Findings Of Fact The 1996 session of the legislature enacted Chapter 96-364, Laws of Florida, 1996, which created, effective January 1, 1997, Section 849.086, Florida Statutes. Section 849.086, Florida Statutes, authorizes pari-mutuel permitholders which meet certain conditions to operate cardrooms on those days when live racing is conducted at their respective pari-mutuel facilities. Section 849.086(1), Florida Statutes, sets forth the legislative intent with regard to cardroom facilities and reads as follows: Legislative Intent.--It is the intent of the Legislature to provide additional entertain- ment choices for the residents of and visitors to the state, promote tourism in the state, and provide additional state revenues through the authorization of the playing of certain games in the state at facilities known as cardrooms which are to be located at licensed pari-mutuel facilities. To ensure the public confidence in the integrity of authorized cardroom operations, this act is designed to strictly regulate the facilities, persons, and procedures related to cardroom operations. Furthermore, the Legislature finds that authorized games as herein defined are considered to be pari- mutuel style games and not casino gaming because the participants play against each other instead of against the house. Respondent is the agency granted regulatory authority with regard to cardroom operation pursuant to a grant of rulemaking power set forth in Section 849.086(4)(a)-(f), Florida Statutes as created by Section 20 of Chapter 96-364, Laws of Florida, 1996. Section 849.086(4)(a)-(f), Florida Statutes, reads as follows: Authority of Division. - The Division of Pari-mutuel Wagering of the Department of Business and Professional Regulation shall administer this section and regulate the operation of cardrooms under this section and the rules adopted pursuant thereto, and is hereby authorized to: Adopt rules, including, but not limited to: the issuance of cardroom and employee licenses for cardroom operations; the operation of a cardroom; recordkeeping and reporting requirements; and the collection of all fees and taxes imposed by this section. Conduct investigations and monitor the operation of cardrooms and the playing of authorized games therein. Review the books, accounts, and records of any current or former cardroom operator. Suspend or revoke any license or permit, after hearing, for any violation of the provisions of this section or the administrative rules adopted pursuant thereto. Take testimony, issue summons and subpoenas for any witness, and issue subpoenas duces tecum in connection with any matter within its jurisdiction. Monitor and ensure the proper collec- tion of taxes and fees imposed by this section. Permitholder internal controls are mandated to ensure no compromise of state funds. To that end, a roaming division auditor will monitor and verify the cash flow and accounting of cardroom revenue for any given operating day. Respondent is also provided additional rulemaking authority with regard to cardrooms through Section 21 of Chapter 96-364, Laws of Florida, 1996, which amended and added subsections (12) and (13) to Section 550.0251, Florida Statutes. Those subsections read as follows: The division shall have full authority and power to make, adopt, amend, or repeal rules relating to cardroom operations, to enforce and to carry out the provisions of s. 849.086, and to regulate the authorized cardroom activities in the state. The division is authorized to adopt emergency rules prior to January 1, 1997, to implement the provisions of s. 849.086. * * * The division shall have the authority to suspend a permitholder's permit or license, if such permitholder is operating a cardroom facility and such permitholder's cardroom license has been suspended or revoked pursuant to s. 849.086. The Term "Pot" Proposed rule 61D-11.001(l2) provides: 'Pot' means the total amount wagered in a hand or round of cards which shall not exceed $10.00 in chips or tokens. Respondent asserts that statutory authority for this rule is Section 849.085(2)(a) and Section 849.086(8)(b), Florida Statutes, which read respectively as follows: 'Penny-ante game' means a game or series of games of poker, pinochie, bridge, rummy, canasta, hearts, dominoes, or mah-jongg in which the winnings of any player in a single round, hand or game do not exceed $10 in value. * * * The winnings of any player in a single round hand or game may not exceed $10 in value. The fee charged by the cardroom for participation in the game shall not be included in the calculation of the limita- tion on the pot size provided in this paragraph. The cardroom act does not set forth a definition of the term "pot", nor does Section 849.085(2)(a), Florida Statutes, contain a pot limit. The statutory language is unambiguous: The "winnings of any player in a single round, hand, or game may not exceed $10 in value." The limitation on winnings is further referenced in the language of Section 849.086(8)(b), Florida Statutes, excluding "the calculation of the limitation on the pot size" from the $10 winnings limitation by any player. Respondent acknowledges that its construction of Section 849.086(8)(b), and Section 849.085(2)(a), Florida Statutes, requires that the term "any player" be construed to mean "all players", contrary to the clear statutory wording. This same agency construction, applied to Section 849.086(8)(b), Florida Statutes, renders meaningless the term "the calculation of" the limitation on pot size which term exists because pot size will vary, i.e. when multiple winner card games are played. The impropriety of Respondent's definition of the term pot to include an improper limit of $10 in terms of amounts wagered is demonstrated by the game of Hi-Lo Seven Card Stud, a form of poker set forth in Hoyle's Modern Encyclopedia Of Cardgames in which there are two separate and distinct winners, the high winner and the low winner. These two separate and distinct winners each may win $10 or less, though the total pot size limit calculated in accordance with the rules of such game may equal but not exceed $20. Respondent's proposed rule 61D-11.002(2), which is unchallenged, authorizes cardgames to be played in a manner set out in Hoyle's Modern Encyclopedia of Cardgames. Cardroom operators are also authorized by the cardroom act to charge a "rake" which is defined as a set fee or percentage of the pot assessed by the cardroom operator for providing the services of the dealer, table, or location for playing the authorized game. Section 849.086(2)(k), Florida Statutes. Where the cardroom operator charges a rake as a percentage of the pot, the amount wagered in a game such as Seven Card Stud may exceed $10, as demonstrated by Petitioners' Exhibit 1 in which such a game was conducted with the cardroom operator charging a rake as a percentage of the pot. The amount wagered inclusive of the rake may exceed $10, but the pot available for the winner at the end of the game after deduction of the rake is $10. As established by testimony of Petitioners' expert at the final hearing and Petitioner's exhibit 1, dealers are trained to specifically control the pot size through such practices as the placement of bets by players in front of their cards. Bets are moved into the pot only by the dealers. The stacking of chips in easily observable and countable $l stacks and in rows of 5 assists the dealer who stops bets where, if all remaining players bet, the $10 per player winnings