The Issue The issue in this case is whether proposed Florida Administrative Code Rule 61D-11.026 is valid.
Findings Of Fact Rule 61D-11.002(2)(a) and the Incipient Policy During the 1996 Session of the Florida Legislature, pari-mutuel permit holders were authorized, for the first time, to operate cardrooms at their facilities on days when live racing is being conducted, effective January 1, 1997. Only certain card games were authorized, and games have to be approved by the Respondent, the Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering (the Division). Chapter 96-364, Laws of Florida (1996). When the Division first began implementing the new cardroom statute, it anticipated that it would be receiving requests for card games as they appeared in Hoyle's Modern Encyclopedia of Card Games, by Walter B. Gibson, published by Doubleday and Company, Inc., April 1974 1st Edition (Hoyle’s). Hoyle’s includes many games besides poker; in addition to a special section on poker, it includes special sections on pinochle and solitaire; the evidence is not clear as to the other kinds of card games in Hoyle’s. Initially, the Division promulgated Florida Administrative Code Rule 61D-11.002(2)(a) which provides: (2)(a) All card games in Hoyle's Modern Encyclopedia of Card Games, by Walter B. Gibson, published by Doubleday and Company, Inc., April 1974 1st Edition hereinafter (Hoyle's) incorporated herein by reference, that are authorized by and played in a manner consistent with Section 849.085(2)(a) and Section 849.086, Florida Statutes, and the rules promulgated thereunder, shall be approved by the division. All other card games shall be approved by the division if the type of card games and the rules of the card games, as specified in BPR Form 16-001, meet the requirements of Section 849.085(2)(a) and Section 849.086, Florida Statutes, and the rules promulgated thereunder. The Division soon noticed that it was receiving requests for the approval of games alleged to be “poker,” but which deviated from the standard features of poker. In November 1996, the Division began to develop a policy for the review of such games and began to require card games to use standard poker card and hand ranking and afford players the opportunity to bluff after seeing their hands. Requests and Denials Prior to Proposed Rule On or about November 8, 1996, the Petitioner, the St. Petersburg Kennel Club, submitted a request for approval for Big Poker 21. The Division denied approval on December 3, 1996. On or about December 19, 1996, the Petitioner submitted a request for approval for Sure 2 Win. The Division denied approval on January 2, 1997. On or about January 23, 1997, the Petitioner submitted a request for approval for Florida Twenty-One. The Division denied approval on February 14, 1997. All three games are played in a non-banking manner. (The house is not a player in games played in a non-banking manner, a requirement for approval.) The Division initially simply advised the Petitioner that its proposed games were not authorized. Subsequently, in discovery depositions in this case, the Division advised the Petitioner more specifically, as follows: approval of Big Poker 21 was denied because Big Poker 21 fails to adhere to standard poker-hand rankings and does not allow for the possibility of bluffing, calling or raising; approval of Florida Twenty-One was denied because Florida Twenty- One fails to adhere to standard poker-hand rankings; and approval of Sure 2 Win was denied because in the five-card portion of Sure 2 Win, the players have no opportunity to wager or bluff after viewing the cards and simply win or lose on the hand dealt. The Division has approved 35 out of 39 card games submitted by cardroom operators. The four denied include Sure 2 Win, Big Poker 21, Florida Twenty-One, and Pompano 22. Pompano 22 is very similar to Florida Twenty-One. The card games, Hollywood 2-3 Flash and Hollywood 4-3 Flash, were approved by the Division on January 10, 1997. The Petitioner contends that, under the Division’s incipient policy and proposed rule, these games should not have been approved because they “do not provide for bluffing.” However, both afford players the opportunity to check or bet after seeing their first cards (the first two in 2-3 Flash or the first four in 4-3 Flash). The card game, Three-Card Stud, also was approved by the Division on January 10, 1997. The Petitioner contends that, under the Division’s incipient policy and proposed rule, this game should not have been approved because it does not follow the standard poker hand rankings. However, the hand rankings are consistent with the standard poker-hand-ranking system, just adapted for a three-card hand. The Proposed Rule Notice of a rule workshop regarding the