the $25.00, Mr. Weiner received a clear baggie containing a substance which was later analyzed and found to be cocaine. On May 8, 1990, Mr. Weiner returned to the Lucky Lady and again inquired if cocaine were available for purchase. On this date, Stella went to the kitchen and returned with a packet which was exchanged with Mr. Weiner across the bar counter for $25.00. This packet was later analyzed to be cocaine. At all times when Mr. Weiner was seated at the bar counter, other patrons were also present at the counter during the course of the transactions. Mr. Weiner attempted to make a second purchase of cocaine on May 8, 1990. Similar to the prior transaction of that date, Stella went to the kitchen but returned with a written message for Mr. Weiner which she handed to him (instead of another packet). Tide message stated, "he's OUT he got rid of all of them already." Stella did not identify the "he" noted in the message. On May 15, 1990, Mr. Weiner purchased two packets of cocaine at the Lucky Lady. During the first transaction, Stella advised Mr. Weiner to enter the kitchen where he met Tom. Tom then took a packet from an envelope on the kitchen shelf and exchanged it for $25.00. Later in the evening, Mr. Weiner gave $25.00 to Stella while Tom removed another packet from the envelope and handed it to the investigator. This second exchange also took place in the Lucky Lady kitchen. Both of the packets purchased on this date were later analyzed and found to be cocaine. On May 18, 1990, the investigator returned to the Lucky Lady and purchased two packets from Stella and Tom. Again, the exchange took place within the kitchen and the amount for these transactions totalled $50.00. The substance obtained on this date was later analyzed and found to be cocaine. On May 22, 1990, Mr. Weiner was seated at the bar when Stella asked him if he would be needing anything that evening. The investigator placed $25.00 on the bar while Stella went to her purse (located behind the bar counter) and retrieved a packet which she then exchanged for the money. This transaction took place in front of the other patrons seated at the bar. Later in the evening, in the same manner as described above, Mr. Weiner purchased a second packet from Stella. Both of the packets obtained on this date were later analyzed and found to be cocaine. On May 29, 1990, Stella was again behind the bar at the Lucky Lady. On this date, Mr. Weiner negotiated for one packet (which she obtained from her purse located within the bar area) in exchange for $25.00. This packet was later analyzed and found to be cocaine. The Respondent was present within the premises at the Lucky Lady during at least one of the transactions described above. There is no evidence that Respondent was personally involved in the exchanges nor that he was aware of the sales. The Respondent does not dispute that the substance purchased by Mr. Weiner on each of the occasions described above was cocaine. During the course of the investigation Mr. Weiner observed video poker games located within the licensed premises. The games were coin operated and required the player to choose a hand for five card draw poker. By discarding any or all of his original hand, the player attempts to, by the chance of the game, receive a winning hand. The game awards points for Winning hands and subtracts points for losing hands. If a player accrues more points than he paid for, he finishes ahead of the machine. On May 22, 1990, Mr. Weiner finished playing the video poker game with a total of 36 points. That total was 16 more than he had originally purchased. Mr. Weiner consulted Stella regarding the results and she wrote his name and the point total on a piece of paper which she then placed near the cash register. On May 23, 1990, Mr. Weiner returned to the Lucky Lady and requested his "mail." He intended to obtain his winnings related to the video game he had played the day before. He received $9.00 which he believed was the amount he was due for accruing the 36 points. No other explanation as to why Mr. Weiner would receive $9.00 from the bar (except in connection with video game results) was suggested by either party. On May 31, 1990, an Emergency Order of Suspension was executed by the Director of the Division of Alcoholic Beverages and Tobacco. That order was served on the Respondent on June 1, 1990, and the licensed premises have been closed since that time. On June 1, 1990, an inspection of the Lucky Lady premises was conducted by agents of the Department. The Respondent had keys to the video poker games described in Paragraphs 16 and 17.