limit would be exceeded. This precludes a situation from arising in which chips not accounted for as rake or as winnings within the $10 "winnings of any player" limitation are in the pot at anytime during the game. Section 849.086(8)(a), Florida Statutes, provides that the calculation of the limitation on pot size is dependent on the "winnings of any player in a single round, hand or game" not exceeding $10. Respondent's definition of the term "pot" in proposed rule 61D- 11.001(12) as an absolute maximum amount of $l0 based on wagers, rather than a limitation on the winnings of card games with multiple winners, or winnings of any player in a single round, hand, or game, exclusive of the percentage rake that may be charged, is found to be without statutory authority and is arbitrary and capricious. The Terms "Game", "Hand", and "Round" Proposed rule 61D-11.001(6) provides: 'Game' means a card game which results in a winner who achieves a desired result required to win a pot not to exceed $10.00 in chips or tokens. Proposed rule 61D-11.001(7) provides: 'Hand' means a single game of cards, one deal of cards to each player based on the rules of the game, resulting in a winner of a pot not to exceed $10.00 in chips or tokens. Proposed rule 61D-11.001(14) provides: 'Round' means a cycle of bets made by the players following the deal of the cards and resulting in a player winning the pot which shall not exceed $10 in chips or tokens. Respondent includes the same $10 pot limitation in the challenged definition of the term "game" found in proposed rule 61D-11.001(6);"hand" found in proposed rule 61D-11.001(7); and "round" found in proposed rule 61D- 11.001(14). Upon the same findings noted above relative to the definition of "pot", such rules are found to be in excess of Respondent's statutory authority and are arbitrary and capricious. Additionally, Section 849.086(8)(a), Florida Statutes, has defined authorized games to mean those games "authorized by s. 849.085(2)(a)". In turn, Section 849.085(2)(a), Florida Statutes, includes non-card games within the definition of authorized games, i.e. dominoes and mah-jongg. Consequently, Respondent's limitation of the term "game" to only cardgames is found to be in excess of the statutory authorization and is arbitrary and capricious. The term "round" means the cycle of bets in a single game and there may be several cycles of bets in a single game, a fact conceded by Respondent. This was demonstrated by Petitioners' Exhibit 1 in the playing of Seven Card Stud - one winner. While the winner of such game received $10, the winnings were based on several cycles of bets conducted over the course of the single game. Respondent has artificially restricted the term "round" to a cycle of bets following the deal of the cards with such single cycle resulting in a player winning a pot of $10 or less. Respondent's rule definition in proposed rule 61D-11.001(14) limits statutorily authorized activity, exceeds the Respondent's statutory authority and is arbitrary and capricious. The Term "Jackpot" Proposed rule 61D-11.001(10)(b) defines the term "jackpot" to mean: Any amount wagered in a round, hand, or game in excess of $10 in value paid out to a player or players once a desired result is achieved; Any amount wagered in a round, hand, or game in excess of $10 in value which is accumulated and paid out to a player or players once a desired result is achieved; or Any prize or cash award in excess of $10 in value paid out to a player or players once a desired result is achieved. A "jackpot" in the context of cardrooms occurs when the house deducts from each hand played a certain amount which is accumulated over many hands and is placed in a separate jackpot fund and paid out when there is a defined occurrence such as a player achieving a royal flush. The definition of jackpot in 61D-11.001(10)(a) is in substance and effect the same definition as the term "pot" found in proposed rule 61D- 11.001(12). This definition would preclude the playing of the authorized game Hi-Lo Seven Card Stud in which the winnings of two separate and distinct players are $10 but in excess of $10 in the aggregate. Proposed rule 61D-11.001(10)(a) is found, on the basis of the same findings set forth relative to Respondent's definition of "pot" in proposed rule 61D-11.001(12), to exceed Respondent's statutory authority and to be arbitrary and capricious. The definition of jackpot set forth in proposed rule 61D-11.001(10)(b) would preclude the playing of the authorized game of Hi-Lo Seven Card Stud where the amount wagered is accumulated over several betting cycles prior to the winners being declared with the amount awarded to each winning player being $10 or less but with the aggregate amount awarded to all players exceeding $10 in value. Upon the same findings set forth relative to the Division's definition of the term "pot", proposed rule 61D-11.001(10)(b) is found to exceed Respondent's statutory authority and is arbitrary and capricious. Likewise, the definition of jackpot set forth in proposed rule 61D- 11.001(10)(c) is reasonably susceptible to an interpretation that would preclude the playing of the authorized game of Hi-Lo Seven Card Stud in which there are two separate and distinct winners of $10 or less but with winnings of more than $10 in the aggregate. Again, upon the same findings set forth relative to Respondent's definition of the term "pot", proposed rule 61D-11.001(10)(c) is in excess of statutory authority and is arbitrary and capricious. The Term "Tournament" Proposed rule 61D-11.001(l7) provides: 'Tournament' means any competition involving more than one round, hand, or game where the winner of the competition or the runners-up receive any prize or cash award in excess of $10 in value. The cardroom statute, Section 849.086(2)(a), Florida Statutes, defines "authorized games" as those games authorized by Section 849.085(2)(a), Florida Statutes. In turn, Section 849.085(2)(a), Florida Statutes, provides: 'Penny-ante game' means a game or series of games of poker in which the winnings of any player in a single round, hand or game do not exceed $10 in value. Section 849.085(2)(a), Florida Statutes, does not require that the winnings of the player be paid at the conclusion of each single round, hand, or game nor does it require that the player have "won" such single round, hand or game. Further, Section 849.085(2)(a), Florida Statutes, imposes no limit on pot size. The statute does, however, only authorize those winnings which do not exceed $10 in value. Petitioners' expert testified at final hearing to the circumstance of a group of players that pay an entry fee, receive tournament chips, play a specific number of hands of cards and at the end of the designated number of hands the winner or winners who hold the most chips will receive funds which total an amount in excess of $10 but do not exceed $10 per hand played throughout the tournament. The proposed rule and Section 849.085(2)(a), Florida Statutes, clearly permit only $10 payments to game winners. Under the scenario to which Petitioner's expert testified, payments are made at the conclusion of the tournament, in amounts which exceed that authorized by the cardroom statute. Consequently, it is found that such results provide no basis to determine that Respondent's proposed rule 61D-11.001(17), defining the term tournament, is invalid. Prohibitions Proposed rule 61D-11.005(9) provides: Tournaments and jackpots are prohibited. Proposed rule 