definition of poker was published in December 1996, and a workshop was held in January, 1997. The Division distributed a hand-out on poker at the January workshop, but the evidence is not clear as to the content of the hand-out. It appears to have been a list of seven issues for discussion, including: whether there have to be one or more betting intervals in a poker game; whether the players of poker have to be able to wager on the quality of his/her hand by either folding, calling, passing, or raising; and whether a poker game must use the standard poker hand rankings. On March 18, 1997, the Division proposed Florida Administrative Code Rule 61D-11.026: Poker is defined as a non-banking game played with cards, comprised of two or more players who play for wagers, and which shall contain the following elements: (1) conformity to the traditional, standardized poker hand ranking system where the value of the ranking is determined by the relative probablity of drawing a particular hand; (2) conformity to the traditional, standardized poker card ranking system (e.g., K>Q>J>10 etc.); and (3) the opportunity to bluff, through at least one betting round, after players have viewed their cards. Poker does not include any game whose object is to reach a certain accumulated number by adding up the face value of the cards. Specific Authority 849.085(2)(a), 849.086(2)(a),(4),(12), 550.0251(12) FS, Law Implemented 849.086 FS. History-New. Standard Poker Standard poker is a non-banking game played with cards or tiles that generally include the following features: at least part of the player’s hand is known only to the player and is solely under the player’s control; there are two or more players; there is a pot created by wagers which constitutes the prize for winning; there is a standard ranking of hands which is not arbitrary and which is based on the mathematical expectation or difficulty of achieving a particular combination of cards; there is a standard ranking of cards from lowest to highest; there is opportunity for each player to bet on the cards which comprise the player’s hand; and there are one or more betting rounds. The fundamental element that differentiates poker from all other forms of gambling is the bluff: the possibility that a player can win the game with a hand that ranks lower than another player’s. The game of poker is an American invention whose rules have been fairly standardized for almost a century. There is no mention of poker in Hoyle’s 1776 text. The rules of poker developed during the 19th century. The first reference to rules for a game resembling poker is in Hoyle’s 1857 text. Although draw and stud poker did not exist in 1857, the hand rankings were the same then as they are today, only without the straight or straight flush. The straight was introduced into the ranking system below the flush at the turn of this century. Draw poker and five-card stud developed during the Civil War, although straight poker was clearly the most important form of poker at that time. The ranking system that is in use today was firmly established by 1885. The standard poker-hand rankings of today, given in order from highest to lowest, are as follows: five of a kind (possible only when wild cards are used), straight flush (royal flush is highest), four of a kind, full house, flush, straight, three of a kind, two pair, pair, high card. The standard poker-card rankings of today, in order from highest to lowest, are as follows: A, K, Q, J, 10, 9, 8, 7, 6, 5, 4, 3, 2, with the ace sometimes low instead of high. Petitioner’s Expert On July 19, 1996, the Petitioner’s expert, Steven Fox, submitted to the Division a set of suggested revisions to the Division’s proposed cardroom rules. Fox stated that the games of poker in Hoyle’s are inappropriate for commercial cardroom use and that it was better for the State to develop its own generic standard of poker: “Attached are some of my own [generic standard of poker] on commercial poker games and a generic definition of poker for reference.” As applied to commercial poker games, the features of poker that Fox suggested the Division use as a guideline “to evaluate whether a game should be classified as poker” include: (a) usually played with cards; (b) cards are ranked from designated lowest or worst to highest or best; (c) there is a ranking system which assigns relative value to each player’s combination of cards, where the ranking system is not arbitrary and is based on the mathematical expectation for receiving each combination; (d) each player can participate in the action based upon cards solely under his control . . . and knowledge of other players’ habits or styles; (e) at least some of the cards under a player’s control are known only to him; (f) each player has