Recommendation Based on the foregoing, it is recommended that the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco enter a final order revoking the Respondent's alcoholic beverage license no. 23-00987, series 4-COP, for the premises located at 11425 S.W. 40th Street, Miami, Dade County, Florida. RECOMMENDED this 17th day of July, 1990, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of July, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-3447 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 3 are accepted. To the extent the drug transactions are outlined in findings paragraphs 7 through 13, the Department's paragraphs 4 through 12 are accepted; otherwise rejected as irrelevant. To the extent the video poker games are addressed in findings paragraphs 16 and 17, the Department's paragraphs 13-15 are accepted; otherwise rejected as irrelevant. Paragraphs 16 through 18 are accepted. But see also finding paragraphs 3 and 4. Except as addressed in finding paragraph 2, paragraph 19 is rejected as irrelevant. Paragraph 20 is accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: Paragraphs 1 through 3 are accepted. Paragraph 4 is rejected as irrelevant, comment or argument not constituting a factual finding. Paragraph 5 is rejected as recitation of testimony. The video poker games were games of chance in that the machine, of its own design (not a player's choosing) dictated the hand received by the player. Paragraphs 6 through 9 are accepted. It is accepted that Respondent did not personally engage in the illegal sales recounted in the order; otherwise, paragraph 10 is rejected a irrelevant, argument or comment. Paragraphs 11 and 12 are accepted. COPIES FURNISHED: Henry A. Amoon Continental National Bank Building Suite 408 400 Southwest 107th Avenue Miami, Florida 33174 John B. Fretwell Assistant General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007 Stephen R. MacNamara Secretary Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32399-1000 Leonard Ivey, Director Division of Alcoholic Beverages and Tobacco Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000 Joseph A. Sole General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000
The Issue The issue in this case is whether Respondent should approve the renewal of a licensee's annual slot machine gaming license, where, according to Petitioner, the licensee's slot machine gaming area is not "contiguous and connected to" its pari-mutuel facility's "live gaming facility" for wagering on horse races—— if a live gaming facility even exists at the track——and therefore fails to conform to statutory requirements.
Findings Of Fact Parties Petitioner Florida Horsemen's Benevolent and Protective Association, Inc. ("FHBPA"), is a Florida nonprofit corporation whose members include hundreds of Florida licensed horse trainers and thousands of Florida licensed horse owners. FHBPA exists to promote horse racing in the state of Florida and to represent the interests of its members in dealing with the public, the legislature, state regulators, and the tracks. Respondent Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering ("DPMW"), is the state agency responsible for implementing and enforcing Florida's pari-mutuel laws. Its duties include the licensing and regulation of all pari-mutuel activities in Florida. Respondent Calder Race Course, Inc. ("Calder"), is the holder of a pari-mutuel wagering permit. As a permitholder, Calder must apply for an annual license to conduct pari-mutuel operations. See § 550.0115, Fla. Stat. This annual license gives the permitholder authority to conduct the pari-mutuel wagering activity authorized under its permit on the dates identified in the license.1/ At all times relevant to this case, Calder has held a license to conduct thoroughbred horseracing performances. In addition to its license to conduct pari-mutuel operations, Calder has held, at all times relevant hereto, a license to conduct slot machine gaming. Events Leading to the Instant Dispute In July 2009, Calder applied for and received a slot machine license, in accordance with the provisions of section 23, article X of the Florida Constitution, and sections 551.101 and 551.102(4). As a condition of initial licensure, Calder needed to demonstrate its compliance with chapters 551 and, as applicable, chapter 550, Florida Statutes. § 551.104(4), Fla. Stat. A slot machine license must be renewed annually. "[T]o maintain continued authority for the conduct of slot machine gaming," a slot machine licensee must, as a condition of renewal, and at all times, "[c]ontinue to be in compliance with" chapter 551; "[c]ontinue to be in compliance with chapter 550, where applicable[;] and maintain [its] pari-mutuel permit and license in good standing pursuant to the provisions of chapter 550." Id. A slot machine licensee