61D-11.005(9) is found to be in excess of Respondent's statutory authority and arbitrary and capricious only in regard to the prohibition of jackpots. This finding is made on the basis of those findings noted above relating to invalidity of the definition of "Jackpot" in proposed rule 61D-11.001(10). Proposed rule 61D-11.005(10) provides: An accumulation of $10 values based upon the actual number or an average number of rounds, hands, or games played during a competition where the winner of the competition and the runners up receive the accumulated amount, a portion thereof, or the prize representing the accumulated amount or a portion thereof is prohibited. On the basis of findings noted above relative to proposed rule 61D- 11.001(17), which defines the term "tournament", proposed rule 61D-11.005(10), is not in excess of Respondent's statutory authority and is not arbitrary and capricious. Proposed rule 61D-11.005(11) provides: No amount wagered by a player, ante, or participation fee collected by the house shall be accumulated into a pool for purposes of paying out the accumulated amount once a desired result is achieved by a patron or patrons. On the basis of findings previously set forth relating to proposed rule 61D-11.001(10), the definition of "jackpot" and in particular subsection (10)(b), the prohibition of proposed rule 61D-11.005(11) that no amount wagered may be accumulated even within a single hand or game, is in excess of Respondent's statutory authority and is arbitrary and capricious. Ordinance Requirement Proposed rule 61D-11.007 provides in pertinent part: A licensed pari-mutuel permitholder desiring to operate a cardroom must submit to the Division proof that the county commission of the county which the permit- holder intends to operate the cardroom has passed an ordinance approving cardroom operations. The proof of the passage of a county ordinance shall consist of a copy of the certified ordinance as filed with the Secretary of State. The effective date of the ordinance shall be upon filing with the Secretary of State or later if so prescribed. If a cardroom ordinance is repealed or amended, the effective date of the repeal or amendment shall be upon filing with the Secretary of State or later if so prescribed. If the cardroom ordinance is repealed, cardroom operation shall be ceased upon the effective date of repeal. * * * (8) An applicant for an annual cardroom license shall complete a cardroom license application, BPR Form 16-002 . . . BPR Form 16-002 is entitled Permitholder Application for Annual License to Operate a Cardroom. Question 10 of this form provides, "If this is your initial cardroom operator license application, enclose a copy of the certified ordinance as filed with the Secretary of State." Respondent contends that its authority to promulgate this rule is derived from the provisions of Section 849.086(16), Florida Statutes, which provides: County Commission Approval -- The Division of Pari-Mutuel Wagering shall not issue any license under this section except upon proof in such form as the Division may prescribe that a majority of the county commissioners in the county where the applicant for such license desires to conduct cardroom gaming has voted to approve such activity within the county. Respondent acknowledges that Section 849.086(16), Florida Statutes, does not expressly require the adoption of an ordinance by a county commission. Respondent's position is that the phrase "except upon proof in such form as the Division may prescribe" provides the unlimited power or authority to require the local government approval to be in a form Respondent may desire, here the adoption of an ordinance. This is as opposed to the statutory language which requires the applicant to report the means of local approval in a manner (form) acceptable to Respondent. In the analogous statutes governing municipalities, the factual distinction between a resolution and an ordinance is set forth in Section 166.041(1)(a) and (b), Florida Statutes: 'Ordinance' means an official legislative action of a governing body, which action is a regulation of a general and permanent nature and enforceable as a local law. * * * 'Resolution' means an expression of a governing body concerning matters of administration, an expression of a temporary character, or a provision for the disposition of a particular item of the administrative business of the governing body. Section 849.086(16), Florida Statutes, requires only that a majority of the county commissioners in the county where the applicant proposes to conduct cardroom activity vote to approve that activity within the county. Neither Section 849.086(16), Florida Statutes, nor any other provision of the cardroom act authorize a county commission to exercise any regulatory jurisdiction or control enforceable as a local law over the operation of cardrooms. This authority instead is vested in Respondent. Consequently, as a matter of law, Respondent's authority to designate the form which approval may take is not a grant of authority to dictate the means of passage of substantive legislation by a county commission and the proposed rule's attempt to do so through the requirement of ordinance passage exceeds Respondent's authority. Section 125.01(1)(t), Florida Statutes, provides: The legislative and governing body of a county shall have the power to carry on county government. To the extent not inconsistent with general or special law, this power includes, but is not restricted to, the power to: * * * (t) Adopt ordinances and resolutions necessary for the exercise of its powers and prescribe fines and penalties for the violation of ordinances in accordance with law. The adoption of a resolution approving cardrooms by a county commission is not, as a matter of law, inconsistent with the provisions of Section 849.086(16), Florida Statutes. Dade County adopted a resolution, by unanimous vote of all the county commissioners, approving the conduct of cardrooms and all activities authorized by Section 849.086, Florida Statutes, within the County. A certified copy of this resolution was received in evidence at the final hearing. Respondent's representative acknowledged that there is no better proof of the adoption of such a resolution then a certified copy of the resolution. There is, as a matter of law, no element of proof of the approval required by Section 849.086(16), Florida Statutes, that is not reflected in the Dade County resolution approving cardrooms. Proposed rule 61D-11.007(1), (2) and that portion of (8) and of BPR Form 16-002 which seek to impose the ordinance requirement are in excess of Respondent's statutory authority and are arbitrary and capricious. Cardroom Business Occupational License Proposed rule 61D-11.008(2) provides: A corporation, general or limited partnership, sole proprietorship, business trust, joint venture, or unincorporated association, or other business entity may not be issued or hold a cardroom business occupational license in this state if any one of the persons or entities specified in paragraph (a) has been determined by the Division not to be of good moral character, to have filed a false report to any govern- ment agency, pari-mutuel wagering or gaming commission or authority, or has been convicted of any offense specified in paragraph (b). 