the opportunity to bet on the cards which comprise his hand and there may be more than one betting round; and (g) players bet against the relative holdings of other players. In his July 1996 materials, Fox suggested that the Division consider the traditional poker ranking system of cards from lowest or worst to highest or best, as follows: 2, 3, 4, 5, 6, 7, 8, 9, 10, Jack, Queen, King, Ace. “The Ace shall be treated as a one in low poker and in low straight sequences (A, 2, 3, 4, 5). Otherwise it will be assumed to be valued higher than all the other cards in assuming standard 52 card deck.” This is the exact same card ranking system listed in Hoyle’s. In his July 1996 materials, Fox suggested that the Division consider the traditional poker-ranking system of hands in descending order of value as: five aces (includes the joker when available), straight flush, four of a kind, full house, flush, straight, three of a kind, two pair, one pair, no pair (high card). This is the same hand-ranking system listed in Hoyle’s. At final hearing in DOAH Case Nos. 97-0031, 97-0376, and 97-1667 on April 11, 1997, Fox testified that it is “extremely difficult to pin down what exactly is poker”; that poker hand rankings are arbitrary and established by agreement of the players, i.e., “whatever the players want”; and that, because of the $10 pot limitation, games in Florida lend themselves more to “home-style” or “showdown” games. When questioned on cross- examination about these apparent contradictions, Fox asserted that his definition as submitted to the Division in July 1996, was “something that I used in more of the casino versions of poker, and I use this as a suggestion so that people can understand a casino version of poker.” But, nowhere in Fox’s July 1996 materials, does he state, suggest, or infer that his definition of poker is a “casino version” of poker or that his definition would be inappropriate for use in Florida because of the $10 pot limitation. To the contrary, it was Fox’s desire that the Division incorporate his suggested definition of poker into its regulations. At the time he submitted his suggested definition of poker to the Division in July 1996, Fox was fully aware of the $10 pot limitation in Florida. Fox was paid by the Petitioner to provide expert testimony on its behalf at the hearing on April 11, 1997. Fox was not paid for his proposed revisions and definition of poker submitted to the Division in July 1996. Dealer’s Choice Games in Hoyle’s Included among the poker games described in Hoyle’s are many dealer’s choice poker games. According to Hoyle’s, these games “run the gamut from mere variants of standard games to those that are wild beyond belief.” Some of these games— including Jacks High, Lalapalooza, Low Poker, One Card Poker, Place Poker, Second Hand Low, Tens High, Two Card Poker, and Zebra Poker—vary from the standard poker-hand rankings. Others— including High Spade Split, Jacks High, Tens High, and Zebra Poker—vary from the standard poker-card rankings. Some—including Cold Hands, Cold Hands Poker with a Draw, Blind Poker, and Show Down Poker—do not afford players the opportunity to bluff after seeing their hands. There also are other homestyle, dealer’s choice “poker” games, not listed in Hoyle’s, which do not conform to the Division’s definition of poker. These include 727 and 333, in which the object is to obtain a certain numerical total by adding the point values of cards. The New Complete Hoyle Revised The New Complete Hoyle Revised was published in December 1991. Excerpts are included in the evidence in this proceeding. It appears that the excerpts begin on page 26 with a section called Variations of Poker. The excerpts appear to follow material on standard Poker which are not in evidence. The section called Variations of Poker begins with a subsection called Optional Laws, which in turn seems to composed of sections called Special Hands, Popular Wild Cards, Double-Ace Flushes, Stripped Deck, and Royalties. The next subsection, starting on page 28, is called Poker Variations. It states: There is an indeterminate number of games based on Poker, and many of these games have several different names. Most of them were originally devised, or are devised from time to time, to break the monotony of a regular Poker game (or, at least, what seems to the average player to be monotony.) The variations which have proved most popular over a period of time are described in the following pages. In most of these games, the standard poker hands as listed on page 6 have value in the showdown and determine the winner. When any of the standard poker hands are not counted, or when any of the optional hands (page 26) are counted, that fact is noted in the description of the variation. In some