must have a designated slot machine gaming area ("SMGA") where "slot machine gaming may be conducted in accordance with the provisions of" chapter 551. §§ 551.102(2), 551.114, Fla. Stat. Section 551.114(4), which is at the center of the current controversy, specifies where the licensee is allowed to locate its SMGA: Designated slot machine gaming areas may be located within the current live gaming facility or in an existing building that must be contiguous and connected to the live gaming facility. If a designated slot machine gaming area is to be located in a building that is to be constructed, that new building must be contiguous and connected to the live gaming facility. From the outset, Calder intended not to place its SMGA within the current live gaming facility ("LGF") at its track, but in a new casino, to be constructed for the purpose of serving as its slot machine building ("SMB"). Opened in 2010, Calder's casino was nearby its racetrack and grandstand facility. The grandstand, with a large seating area for spectators, was part of a 450,000 square foot building. When the casino first opened its doors, this grandstand building was Calder's LGF. Calder's SMB (the casino), when built, was not "contiguous" to the current LGF (the grandstand) under any ordinary understanding of the word "contiguous," which clearly denotes actual contact——touching. Nor was the SMB directly "connected to" the LGF in accord with the image that most readily comes to mind when thinking about how two contiguous structures would be connected to each other, for in that image some physical element of one structure is linked or joined to some physical element of the other, which latter shares a common boundary with the former, being contiguous thereto. This departure from the plain meaning section 551.114(4) resulted from DPMW's decision to give licensees "leeway" in satisfying the strict statutory requirement that an SMB, if used as the location for the SMGA, be "contiguous and connected to" the current LGF (the "CCT Requirement"). DPMW first relaxed the CCT Requirement for Pompano Park, a standardbred harness racetrack in Pompano Beach, Florida. A few years before Calder obtained its slot machine license, Pompano Park had acquired one. Pompano Park had wanted to place its SMGA in a new SMB, just as Calder later would do, and sought DPMW's guidance regarding compliance with the CCT Requirement. DPMW informed Pompano Park that the agency would be satisfied if the two buildings were "connected" by a covered walkway (rather than to each other). So, Pompano Park "connected" its newly constructed SMB to its then current LGF (a grandstand) by a sidewalk, and DPMW approved the configuration by issuing, and renewing, Pompano Park's slot machine license. In 2009, Calder wanted the same deal for its SMB. DPMW had no real choice but to go along. Having previously construed the CCT Requirement as demanding no more than a connecting sidewalk between the SMB and the LGF, DPMW had formulated an interpretive statement regarding section 551.114(4) for Pompano Park so broadly worded as to apply generally to all slot machine licensees. It therefore could have surprised no one when DPMW told Calder that its proposed SMB would be sufficiently "contiguous and connected to" the existing grandstand if there were a covered walkway between the structures. Calder made it so. At the time Calder built its casino, FHBPA did not object to DPMW's slots-friendly construction of section 551.114(4), which gave the green light to stand-alone SMBs——and, for that reason, should have flashed a yellow warning signal to the horsemen. Calder's original set-up, however, promised to benefit FHBPA because section 551.104(10)(a) provides that "[n]o slot machine license or renewal thereof shall be issued to an applicant holding a permit under chapter 550 to conduct pari- mutuel wagering meets of thoroughbred racing unless the applicant has on file with [DPMW] a binding written agreement between the applicant and the Florida Horsemen's Benevolent and Protective Association, Inc., governing the payment of purses on live thoroughbred races conducted at the licensee's pari-mutuel facility." Calder, in short, was required to enter into a revenue sharing agreement with FHBPA under which slot machine revenues would be used to supplement the purses paid on the races conducted at Calder's track. As of the final hearing, pursuant to the FHBPA/Calder Supplement Agreement ("Statutory Contract"),2/ FHBPA was collecting (for the benefit of its members) between $8 million and $9 million per year from Calder's slot machine gaming operations. The interesting thing about section 551.104(10) is that not only does it require Calder, as a slot machine licensee, to have a binding written agreement with FHBPA, as the statutorily designated (by