1. The cardroom business occupational license; An employee of the licensee; The sole proprietor operating under the license; A corporate officer or director of the licensee; A general partner of the licensee; A trustee of the licensee; A member of an unincorporated association of the licensee; A joint venturer of the licensee; The owner of more than 5 percent of any equity interest in the licensee, whether as a common shareholder, general or limited partner, voting trustee, or trust beneficiary; or An owner of any interest in the licensee, including any immediate family member of the owner, or holder of any debt, mortgage, contract, or concession from the licensee, who by virtue thereof is able to control the business of the licensee. 1. A felony or misdemeanor involving forgery, larceny, extortion, or conspiracy to defraud, in this state or any other state or under the laws of the United States. 2. A felony or misdemeanor set forth in s. 550.105, Florida Statutes. Proposed rule 61D-11.008(2) is, as Respondent's Director has acknowledged, an almost verbatim copy of Section 550.1815(1), Florida Statutes, which authorizes Respondent to determine whether applicants for a pari-mutuel wagering permit are of good moral character. Pursuant to Section 849.0866(5), Florida Statutes, only the holder of such a pari-mutuel wagering permit may be licensed to operate a cardroom. It is found, as a mixed question of law and fact, that Respondent is authorized to seek good moral character information as part of the application process. Specifically, Section 849.086(6)(f), Florida Statutes, incorporates the provisions of Section 550.105(9), Florida Statutes, as follows: (f) The division shall promulgate rules regarding cardroom occupational licenses. The provisions specified in s. 550.105(3),(4),(5),(6),(7) and (9) relating to licensure shall beapplicable to cardroom occupational licenses. Section 550.105(9), Florida Statutes, provides that Respondent may seek ". . . any information [Respondent] determines is necessary to establish the identity of the applicant or to establish that the applicant is of good moral character." Proposed rule 61D-11.008(2) is not in excess of Respondent's statutory authority, does not vest unbridled discretion in Respondent and is not arbitrary and capricious. Similarly, it is found as a matter of law and fact that proposed rule 61D-11.008(5) which requires an FDLE fingerprint processing and criminal records check fee "for each person or entity as specified in paragraph (2)(a)" of the rule is supported by Section 849.086(6)(f), Florida Statutes, which incorporates the provisions of Section 550.105(9), Florida Statutes, and is not in excess of the Division's statutory authority, does not vest unbridled discretion in Respondent and is not arbitrary and capricious. Proposed rule 61D-11.008(7) requires that: An applicant for an annual cardroom business occupational license shall complete a card- room business occupational license application, BPR Form 16-004, and submit the $250.00 fee for an annual cardroom business occupational license. Proposed rule 61D-11.008(7) is supported by provisions of Section 849.086(4), and (6), Florida Statutes, which incorporates the provisions of Section 550.105(9), Florida Statutes, and is not in excess of the Division's statutory authority, does not vest unbridled discretion in Respondent and is not arbitrary and capricious. Cardroom Employee Occupational License Proposed rule 61D-11.009(2) provides: All applicants for a . . . cardroom employee occupational license, shall complete a card- room employee occupational application BPR Form 16-005. . . BPR Form 16-005 consists of two forms, the Cardroom Employee Occupational License Application and the Request for Release of Information and Authorization to Release information forms. BPR Form 16-005, the Cardroom Employee Occupational License Application in question 14 requires that the applicant provide a complete listing of all addresses where the applicant has resided during the last five years under penalty that the application may be denied or the license revoked based upon any misstatements or omissions in the application. As previously noted, Section 550.105(9), Florida Statutes, adopted by Section 849.086(6)(f), Florida Statutes, authorizes Respondent to require an applicant to provide Respondent with any information deemed necessary by Respondent "to establish the identity of the applicant or to establish that the applicant is of good moral character." Despite Petitioners' concerns that cardroom employee occupational license applicants are expected to be highly transient and that such individuals should not be required to execute the proposed rule's release of information form, proposed rule 61D-11.009(2) and the subject BPR Form 16-005 is supported by Respondent's authority in Section 550.105(9), Florida Statutes, as adopted by Section 849.086(6)(f), Florida Statutes, and is not in excess of statutory authority or arbitrary and capricious. Electronic Surveillance Proposed rule 61D-11.012(5) provides: Cardroom operators shall install electronic surveillance equipment to record all gaming activity. The surveillance equipment must provide a cover ratio of one camera per four tables and to record all activity in the cardroom bank and cage and count area. Surveillance cameras and monitors shall be able to record and observe in color or black and white. Cameras must have the capability to zoom in on specific card table(s) and record card table activity. Tapes shall be labeled in chrono- logical order by date and time. Tapes of surveillance records shall be maintained for a period of no less than 14 days. Tapes shall be kept for a longer period of time if requested by the Division or any law enforcement agency. As established by testimony of Terry Fortino, Petitioners' expert in poker cardroom management and operations, many cardrooms, similar to the low stakes games operations contemplated by the cardroom act, do not have cameras on the tables for the reasons that the poker players, dealers and floor managers police the game and the house's money is not at risk. Respondent has made no cost benefit analysis regarding electronic surveillance requirements of the proposed rule. Respondent's representative at the final hearing has never viewed or had demonstrated a surveillance tape that complies with the one camera per four table ratio. Under such an arrangement, people's backs will always be to the camera and at best there will only be limited coverage lacking in detail. While the cameras must have the capabilities to zoom in on a specific card table, the proposed rule is silent as to how such zoom capability would be activated. The pan and tilt feature that enables the camera to zoom in on a table is manually operated. Unless somebody is physically present to monitor a video screen and to operate the pan and tilt controls, the zoom feature is effectively meaningless. The proposed rule's requirement of surveillance by one camera for every four tables is stated to be for the the purpose of obtaining evidence should Respondent desire to take licensing action against a dealer or cardroom operator. Notably, no electronic surveillance has ever been required in the pari-mutuel industry yet Respondent has routinely taken licensing action absent video tapes. Pursuant to Section 849.086(4)(e), Florida Statutes, Respondent is empowered to take testimony, issue subpoenas and subpoenas duces tecum in connection with any matter within its jurisdiction. Section 849.086(4)(f), Florida Statutes, specifically authorizes Respondent to: Monitor and ensure the proper collection of taxes and fees imposed