cases, each hand in the showdown consists of fewer than five cards; though a player be dealt as many as ten cards, he must select his best five for the showdown. The games described on pages 28 through 36 include some of the games included in the Dealer’s Choice section of Hoyle’s. At the same time, it also includes a “game” called Dealer’s Choice. Under Dealer’s Choice, the New Complete Hoyle Revised states in part: In the usual informal Poker game, the dealer may choose which form or variation of Poker will be played. Sometimes he is not limited to forms of Poker, but may select such games as Fan Tan, Red Dog, or any other game suitable to the number of players at the table. Also included are the games Red and Black and Up and Down the River (or Put and Take). In Red and Black: The rules follow Draw Poker except in the rank of the cards. Instead of determining the winner by poker hands, each player in the showdown counts the point value of his hand. All red cards count plus, and all black cards count minus; each ace counts 1 point, each face card 10 points, and each other card its index value. The hand with the highest plus total in the showdown wins the pot; or the game is played high-low, with the greatest plus hand dividing the pot with the greatest minus (or, if there is no minus hand, with the lowest plus). In Up and Down the River (or Put and Take): Dealer gives each player five cards, face up, one at a time. He then turns up five cards to the center, one at a time, as “put” cards. As each card is turned, each player having a card of the same rank in his hand must put in the pot as many chips as the rank of the cards, counting a king as 13, queen 12, jack 11, ace 1 and other cards their index numbers. If a player has two or more cards in his hand of the rank turned, he must put up individually for each. When the five “put” cards have been turned, the dealer turns up five “take” cards and this time each player takes from the pot the number of chips equivalent to the rank of the care for each card of similar rank in his hand. * * * This is played as a banking game, the dealer taking any excess remaining in the pot and supplying any deficiency; but there is no advantage to the dealer. Petitioner’s Proposed “Poker” Games The Petitioner’s proposed “poker” games called Big Poker 21 and Florida Twenty-One do not conform to the standard poker card ranking system. Face cards are all given exactly the same rank or value; each is worth 10 points, while aces are worth 1 or 11 points. The object of both Big Poker 21 and Florida Twenty-One is to total 21 points, or as close to 21 points as possible, by adding the point values of cards. Players accumulate cards by drawing cards face up until a certain point value is reached, whereupon they “stand.” Big Poker 21 and Florida Twenty-One both allow for an automatic win if the player’s first two cards total 21 points. An ace-king, ace-queen, ace-jack, and ace-10 each total 21 and are automatic winners. There are no automatic wins in poker. Big Poker 21 and Florida Twenty-One both restrict the player’s ability to draw cards. This restriction is based on the point total. A player who accumulates 20 points is not allowed to draw any more cards. The game of poker does not restrict a player’s ability to draw cards simply because the player has attained a particular hand. There is no possibility of bluffing in Big Poker 21 since players make their bets before they view their cards. Big Poker 21 and Florida Twenty-One are variations of the game of Black Jack, or “Twenty-One,” as it is often called. Black Jack developed in the 1850s and was often played in a non- banking manner. It is still sometimes played today in a non- banking manner. The Petitioner’s proposed “poker” game called Sure 2 Win includes a five-card hand, or “showdown” portion, which violates the fundamental rule of poker that players have to be able to make a bet after viewing their cards so that bluffing is possible. All participants must participate in the “showdown” portion. In the “showdown” portion of the game, the players wager before viewing their cards, which are then turned up to reveal the winning hand, with no further opportunity to bet. The winner of the showdown portion of Sure 2 Win wins strictly by chance since the player has no control over the deal of the cards, no opportunity to view the cards before making a bet, no opportunity to bluff, no opportunity to draw cards in order construct a higher ranked hand, and no control over the outcome of the showdown portion. The player who wins in the showdown portion of the game is not eligible to play the seven-card portion of the game. Other players can decide whether to bet on the seven-card portion of the game; however, that decision has absolutely no effect on the outcome of the five-card portion of the game.