name) thoroughbred horsemen's bargaining agent; but also, FHBPA is forced thereunder to enter into the agreement with Calder. In this regard, section 551.104(10)(c) provides that if the parties are unable timely to reach an agreement, they must submit to "mandatory binding arbitration to resolve the[ir] disagreement," at the conclusion of which "the arbitration panel shall present to the parties a proposed agreement that the majority of the panel believes equitably balances the rights, interests, obligations, and reasonable expectations of the parties." § 551.104(10)(c)3., Fla. Stat. The parties "shall [then] immediately enter into such agreement, which shall satisfy the requirements of [section 551.104(10)](a) and permit issuance of the pending annual slot machine license or renewal." Id. The statute literally gives FHBPA no choice but to do business with Calder as long as Calder is a slot machine licensee. If FHBPA had any misgivings about DPMW's interpretation of the CCT Requirement in and around 2010 and during the several years thereafter, the slot machine revenue stream flowing to FHBPA pursuant to the Statutory Contract must have ameliorated them. By allowing Pompano Park and Calder to build freestanding, noncontiguous SMBs, however, DPMW (perhaps unwittingly) had opened a door that Calder strode through in 2015, when it began tearing down the grandstand complex, a demolition project which was completed in 2016.3/ Calder could do this without in any way affecting the casino/SMB because the SMB was not actually contiguous and connected to the LGF. Had the SMB truly been contiguous and connected to the LGF, Calder could not have demolished the LGF without directly impacting, if not partially tearing down, the SMB. In that event, new construction would have been needed to restore the SMB's integrity and to replace the LGF to which the SMB must be contiguous and connected.4/ As it happened, Calder razed the grandstand, cleared the debris, and built——nothing. The question naturally arises, therefore, whether Calder currently has a "live gaming facility." FHBPA asserts that Calder lacks a legally sufficient LGF because there is no longer an occupiable structure near the track from within which patrons may watch and place wagers on live horse races. DPMW and Calder disagree with FHBPA. They contend that Calder has a "live viewing area" or "live viewing locations," which include some physical amenities that, taken as a whole, constitute an LGF within the ambit of section 551.114(4). There are no genuine disputes regarding the material facts surrounding Calder's so-called "live viewing locations." The primary viewing area is located in front of the final stretch of the racetrack, at a spot called the "apron." There are some outdoor seats and tiki huts on the apron, and, during the race meet, Calder erects a collapsible canopy tent there, which, despite the absence of walls, provides a bit of shelter for wagering machines, video screens, and, of course, patrons, for whom additional outdoor seating is provided. At the "viewing locations" on and around the apron, patrons can watch and place bets on horse races. Conveniently, walk-around tellers are usually nearby to take wagers from patrons who venture out from the shaded area under the canopy. A food truck is frequently present, too, so patrons might have a trackside dining option. All of this is only a short distance from the casino, and there is a concrete walkway along the route, so patrons do not need to step on grass or parking lot pavement if they stroll from the SMB to the apron or vice versa. And, although there is no longer a ceiling or other covering protecting the entire length of the sidewalk from the elements, patrons at least do not need to cross a public street, waterway, or similar barrier to get from the SMB to the "live viewing area" on the apron, nor must they leave the confines of Calder's property. In July 2017, DPMW granted Calder's application for the renewal of its slot machine license, for the fiscal year 2017-18. DPMW took this action knowing that Calder had demolished its grandstand and being fully aware of the facts relating to Calder's trackside "live viewing area." Behind DPMW's issuance of the renewal license lay its interpretation of section 551.114(4)'s "live gaming facility" nomenclature as including an outdoor "viewing area" such as the apron at Calder's track; and the agency's interpretation of the statute's CCT Requirement, under which the strict original text, "must be contiguous and connected to," becomes the lax, "must be no farther than a short walk from, and connected by a paved pathway that crosses no streets, rivers, or similar barriers, to." On October 25, 2017, FHBPA filed a Petition Challenging an Agency Statement as a Rule, alleging that DPMW's interpretations of "live gaming