by this section. Permitholder internal controls are mandated to ensure no compromise of state funds. To that end, a roaming division auditor will monitor and verify the cash flow and accounting of cardroom revenue for any given operating day. Section 849.086, Florida Statutes, contains no requirement that electronic surveillance, or any other form of ongoing monitoring of the activities of cardroom players, be provided by a cardroom operator. Daniel Riley, Petitioners' expert in electronic surveillance equipment in the gaming industry, while noting that less expensive fixed camera electronic surveillance of the bank, count area and cages in cardrooms could prove beneficial, projected the cost of providing only the electronic surveillance equipment required by Respondent's proposed rule at $15,320 for four tables and $27,820 for 20 tables. Steven Hlas, Petitioner's expert in pari-mutuel facility management and operation, testified that the cost of providing the proposed rule's required surveillance equipment together with the necessary construction costs, electrical and cable installations and personnel approximated $3,200 per cardroom table seating eight players and that Petitioner Derby Lane's expected cost with 25 cardroom tables was approximately $80,000. The provisions of proposed rule 61D-11.012(5) exceed Respondent's statutory authority, are arbitrary and capricious and impose regulatory costs on the regulated entities which can be reduced or eliminated by the adoption of less costly alternatives that substantially accomplish the statutory objectives, i.e. Respondent's implementation of its statutorily prescribed auditing function by "a roaming division auditor" to "monitor and verify the cash flow" of cardroom revenue. Admissions and Player Count Proposed rule 61D-11.017(4) reads as follows: Each cardroom operator shall file with the Division admission information on BPR form 16-007. Any cardroom operator that wishes to charge admission fees shall notify the Division in writing at least 2 working days prior to the effective date of such change via facsimile. Proposed rule 61D-11.018(2) reads as follows: Every licensed cardroom operator shall file BPR Forms . . . 16-009. . . with the Division by the fifth day of each calendar month for the preceding calendar month's cardroom activity. Taxes are collected with regard to cardroom wagering in two ways. Ten percent of the cardroom operation's monthly gross income, and fifteen percent (or 10 cents, whichever is greater) of the admission charge for entrance to the cardroom, if any. Section 849.086(13)(a) and (b), Florida Statutes. Respondent is required to monitor and ensure the proper collection of taxes and fees. Section 849.086(4)(f), Florida Statutes. Respondent is also called upon by the legislature to generate tax revenue projections for the Revenue Estimating Conference and to supply information to public officials, the industry and the general public regarding the pari-mutuel industry. Further, Respondent will be developing a statistical model to permit it to determine if the correct amount of taxes are being paid to the State, as well as developing essential tax revenue projections. Under the proposed rules, Respondent requires cardroom operators to report statistics regarding the number of persons admitted to the cardroom at each facility, and the number of persons participating in the cardroom games at each facility. Reporting of the number of persons admitted to the cardroom facility is required, regardless of whether a cardroom operator is charging separate admissions fees for the cardroom portion of the pari-mutuel facility, in order to verify and corroborate the cardroom operator's figures regarding the number of people actually gambling. Unlike pari-mutuel racing wagering which operates with a "Totalizator" tracking every individual wager, there is no method of recording individual wagers in the cardroom. Proposed rule 61D-11.017(4) and its requirement of a filing of BPR Form 16-007 is not in excess of Respondent's statutory authority, is not arbitrary and capricious and does not appear to impose excessive regulatory costs on the regulated entity. Proposed rule 61D-11.018(2) requires a cardroom operator to file BPR Form 16-009. This form in turn requires the cardroom operator to report not just the collection of fees or rakes but also the actual number of players to have played at each table during the period of time in which the fees or rakes were collected. Requirements of proposed rule 61D-11.018(2) and BPR Form 16-009 are not in excess of Respondent's statutory authority, are not arbitrary and capricious and do not appear to impose regulatory costs on the regulated entity which could be eliminated by less costly alternatives that substantially accomplish the statutory objective. Stipulated Facts Petitioners have standing to challenge the proposed rules at issue in this proceeding.
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 in this case is whether the Petitioner should revoke or suspend the Respondent's pari-mutuel occupational license for allegedly gambling out of his teller box in violation of F.A.C. Rules 61D-1.031(6) and 61D-1.002(18).
Findings Of Fact On or about July 6, 1994, the Respondent, Edward J. Tomczak, applied for a pari-mutuel occupational license as a teller at Tampa Jai Alai. According to the evidence, a one-year Unrestricted "M2" General license, number 0208239-1084, was issued to the Respondent, and the license is scheduled to expire on June 30, 1995. In the course of working as a teller at Tampa Jai Alai on the evening of August 29, 1994, the Respondent issued himself at least $1,427 of tickets for which he made no payment. In effect, he "borrowed" and used the fronton's money, against fronton policy, to gamble on his own account. As a result of his gambling, the Respondent was $1,427 "short" at the end of the evening. After closing out for the evening, the Respondent reported the $1,427 "short" to his supervisor. The Respondent explained that he was trying to win enough money to pay the claim of a woman whose winning December, 1992, Twin Trifecta ticket was cashed by the Respondent on August 11, 1993, after allegedly being found in the ladies room at Tampa Jai Alai by the Respondent's girlfriend. Notwithstanding the Respondent's attempt to explain his conduct of the previous evening, it was clearly understood between him and his supervisor that the Respondent's conduct on August 29, 1994, was a firing offense and that the Respondent no longer would be permitted to work as a teller at Tampa Jai Alai. (It was not the first time the Respondent reported a substantial "short" that summer. A previous "short" was in the neighborhood of $600-$700.) The next day, the Respondent cashed out his retirement account, repaid Tampa Jai Alai the $1,427 owed, and left. Whether he quit or was fired is unimportant to the issues in this case. A small "short" by a teller is not a firing offense at Tampa Jai Alai. There are many ways in which honest errors in the course of an evening can result in minor (less than $100) "shorts." Tampa Jai Alai's policy is that tellers must repay "shorts" and that "shorts" over $100 must be repaid before the teller can work again at the fronton. But "shorts" of the magnitude of $600-$700, much less $1,427, are considered highly unusual and are cause for concern that they are not the result of honest mistakes but rather of prohibited gambling "out of the box," as the Respondent was doing.