Findings Of Fact Leroy Wise, Jr.'s Mother purchased lottery ticket number 1888-3620-9444 (hereinafter referred to as the "Ticket") on approximately July 6, 1989. The Ticket was a Fantasy 5 ticket with four correct numbers. The Ticket winnings amounted to $805.00. Mr. Wise took his Mother to the Department of the Lottery's offices in Tallahassee, Florida on July 10, 1989. Mr. Wise's Mother did not have proper identification required by the Department of the Lottery to cash in the Ticket. Therefore, she allowed Mr. Wise to present the ticket for collection because Mr. Wise had proper identification. On July 10, 1989, Mr. Wise completed a Florida Lottery Winner Claim Form (hereinafter referred to as the "Form") and submitted the Form and the Ticket to the Lottery. On the back of the Ticket Mr. Wise listed his name and address on the spaces provided for the person claiming the prize and signed the Ticket. Mr. Wise listed his name, Social Security Number, address and phone number on the Form. Mr. Wise signed the Form as the "Claimant." In a letter dated July 10, 1989, the DHRS notified the Lottery that Mr. Wise owed $4,690.00 in Title IV-D child support arrearages as of July 10, 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be issued providing for payment of the $805.00 prize attributable to the Ticket owed by Mr. Wise as child support arrearages as of the date of the Final Order to DHRS. DONE and ENTERED this 21st day of February, 1990, in Tallahassee, Florida. LARRY J. SARTIN 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 21st day of February, 1990. APPENDIX The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioners' Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 1-4 2 6. 3 Not supported by the weight of the evidence. The Petitioner's did not offer any evidence at the formal hearing concerning these proposed findings of fact. Mr. Wise's Proposed Findings of Fact Paragraph Number in Recommended Order Sentence in Letter of Acceptance or Reason for Rejection 1, 13-20 Not proposed findings of fact. 2-3 6. 4-6, 11-12 Not supported by the weight of the evidence. 7-10 Not relevant to this proceeding. Copies Furnished To: Jo Ann Levin Senior Attorney Office of Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Louisa E. Hargrett Senior Attorney Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301 Chriss Walker Senior Attorney Department of Health and Rehabilitative Services 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Leroy Wise, Jr. 1526-A Patrick Avenue Tallahassee, Florida 32310 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 William G. Reeves General Counsel Department of Banking and Finance The Capitol, Plaza Level Tallahassee, Florida 32399-0350
The Issue Whether Respondent, Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering (“Division”), relied on an unadopted rule when it renewed a license to operate slot machines to Intervenor Calder Race Course, Inc. (“Calder”) for the 2017-2018 fiscal year, and whether Petitioner, Florida Horsemen’s Benevolent and Protective Association, Inc. (“Petitioner” or “FHBPA”), has standing to bring the instant action.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, including the parties’ Joint Pre-hearing Stipulation, the following Findings of Fact are made: The FHBPA is a Florida not-for-profit corporation representing licensed horse trainers and horse owners in Florida. The FHBPA’s stated purpose is to advance and promote the sport of thoroughbred horse racing and the thoroughbred horse racing industry in the state of Florida, and to assist its members in all matters that affect their interests in the racing industry. The Division is the state agency responsible for implementing and enforcing Florida’s pari-mutuel laws, including the licensing and regulation of all pari-mutuel activities conducted in the state. The Division’s regulatory duties include the adoption of “reasonable rules for the control, supervision, and direction of all applicants, permittees, and licensees and for the holding, conducting, and operating of all racetracks, race meets, and races held in this state.” § 550.0251(3), Fla. Stat. The Division is also responsible for the administration and regulation of slot machine gaming in Florida. § 551.103, Fla. Stat. Calder is the holder of a thoroughbred horse racing pari-mutuel permit and a slot machine license in Miami-Dade County, Florida. Calder is one of eight Florida pari-mutuel facilities authorized to operate slot machines and has continuously held a slot machine license since 2009. Gambling is generally prohibited under Florida law. See chapter 849, Florida Statutes, establishing criminal penalties for many forms of gambling.1/ However, certain types of pari-mutuel activities, including wagering on horse racing, have been authorized. In recent years, the Legislature has expanded the gambling activities that may occur at the facilities of licensed pari-mutuel permit holders by authorizing the operation of slot machines at pari-mutuel facilities. Article X, section 23 of the Florida Constitution, adopted in 2004, allows the governing bodies of Miami-Dade and Broward Counties to hold a county-wide referendum “on whether to authorize slot machines within existing, licensed parimutuel facilities (thoroughbred and harness racing, greyhound racing, and jai-alai) that have conducted live racing or games in that county during each of the last two calendar years before the effective date of this amendment.” Article X, section 23 also requires the Legislature to adopt implementing legislation. Chapter 551, Florida Statutes, originally enacted in 2005, is the implementing legislation for Article X, section 23. Section 551.104(10)(a)1. requires slot machine licensees, who are also thoroughbred racing permit holders to enter into a “binding written agreement” with the FHBPA governing the payment of purses on live thoroughbred races conducted at the licensee’s pari-mutuel facility, and to file that agreement with the Division. The statute provides that the agreement may direct the payment of purses “from revenues generated by any wagering or gaming the applicant is authorized to conduct under Florida law.” Calder has filed with the Division a binding written agreement with the FHBPA governing the payment of purses on live thoroughbred races conducted at Calder’s pari-mutuel facility. The agreement provides for direct payment of purses from revenues generated from Calder’s pari-mutuel wagering activities and Calder’s slot machine gaming activities.2/ Calder operated its first live thoroughbred horse racing meet on May 6, 1971, at the current location of the pari- mutuel facility. The facility’s legal description is unchanged since Calder’s initial racing permit was issued in 1969. A race meet has been conducted at the Calder pari- mutuel facility every year from 1971 through 2017. Since at least 1992, Calder has been operating live pari-mutuel activities on the racetrack apron, in front of the grandstand. In July 2009, Calder filed for and obtained a slot machine license, pursuant to the provisions of Article X, Section 23, and sections 551.101 and 551.102(4). Section 550.105(1) provides that a slot machine license is effective for one year after issuance and must be renewed annually. Calder has renewed its slot machine license every year since 2009. At the time Calder sought its initial slot machine license, and just prior to constructing its slot machine facility, Calder’s pari-mutuel facility included: a large main dirt race track, and a smaller turf course; a paddock area, including a patron viewing area of the paddock, and a walking ring in the paddock area; 1,850 stables and a barn area (the backside); a detention barn; state veterinary offices; a totalizator board; a winner’s circle; outdoor pari-mutuel wagering areas; a large grandstand building built in 1971 which housed: a grandstand seating area, which had a capacity in excess of 10,000 seats; several restaurants and lounges; pari-mutuel wagering betting areas; freestanding pari-mutuel machines; stewards’ offices; state offices; a money room; restrooms; and elevators to access the various floors of the building; outdoor concessions (tiki huts), outdoor patron seating, and an outdoor pari-mutuel wagering area to accommodate patrons who sat outside the grandstand building; and parking lots, sidewalks to connect to the various areas, and other physical components associated with the conduct of live thoroughbred racing. All of the above-mentioned areas combined to support the live pari-mutuel wagering activities conducted by Calder and together constituted Calder’s pari-mutuel facility as defined in section 550.002(23). Calder’s designated slot machine gaming area was built in a separate building, hereinafter referred to as the “Casino,” located within the boundaries of Calder’s facility. The Casino opened for business in 2010. Calder built a covered sidewalk between the grandstand and the Casino to facilitate the movement of patrons between the two parts of the property. While the indoor grandstand was a dedicated location for patrons to watch the races and place bets, patrons were also able to watch the races and place bets outside on the racetrack apron, in front of the grandstand. As noted above, Florida law currently authorizes eight licensed pari-mutuel facilities to operate slot machine gaming facilities. These facilities consist of two thoroughbred permit holders (Calder Race