facility" and "contiguous and connected to," as manifested by the renewal of Calder's slot machine license, constituted unadopted rules. See Fla. Horsemen's Benevolent & Protective Ass'n v. Dep't of Bus. & Prof'l Reg., Case No. 17-5872RU, 2018 Fla. Div. Adm. Hear. LEXIS 654 (Fla. DOAH Sept. 4, 2018)(the Rule Challenge). FHBPA lost its section 120.56(4), Florida Statutes, challenge to these agency statements at the trial level and did not appeal the ALJ's decision. DPMW and Calder view their last victory as significant, but the Rule Challenge has no bearing on this case. Whether or not DPMW's interpretations of section 551.114(4) are rules by definition, they are not controlling here. If they are unadopted rules, then the undersigned, of course, cannot apply them as authoritative principles in determining any party's substantial interests. See § 120.57(1)(e), Fla. Stat.5/ And if they are not unadopted rules, as was found in the Rule Challenge, then by definition the interpretive statements do not have the force and effect of law. Simply put, DPMW cannot have nonliability under section 120.56(4) and authoritative statements, too. At bottom, therefore, DPMW's interpretative statements constitute legal arguments to be evaluated on the same footing as any other party's arguments. In this regard, it is perhaps worth noting that section 120.56(4) neither requires nor authorizes the ALJ to determine whether the alleged unadopted rule is a correct reading of the underlying statute. Accordingly, the ALJ in the Rule Challenge rightly declined to reach that issue. Id. at *37. In this case, by contrast, ascertaining the originally intended meaning of section 551.114(4), so that the legislature's policy respecting SMBs may be carried out, is the whole ballgame.6/ In May 2018, Calder filed an application to renew its slot machine license for 2018-19. On July 9, 2018, DPMW granted Calder's application and issued the renewal license, taking putative final agency action. Not long thereafter, FHBPA filed a petition requesting a hearing to contest DPMW's issuance of a renewal license to Calder for fiscal year 2018-19. Regarding the timeliness of FHBPA's petition, it is undisputed that DPMW did not give FHBPA a clear point of entry into an administrative proceeding to determine the correct agency action to take on Calder's license renewal application. Consequently, as will be discussed below, the issuance of Calder's renewal license, despite outward appearances, is not final agency action, as a matter of law, if the decision to approve Calder's application determines FHBPA's substantial interests. In other words, because an opportunity for a hearing was not clearly offered to, and thereafter waived via inaction by, FHBPA, its petition was not untimely, provided FHBPA has standing to proceed (which is disputed). The Real Agency Action of Interest Because Calder must remain continually in compliance with chapter 551 to maintain its license to conduct slot machine gaming, DPMW could not and cannot lawfully renew Calder's license without first determining that Calder remains in compliance with all provisions of the slot machine gaming law. Thus, by necessary implication, DPMW's approval of Calder's application for renewal of licensure reflects and manifests the agency's conclusion that Calder continues to conform to, inter alia, the CCT Requirement. There is no dispute about this. There is also no dispute that Calder's original LGF, the grandstand, had been demolished by the time of the instant renewal application, and that in its place, at the trackside apron, near the spot where the grandstand had once stood, Calder had established a "live viewing area" as described above, whose only "connection to" the SMB was (and remains) a paved walkway. The real agency action of interest to FHBPA is not the renewal of Calder's license per se——although that's important, to be sure, because the license preserves a real-life status quo of facts on the ground that FHBPA considers harmful to its interests; rather, the real determination at issue is DPMW's loose reading of section 551.114(4), without which the approval of Calder's application could not have happened. FHBPA contends that DPMW has not only misapplied section 551.114(4) (in renewing Calder's license) but also misinterpreted the statute (in forming a generally applicable understanding of the CCT Requirement that waters down the plain statutory language). The issuance of the license was an overt, formal agency action. The statutory interpretation was covert and informal but no less an agency action. When DPMW told Calder in 2009 (and Pompano Park some time earlier) that the CCT Requirement could be satisfied by installing a covered walkway between the SMB and the LGF, it effectively rendered a declaratory statement, albeit without following the