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: (1) imposing a $500 fine on the Respondent, Edward J. Tomczak; (2) revoking his license; and (3) declaring him ineligible for relicensure for a period of one year, with relicensure conditioned upon certification by a Florida licensed mental health practitioner that he has been evaluated for possible gambling addiction and either has been found not to be addicted or is being treated for such an addiction. RECOMMENDED this 22nd day of June, 1995, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of June, 1995. COPIES FURNISHED: Joseph M. Helton, Jr. Esquire Department of Business and Professional Regulation 1940 N. Monroe Street Tallahassee, Florida 32399-1007 Edward J. Tomczak 6401 S. Westshore Blvd., Apt. 716 Tampa, Florida 33616 Royal H. Logan Acting Director Department of Business and Professional Regulation Division of Pari-Mutuel Wagering 1940 North Monroe Street Tallahassee, Florida 32399-0792 Lynda Goodgame General Counsel Department of Business and Professional Regulation Division of Pari-Mutuel Wagering 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether Respondent violated Florida Administrative Code Rule 61D-11.005(5)(b) and therefore also Section 849.086(14)(a), Florida Statutes, as alleged in the instant Administrative Complaint, and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: At all times material to the instant case, Respondent held a Department-issued cardroom employee occupational license that expired June 30, 2007. After his license expired, Respondent applied for a new cardroom employee occupational license. By letter dated October 22, 2007, the Department advised Respondent that his application had been denied based upon the same alleged wrongdoing with which he had been charged in the instant case. The afternoon of November 15, 2006, Respondent was working as a dealer in the cardroom at the Mardi Gras Racetrack and Gaming Center (Mardi Gras) in Hallandale, Florida. At approximately 3:00 p.m. on that date, Respondent was manning Table #7, one of the "20 regular[2] poker tables"3 in the Mardi Gras cardroom.4 On the table directly in front of Respondent was an "imprest tray" (also known as the "bank").5 To the right of the "imprest tray" was a slide-activated "drop box" used to collect and temporarily store the rake6 (that is, the house's take) for each hand.7 To Respondent's left was a "tip box," which had a "drop slot" through which only one chip at time could be dropped.8 Positioned above the table was a fixed, surveillance camera, which continuously captured and recorded the activities at the table.9 The images caught by the camera could be viewed in real-time on the monitors in the cardroom's surveillance room.10 At 3:06 p.m. the hand being played at Table #7 had just ended. After giving the winner his winnings and gathering the "mucked" (that is, discarded) cards on the table, Respondent, with his right hand, took the five one-dollar chips (representing the "rake") that were on the front "ledge" of the "drop box" and put them on the table in front of the "imprest tray." He then, again with his right hand, took a five-dollar chip from the "imprest tray" and placed it on the front "ledge" of the "drop box" to replace the five one-dollar chips that he had just removed (Removed Chips).11 As Respondent was getting the five-dollar chip from the "imprest tray," the winner of the hand tossed on the table a one-dollar chip as a tip for Respondent (Tip Chip), and it rolled to a stop right next to the Removed Chips. Using his right hand, Respondent moved the Tip Chip away from the Removed Chips. He then picked up the Removed Chips. As he was picking up the Removed Chips with his right hand, Respondent moved his left hand (which had been palm-down on the "mucked" cards he had gathered) to the "imprest tray," where it remained for approximately a second,12 before he placed it, in a semi-clenched position, on the table to the left of the "mucked" cards. As he was moving his left hand away from the "imprest tray," he did not hold it (the hand) palm-up to the camera to show that it was empty. In failing to do so, he violated "one of the rules at Mardi Gras" that dealers are expected to follow. As he was repositioning his left hand, Respondent took the Removed Chips in his right hand and placed them in the "imprest tray." He then, with his now-empty right hand, pulled the "drop box" slide. On his second try, the five-dollar chip on the box's "ledge"(representing the "rake") fell into the box. Respondent next turned his attention to the Tip Chip that was on the table. He picked it up with his right hand, transferred it to his left hand, and then dropped it in the "tip box." Christopher Fisher, the Mardi Gras' dayshift surveillance supervisor, was in the cardroom's surveillance room observing Respondent at the time.13 It appeared to Mr. Fisher that Respondent was depositing two chips in the "tip box."14 Mr. Fisher thereupon reviewed the video recording of the hand that had just concluded to "find out where [Respondent had] got[ten] that second chip from." When he "played it the third time," Mr. Fisher "came to the conclusion that [Respondent] had put his left hand into the bank and took the chip from there." Mr. Fisher immediately contacted his supervisor, Christopher Hock, Mardi Gras' surveillance director. After reviewing the video recording of the incident, Mr. Hock concurred with Mr. Fisher's conclusion that Respondent had taken a chip from the "imprest tray" and dropped it into the "tip box." Respondent was terminated from his dealer position at Mardi Gras for "theft," effective November 15, 2006.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department issue a Final Order dismissing the Administrative Complaint against Respondent. DONE AND ENTERED this 29th day of February, 2008, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 29th day of February, 2008.
The Issue Whether or not on or about May 11, 1979, on his licensed premises, Albert Parrish, while being directly in charge of these premises, did unlawfully permit persons to play games of dice and cards for money, in violation of Section 849.01, Florida Statutes, and Section 561.29, Florida Statutes. Whether or not on or about June 1, 1979, in his licensed premises, the Petitioner, Albert Parrish, did unlawfully maintain a house, booth, tent, shelter or other place, to wit: The Red Honey, 835 East Brownlee Street, Starke, Bradford County, Florida, for the purpose of gaming or gambling, in violation of Section 849.01, Florida Statutes, and Section 561.29, Florida Statutes.
Findings Of Fact This cause comes on for consideration based upon a Notice to Show Cause (Administrative Complaint) filed by the State of Florida, Division of Alcoholic Beverages and Tobacco, against Albert Parrish who trades as the Red Honey in a licensed premises located at 835 East Brownlee Street, Starke, Bradford County, Florida. The Respondent, Albert Parrish, is the holder of license No. 14-69, Series 2-COP, which allows the Respondent to sell beer and wine at the aforementioned premises. The State of Florida, Division of Alcoholic Beverages and Tobacco, is an agency of the State of Florida charged with the duty to regulate those persons and other entities who hold beverage licenses within this state and it is in keeping with that charge that the Notice to Show Cause (Administrative Complaint) has been brought against the Petitioner, Albert Parrish, for the offenses as set out in the Issues statement of this Recommended Order. The Respondent has contested those allegations and the case has been considered in accordance with Subsection 120.57(1), Florida Statutes. On May 11, 1979, Beverage Officer Phyllis Williams, in the company of Columbia County, Florida, Sheriff's Officer Oliver Lake went to the licensed premises in Starke, Florida. After entering the licensed premises, they stayed for a period of one to one and one-half hours, during which time the Respondent, Albert Parrish, was present. In this sequence of time Albert Parrish was located at a pool table found in the licensed premises and a number of other persons were at the pool table rolling dice, which is a game of chance. Money was being placed on the table by the players and Parrish was picking up money from the table and placing it in a box which was in his custody and control. Parrish was in charge of the dice game to the extent of being an active participant and receiving financial benefit and to the extent of allowing other persons to play the dice game. While Officers Williams and Lake were in the licensed premises on May 11, 1979, they also observed a card game being played and this went on for some forty-five minutes. The game being played was a game known as "Tunk" which on this occasion was being played with wagered money pieced on the table. The Respondent, Parrish, was not directly participating in the card game, in that he was running the dice game at a separate location within the licensed premises; however, the person who appeared to be in charge of the "Tunk" card game was seen to pass an item to Parrish during the course of the time in which the officers were in the licensed premises. Therefore, although Parrish did not actively participate in the card game, he did unlawfully permit other persons to participate in the card game in his licensed premises. On June 1, 1979, Beverage Officer James Bates went back to the licensed premises in Starke, Florida. On this occasion, Bates observed a number of persons around a pool table and Parrish standing next to the pool table and a dice game being played. Two dice were being thrown and money was being wagered. Parrish was in charge of the dice game to the extent that wagers of money would be placed and Parrish would put a playing card on top of the money and then when a winner had prevailed, Parrish would pay off that winner. Bates observed the fact of this activity for approximately two hours and Parrish remained at the pool table for the entire period of time. Bates also observed an individual who was acting as a lookout and when police cars would pass by, the lockout would give a warning and all of those persons in the licensed premises would step away from the pool table until the police car had left the area of the licensed premises, at which time the game would be resumed.