Course and Gulfstream Park); one harness horse track permit holder (Pompano Park); one quarter horse permit holder (Hialeah Race Track); two dog track permit holders (Hollywood and Flagler dog tracks); and two jai alai permit holders (Dania and Miami Jai Alai). Section 551.114(4), Florida Statutes, provides: 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. Calder is the only one of the eight slot machine licensees that chose to locate its slot machine facility in a separate, newly constructed building. All seven of the other licensees operate their slot machine facilities within the same buildings as their previously existing pari-mutuel facilities. When it issued Calder’s initial slot machine license, the Division determined that Calder’s newly built Casino was in compliance with the statute’s requirement that it be “contiguous and connected” to the existing pari-mutuel facility. This determination was not challenged by the FHBPA or any other entity. The Casino has remained in the same location on the Calder property since it opened in 2010. Calder’s grandstand was built in 1971 and was approximately 420,000 square feet, seven stories tall, and seated approximately 15,575 people. Calder’s live thoroughbred racing attendance and revenues began to decline in 2004 and continued to drop throughout the next decade. By 2013, attendance at Calder for thoroughbred racing had dropped to a total of 118,000 patron visits, or an average of 439 patrons per day. This contrasts with 2004, when total attendance was 841,000, for an average daily attendance of 3,351. Horsemen’s purses similarly declined, from $26,707,755 in 2004 to $7,751,215 in 2013. In an effort to cut costs, Calder began closing off floors of its grandstand in 2008. By the 2013 and 2014 seasons, only about half the grandstand remained in use. Calder’s grandstand building did not have a traditional central air conditioning system; rather, it had cooling towers at either end of the building. The design of the air conditioning system was such that it continued to cool all seven floors even when some had been closed off from use. Therefore, the only savings Calder could realize from closing off floors was in labor costs. Calder’s air conditioning costs for the grandstand were around $55,000 per month. Calder was also required by law to maintain elevator service to all floors, at a maintenance cost of about $140,000 per year. These costs were incurred whether or not the track was conducting a race meet. A further blow to Calder’s thoroughbred racing fortunes came when Gulfstream Park decided to race year-round, thereby coming into direct competition with Calder’s winter race meet. By 2013, Calder was losing more than $5 million per year on its pari-mutuel activities. In 2014, Calder decided to cut its losses by demolishing the grandstand building. Calder did not request permission from the Division to tear down the grandstand. However, Division personnel visited Calder regularly and were well aware of Calder’s plans. No one from the Division advised Calder that tearing down the grandstand would create a slot machine compliance issue. Also in 2014, Calder entered into a contract with Gulfstream Park to outsource the operation of its race meets. Since July 1, 2014, Gulfstream Park and its racing personnel have conducted Calder’s full schedule of live racing at the Calder facility. Gulfstream Park’s first season of operating the Calder race meet began in October 2014. Gulfstream Park initially intended to operate the race meet from the racetrack apron, thereby foregoing a lease on Calder’s still-standing grandstand. However, due to the short time between execution of the lease and commencement of the race meet, Gulfstream Park was forced to lease the first floor of the grandstand to run the meet and part of the seventh floor to house the race officials. The 2014 race meet was the last time that patrons placed bets in the Calder grandstand building. In 2015, Calder’s race meet was conducted exclusively on the apron. In addition to the outdoor areas Calder has historically maintained on the apron, a tent was erected to house the wagering machines, video screens, and seating for patrons. The grandstand was being prepared for demolition and was not used during the 2015 Calder race meet. Demolition of the grandstand began in 2015 and was completed in 2016. At present, Calder’s live viewing locations include areas in front of where the former grandstand building stood, as well as to the east of the former grandstand area. These areas still contain outdoor seating and tiki huts where patrons can get food and drinks, view the race track, and wager on live racing events. The distance a patron must travel from the Casino to the pari-mutuel wagering area is roughly