procedure set forth in section 120.565. Later, when DPMW indicated to Calder that its current LGF did not need to be a building, because an outdoor, trackside "viewing area" with a canopy tent located near the place where the former LGF had once stood would be good enough for section 551.114(4), the agency again provided Calder with the functional equivalent of a declaratory statement, absent the formalities. FHBPA was never given a clear point of entry to be heard in these matters. Attention is being drawn to the agency's articulation, sub silentio, of these declaratory statements-in-fact because DPMW and Calder would like to characterize the action at issue here as being strictly a two-party transaction involving "just" the agency's renewal of Calder's slot machine license. But, that is not true. The renewal of Calder's license necessarily means, to repeat for emphasis, that DPMW has determined that Calder's SMB is "contiguous and connected to" its "LGF" (or "live viewing area," as they understandably prefer to call it), because Calder is required to be in compliance with section 551.114(4) to maintain its continued authority to conduct slot machine gaming operations. These are very real, very consequential interpretive statements. If FHBPA's substantial interests may be affected by these agency decisions regarding the meaning of section 551.114(4), as FHBPA asserts, then its right to a hearing under sections 120.57 and 120.569 concerning DPMW's statutory interpretations has not been waived, because DPMW failed to publish advance notice thereof in accordance with section 120.565(3).7/ In sum, while this case appears on the surface to be a challenge to the agency action that was taken in plain view, i.e., the renewal of Calder's slot machine license, what is really happening is a determination of the correct understanding of section 551.114(4), which is a consequence of DPMW's having provided Calder, behind the scenes, with putatively authoritative interpretations of key statutory terms. Assuming DPMW's interpretive statements affect or determine FHBPA's substantial interests, FHBPA's right to a hearing thereon is not legally tied to Calder's license renewal and, indeed, could have been exercised independent thereof. Once the statutory meaning is finally sorted out, the question——which is secondary to a correct understanding of section 551.114(4)——of whether Calder may continue lawfully to conduct slot machine gaming operations without making changes to its existing pari-mutuel facilities will be easily answered because the material facts about the licensee's current facilities are not genuinely disputed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering, enter a final order denying Calder's application for renewal of its slot machine license for the fiscal year 2018-19. DONE AND ENTERED this 24th day of May, 2019, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of May, 2019.
The Issue The issue is whether Respondent accessed two slot machines without logging the purposes for opening the machines, in violation of Florida Administrative Code rule 61D-14.023(2), as in effect in March and April 2010.
Findings Of Fact At all material times, Respondent has been employed as a licensed slot machine technician with Isle of Capri. A slot machine technician maintains and repairs slot machines. Respondent holds a slot machine professional individual occupational license, bearing license number 7463121-1051. As relevant to this case, a locked main door provides access to the main compartment of the slot machine. Inside the main compartment of the slot machine is the MEAL book for logging all openings of the main compartment. Within the main compartment also is a locked logic compartment, which contains the computer chip that controls the operations of the slot machine. The logic compartment is also secured by a special tape that is broken whenever someone accesses the logic compartment. Within the main compartment also are a coin hopper, which holds coins that are available for payouts, as well as a locked drop box or billbox, which holds coins and bills that are collected periodically by the drop team. Although it is not entirely clear, a belly door apparently permits access to the drop box or billbox without going through the main compartment. Several times weekly, a drop team enters each slot machine, through the belly door, to empty the drop box or billbox. On March 28, 2010, and April 2, 2010, Respondent entered the main compartments of two slot machines in connection with his employment. The MEAL book for each machine was available inside the machine to log the activity. On these occasions, Respondent did not enter the logic compartments of these two slot machines. On each of these occasions, Respondent logged the times in and out of each slot machine, but failed