Recommendation It is recommended that the Respondent, Albert Parrish, have his beverage license No. 14-69, Series 2-COP, suspended for a period of ninety (90) days. DONE AND ENTERED this 18th day of December, 1979, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Daniel C. Brown, Esquire Staff Attorney Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Albert Parrish t/a Red Honey 835 East Brownlee Street Starke, Florida ================================================================= AGENCY FINAL ORDER =================================================================
The Issue Whether the Respondent's Proposed Rule 61D-11.012(5)(d) constitutes an invalid exercise of delegated legislative authority pursuant to Section 120.52(8)(c) and (e), Florida Statutes, as set forth in the Petition Challenging the Validity of Proposed Rule 61D-11.012(5)(d) filed March 14, 2008.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the Agreed Facts included in the parties' Pre- Hearing Stipulation, and on the entire record of this proceeding, the following findings of fact are made: The Parties The Division is authorized to administer cardrooms; to regulate the operation of cardrooms; and to adopt rules governing the operation of cardrooms. See § 849.086(4), Fla. Stat. (2007).1 Hartman and Tyner owns a pari-mutuel facility doing business as Mardi Gras Racetrack and Gaming Center, located at 831 North Federal Highway, Hallandale Beach, Florida 33009. Hartman and Tyner holds two pari-mutuel permits to conduct greyhound racing at this pari-mutuel facility, the BET Miami permit and the Mardi Gras permit. Pursuant to these permits, the Division issued Hartman and Tyner two current licenses to conduct pari-mutuel wagering at this pari-mutuel facility: License #141, which was issued under the BET Miami permit; and License #144, which was issued under the Mardi Gras permit. Pursuant to Section 849.086(5), Florida Statutes, Hartman and Tyner applied for, and the Division issued on June 28, 2007, two cardroom licenses allowing the operation of a cardroom with a maximum of 40 tables during the 2007/2008 season at its pari-mutuel facility. One cardroom license was issued in conjunction with the BET Miami permit, and the other cardroom license was issued in conjunction with the Mardi Gras permit. Hartman and Tyner computes the monthly gross receipts separately for the BET cardroom license and for the Mardi Gras cardroom license in calculating the 10 percent monthly tax imposed by Section 849.086(13)(a), Florida Statutes, and for purposes of the four percent monthly greyhound purse supplement imposed by Section 849.086(13)(b), Florida Statutes. Gulfstream Park holds two pari-mutuel permits to conduct thoroughbred and quarter horse racing at a pari-mutuel facility located in Broward County, Florida. Pursuant to Section 849.086(5), Florida Statutes, Gulfstream Park applied for, and the Division issued, a cardroom license in conjunction with its permit to conduct thoroughbred horse racing. Both Hartman and Tyner and Gulfstream Park are subject to regulation by Proposed Rule 61D-11.012(5)(d). The challenged proposed rule, relevant statutes, and legislative history. Section 849.086, Florida Statutes, which was first enacted in 1996, authorizes a person holding a pari-mutuel wagering permit to obtain a license to operate a cardroom at a pari-mutuel facility and sets forth the conditions under which such cardrooms are to operate.2 The legislative intent in enacting Section 849.086, Florida Statutes, is set forth as follows: LEGISLATIVE INTENT.--It is the intent of the Legislature to provide additional entertainment choices for the residents of and visitors to the state, promote tourism in the state, and provide additional state revenues through the authorization of the playing of certain games in the state at facilities known as cardrooms which are to be located at licensed pari-mutuel facilities. To ensure the public confidence in the integrity of authorized cardroom operations, this act is designed to strictly regulate the facilities, persons, and procedures related to cardroom operations. Furthermore, the Legislature finds that authorized games as herein defined are considered to be pari-mutuel style games and not casino gaming because the participants play against each other instead of against the house. Section 849.086(2), Florida Statutes, contains the following definitions which are pertinent to this proceeding: (c) "Cardroom" means a facility where authorized games are played for money or anything of value and to which the public is invited to participate in such games and charged a fee for participation by the operator of such facility. Authorized games and cardrooms do not constitute casino gaming operations. * * * (f) "Cardroom operator" means a licensed pari-mutuel permitholder which holds a valid permit and license issued by the division pursuant to chapter 550 and which also holds a valid cardroom license issued by the division pursuant to this section which authorizes such person to operate a cardroom and to conduct authorized games in such cardroom. Proposed Rule 61D-11.012 sets forth the duties of licensed cardroom operators at pari-mutuel facilities and is one of a number of proposed rules dealing with cardrooms at pari- mutuel facilities included in the Notice of Proposed Rule published by the Division on March 14, 2008, in Volume 34, Number 11, of the Florida Administrative Weekly. These rules were intended to implement changes to Section 849.086, Florida Statutes, enacted during the 2007 legislative session and effective July 1, 2007. Proposed Rule 61D-11.012(5), which contains the subsection that is the subject of this challenge, provides as follows:3 The cardroom operator must display the hours of operation in a conspicuous location in the cardroom subject to the following terms and conditions: Days and hours of cardroom operation shall be those set forth in the application or renewal of the cardroom operator. Changes to days and hours of cardroom operation shall be submitted to the division at least seven days prior to proposed implementation; Pursuant to Section 849.086(7)(b), F.S., a cardroom operator may operate a licensed facility any cumulative 12-hour period within the day; Activities such as the buying or cashing out of chips or tokens, seating customers, or completing tournament buy- insurance or cash-outs may be done one hour prior to or one hour after the cumulative 12-hour designated hours of operation; The playing of authorized games shall not occur for more than 12 hours within a day, regardless of the number of pari-mutuel permitholders operating at a pari-mutuel facility. Subsection(5)(d) was added to Proposed Rule 61D-11.012(5) at the end of February 