to log the purpose for his entering each machine. For the March 28 activity, 24 other entries are shown on the same page of the MEAL book, and all 24 report the times in and out and the reasons why the persons entered the machines. For the April 2 activity, five other entries are shown on the same page of the MEAL book, and all five report the times in and out and the reasons why the persons entered the machines. Isle of Capri determined that Respondent's failure to log reasons for entering the slot machines on March 28 and April 2 violated Isle of Capri policies. The resulting "performance document" notes that Isle of Capri had previously counseled Respondent for similar failures to make the required entries in MEAL books. The "performance document" states that Isle of Capri will retrain Respondent, but a repeat of this conduct may result in termination. As required by the performance document, to reflect understanding of the issues discussed in the document, Respondent signed the document, but did so "under protest." On November 6, 2009, Petitioner sent Respondent a "warning letter." The letter explains that, on October 20, 2009, Respondent failed to complete the MEAL book with the time in and out of a specific slot machine. The letter states that this conduct violates rule 61D-14.024, which requires a log of logic compartment door openings and closings so as to include the time and reason for the opening. The letter warns that any future violations of slot machine laws or rules could result in an administrative fine or suspension or revocation of Respondent's slot machine occupational license. On February 5, 2010, Petitioner sent Respondent a "warning letter." The letter explains that, on November 26, 2009, Respondent failed to complete the MEAL book with the time in and out of a specific slot machine. The letter states that this conduct violates rule 61D-14.023(2). The letter warns that any future violations of slot machine laws or rules could result in an administrative fine or suspension or revocation of Respondent's slot machine occupational license. Respondent offered multiple defenses, including entrapment (never explained) and unfairness (the drop team is not required to log their openings of the belly door). The lone relevant defense was that Respondent had entered the main compartment, not the logic compartment, as Count I charged. It was apparent to the Administrative Law Judge, however, that Respondent recognized this to have been a pleading error by Petitioner, and Respondent was not prejudiced by the Administrative Law Judge's allowing Petitioner to amend the Administrative Complaint to substitute "main compartment" for "logic compartment." Two important mitigating factors apply. As testified by the Isle of Capri general manager, electronic monitoring of all entries into the slot machine has rendered the rule obsolete. Likely for this reason, the current version of rule 61D-14.023 no longer contains the requirement set forth in former rule 61D-14.023(2). On the other hand, nothing in the record suggests that Respondent relied on the proposed changes to rule 61D-14.012 when he failed to record the reasons for entering the main compartment on two occasions in the spring of 2010. After observing Respondent testify, the Administrative Law Judge finds that Respondent tends to view himself as the final arbiter of the rules that govern licensed slot machine technicians. Respondent's obstinacy, recent past problems in documenting the servicing of secured areas of slot machines, and commission of two violations (although in a single count) militate in favor of a fine that will refocus Respondent's attention on the critical, well-defined role that he plays within a sensitive, carefully regulated industry.
Recommendation It is RECOMMENDED that the Division of Pari-Mutuel Wagering enter a final order dismissing Count II of the Administrative Complaint, finding Respondent guilty of Count I of the Administrative Complaint, and imposing an administrative fine of $1000. DONE AND ENTERED this 9th day of November, 2011, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of November, 2011. COPIES FURNISHED: Neil E. Waigand, Jr. 906 North Riverside Drive, Apartment 8 Pompano Beach, Florida 33062-4623 David Perry, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 40 Tallahassee, Florida 32399-2202 Milton Champion, Director Department of Business and Professional Regulation Pari-Mutuel Wagering 1940 North Monroe Street Tallahassee, Florida 32399-2202 Layne Smith, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street, Suite 40 Tallahassee, Florida 32399-2202
The Issue The issue presented is whether Respondent is guilty of the allegations in the Administrative Complaint filed against him, and, if so, what disciplinary action should be taken against him, if any.