2008, to "fix the Mardi Gras 24 hour cardroom issue."4 In the Notice of Proposed Rule for Proposed Rule 61D- 11.012, the Division identified its rulemaking authority as Section 550.0251(12) Florida Statutes, and Section 849.086(4) and (11), Florida Statutes. Sections 550.0251(12) and 849.086(4), Florida Statutes, both give the Division the authority to adopt rules governing, among other things, the operation of cardrooms at pari-mutuel facilities.5 These grants of rulemaking authority are sufficient to authorize the Division to promulgate Proposed Rule 61D-11.012. The Division stated in the Notice of Proposed Rule that Section 849.086, Florida Statutes, is the law implemented by Proposed Rule 61D-11.012. The only section of Proposed Rule 61D-11.012 challenged by Hartman and Tyner is Section (5)(d), which reflects the Division's interpretation of Section 849.086(7)(b), Florida Statutes. Section 849.086(7)(b), Florida Statutes, provides: "Any horserace, greyhound race, or jai alai permitholder licensed under this section may operate a cardroom at the pari- mutuel facility on any day for a cumulative amount of 12 hours if the permitholder meets the requirements under paragraph (5)(b)." Prior to the 2007 amendment, Section 849.086(7)(b), Florida Statutes (2006), provided in pertinent part: A cardroom may be operated at the facility only when the facility is authorized to accept wagers on pari-mutuel events during its authorized meet. A cardroom may operate between the hours of 12 noon and 12 midnight on any day a pari-mutuel event is conducted live as a part of its authorized meet. . . . Application to operate a cardroom under this paragraph must be made to the division as part of the annual license application. This version of the statute was enacted in 2003 and amended the original Section 849.086(7)(b), Florida Statutes (1997), which provided: A cardroom may be operated at the facility only when the facility is authorized to accept wagers on pari-mutuel events during its authorized meet. A cardroom may begin operations within 2 hours prior to the post time of the first pari-mutuel event conducted live at the pari-mutuel facility on which wagers are accepted and must cease operations within 2 hours after the conclusion of the last pari-mutuel event conducted live at the pari-mutuel facility on which wagers are accepted. Section 849.086(7)(b), Florida Statutes, requires that a pari-mutuel wagering permitholder must meet "the requirements under paragraph (5)(b)." Section 849.086(5), Florida Statutes, governs the issuance of cardroom licenses and provides that cardrooms may be operated only by persons holding valid cardroom licenses and that these licenses may be issued only to licensed pari-mutuel wagering permitholders. Section 849.086(5)(b), Florida Statutes,6 provides in pertinent part: After the initial cardroom license is granted, the application for the annual license renewal shall be made in conjunction with the applicant's annual application for its pari-mutuel license. If a permitholder has operated a cardroom during any of the 3 previous fiscal years and fails to include a renewal request for the operation of the cardroom in its annual application for license renewal, the permitholder may amend its annual application to include operation of the cardroom. In order for a cardroom license to be renewed the applicant must have requested, as part of its pari-mutuel annual license application, to conduct at least 90 percent of the total number of live performances conducted by such permitholder during either the state fiscal year in which its initial cardroom license was issued or the state fiscal year immediately prior thereto. If the application is for a harness permitholder cardroom, the applicant must have requested authorization to conduct a minimum of 140 live performances during the state fiscal year immediately prior thereto. If more than one permitholder is operating at a facility, each permitholder must have applied for a license to conduct a full schedule of live racing. Section 849.086(5)(b), Florida Statutes, was not changed by the 2007 amendments to Section 849.086, Florida Statutes, but, pertinent to this proceeding, the final sentence of the subsection was added by amendment in 2003. The effect of this amendment was described in the 2003 House of Representatives and Senate Staff Analyses as follows: "If more than one permitholder operates at a shared cardroom facility, each permitholder must apply for a license to conduct a full schedule of live racing." When introducing the bill that contained the 2007 amendment to Section 849.086(7)(b), Florida Statutes, to the Florida House of Representatives Jobs & Entrepreneurship Council, Representative Holloway, the sponsor of the House of Representatives bill, explained that the "cardroom bill . . . allows cardrooms to operate during live events, and the hours have changed from 12 hours a day . . . from a, from 12 Noon to 12 Midnight to 12 hours a day cumulative." In response to a question, Representative Holloway stated that the bill did not expand gambling in Florida, "[i]t is just re-arranging current provisions." In a similar vein, Senator Fasano, when he submitted a floor amendment to the Senate bill containing an amendment to Section 849.086(7)(b), Florida Statutes, stated that his amendment "limits the hours of operation of a cardroom to a cumulative amount equal to 12 hours in any day if the permit holder has met the requirements for licensure to operate a cardroom." Based on this legislative history and on the various iterations of the statute, the Division enacted Proposed Rule 61D-11.012(5)(d) to reflect its interpretation of the 2007 amendment to Section 849.086(7)(b), Florida Statutes, as limiting the operation of a cardroom at a pari-mutuel facility to a "cumulative amount of 12 hours." In the Division's view, the Legislature did not intend for the 2007 amendment to expand the number of hours a cardroom could operate but was intended only to allow a cardroom operator greater flexibility in setting the hours of operation. In promulgating Proposed Rule 61D- 11.012(5)(d), the Division made explicit its rejection of an interpretation of the 2007 amendment that would allow two pari- mutuel wagering permitholders licensed to operate a cardroom and sharing a pari-mutuel facility both to operate the cardroom at the pari-mutuel facility for a "cumulative amount of 12 hours" a day. The Division rejects such an interpretation because it could result in the operation of a cardroom at a pari-mutuel facility for 24 hours per day, exceeding what the Division considers the limitation on cardroom operation at a pari-mutuel facility to "a cumulative amount of 12 hours." § 849.086(7)(b), Fla. Stat.