Findings Of Fact At all times material hereto, Respondent Clivalee Mundle was the holder of a slot machine occupational license issued by the State of Florida and numbered 7937616-1051. That license expired June 30, 2008, and has not been re-issued. At all times material hereto, Respondent was employed as a slot supervisor at The Isle Casino and Racing at Pompano Park, a licensed Florida pari-mutuel and slot machine facility located in Pompano Beach, Florida. On November 16, 2007, a senior attendant reported to the slot chip manager an incident involving Respondent. She reported that she had gone to the cage service window to use the computer. The cage is where the money is held in a casino. She reported that while she was there, Respondent came in and began assisting her. When he reached into his coat, a $100 bill fell out and onto the floor. She placed her foot next to the bill and asked Respondent if it were his. Respondent picked it up and acted, in her opinion, nervous. Employees at the casino are instructed to keep their own money in their wallets and to not have loose cash on them when they are on the casino floor. They are also instructed to keep any casino money in sight so that the money surveillance cameras can track it. Based upon the report he received, the slot chip manager contacted surveillance personnel and requested them to view the surveillance videos that recorded the incident. Upon doing so, those employees reported to him that Respondent had earlier obtained a $100 bill from the cage to pay out a jackpot on slot machine A-50-02 but that he subsequently never went to that machine to do so. Further, the videos showed that the jackpot on that machine had already been paid before Respondent obtained the $100 bill he obtained from the cage. Based upon that surveillance report, the slot chip manager viewed surveillance videos from prior dates. The review of the surveillance videos revealed the following transactions. On November 8, 2007, Respondent was at the cage service window filling out a paid-out cash slip to obtain a $100 bill when the slot chip manager came in. Rather than completing what he was doing, Respondent folded the form and put it in his pocket. Later that day, he turned in the paid-out slip and received a $100 bill. The form he filled out stated that he needed the money to settle a guest dispute. However, he never gave the money to anyone between the time he obtained it and the time he left the casino at the end of his shift. The surveillance videos for November 9, 2007, show Respondent filling out a paid-out slip at the cage, receiving a $100 bill, and concealing that bill inside a piece of paper in his coat pocket. The slip he filled out represented that he was obtaining the money for a guest dispute at machine A-15-05. Later that same day, he filled out another cage slip for a jackpot pay-out at machine A-50-08. When he received the $100 bill requested, he put it under a piece of paper on a clipboard. Surveillance videos showed that the jackpot on that machine had been paid out before Respondent obtained the $100. Surveillance videos did not show Respondent giving either of those $100 bills he obtained on November 9 to anyone in the casino. The videos show that on November 13, 2007, Respondent paid a jackpot to a customer who then gave Respondent her player's card. Respondent took her player's card to the player's card window, had a discussion with the attendant, and then returned to the player and returned her card. He then went to the cage service area, filled out a cage paid-out slip for $100 for guest satisfaction, placed the $100 underneath papers on a clipboard, and left the cage area. Between that time and the end of his shift, Respondent did not give that money to anyone. None of the monies Respondent obtained from the casino cage as described in the above Findings of Fact was used for a legitimate business purpose. Respondent failed to complete the transactions for which he allegedly received the monies. Rather, Respondent retained these monies for his own use. Respondent admits to dropping the $100 bill on November 16, 2007. His explanation is that he had previously left the casino and had picked up some relatives and taken them to his home. He stated that the $100 bill was given to him by one of those relatives so he could pick up formula and diapers on his way home. The surveillance videos do not show Respondent leaving the casino or returning prior to the incident. On November 29, 2007, Respondent was terminated from his employment by the casino. On February 7, 2008, The Isle Casino and Racing at Pompano Park issued to Respondent a Notice of Barrment [sic], which barred Respondent from the premises of the casino permanently.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered (1) finding Respondent guilty of the allegations in the Administrative Complaint filed against him, (2) excluding Respondent from all facilities of all slot machine licensees in the State of Florida, and (3) finding Respondent ineligible for a slot machine occupational license. DONE AND ENTERED this 11th day of February, 2009, in Tallahassee, Leon County, Florida. S LINDA M. RIGOT Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of February, 2009. COPIES FURNISHED: Clivalee Mundle 4689 Northwest 22nd Street Coconut Creek, Florida 33063 David Perry, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 40 Tallahassee, Florida 32399-2202 Ned Luczynski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street, Suite 40 Tallahassee, Florida 32399-2202 David J. Roberts, Director Division of Pari-Mutuel Wagering Department of Business and Professional Regulation 1940 North Monroe Street, Suite 40 Tallahassee, Florida 32399-2202