the same as it was when the grandstand building existed. The difference is that prior to closure of the grandstand, patrons could exit the Casino, walk a short distance on the covered walkway, and then enter the air-conditioned grandstand building, through which they could proceed the hundred yards or so to the wagering area. Now, patrons wishing to go from the Casino to the outdoor pari-mutuel wagering area must take a walkway that proceeds around the fenced-off footprint of the old grandstand building. For a portion of the path, the walkway is not covered. The Casino remains where it was in 2010. The wagering area on the racetrack apron has not moved. The only change in the Calder facility is the demolition of the grandstand building. Calder’s plan is to convert the former grandstand area into a greenspace. The entire property remains under the control of Calder. Nothing obstructs passage between the Casino and any other portion of the Calder property. Since Calder opened the Casino in 2010, the Division has renewed its slot machine license annually, without objection from any third party, through the renewal for the fiscal year commencing July 1, 2016. Even the instant case is not a direct challenge to Calder’s 2017-2018 license renewal. Commencing on October 5, 2016, the FHBPA began writing to various Division personnel complaining that the demolition of the grandstand caused the Calder Casino to no longer be “contiguous and connected to a live gaming facility” as required by section 551.114(4), and requesting the Division to commence enforcement action against Calder. In October 2016, the Division’s Office of Investigations conducted an inspection of Calder and did not find any violation related to section 551.114(4). Finding no violations during its inspection, the Office of Investigations saw no need to make a written report and did not initiate a formal investigation. Calder applied for its 2017-2018 slot machine license renewal on May 9, 2017. On June 20, 2017, the FHBPA served the Division with a 30-day notice of its intention to file an unadopted rule challenge against the Division “for its willful failure to enforce the requirements of [section 551.114(4)] by continuing to allow [Calder], as a Division licensee, to maintain its license while it clearly operates its Slots Building in violation of said statute.” On July 9, 2017, the Division renewed Calder’s slot machine license for the license year commencing July 1, 2017, without any further analysis as to whether the Casino was in compliance with section 551.114(4). The FHBPA contends that it has standing to challenge the Division’s purported unadopted rule because a substantial number of its members would be substantially affected by the Division’s regulatory actions. The FHBPA notes that it is specifically named in the statutes at issue in this proceeding and is itself substantially affected by agency decisions regarding Calder’s compliance with regulatory statutes because the FHBPA receives a percentage of the total horse racing purse pools awarded at Calder. The Legislature has enacted specific conditions to be met by applicants for slot machine licenses to ensure the promotion of horse racing in Florida. The FHBPA concludes that compliance with the relevant statutes, which is intended to promote horse racing in the state, directly affects it and its members. The Petition states that the necessary effect of compliance with section 551.114(4) is to expose slot machine players to the live thoroughbred racing being conducted elsewhere on the premises. This exposure necessarily increases the chance of patrons wagering on horseracing, thereby increasing the monies being directed to the purse pool for the benefit of FHBPA members. The Petition alleges that the current configuration at Calder’s premises fails to expose the slot machine patrons to the horseracing being conducted and decreases the chances those patrons will wager on horseracing. In contrast, the Division observes that this proceeding relates to a slot machine license and neither the FHBPA nor its members are licensed or regulated under chapter 551, nor do they promote or participate in the slot machine industry. The Division concedes the FHBPA’s interest in Calder’s thoroughbred horseracing activities under chapter 550, and the slot machine revenues the FHBPA receives to supplement racing purses pursuant to chapter 551. However, the Division points out that if the FHBPA receives the relief it seeks, the prospective effect would be to deprive its members of the revenues they derive from Calder’s slot machine operations. The Division suggests that the FHBPA lacks standing because its asserted scope of interest and activity--the maximization of purses to be paid out to its members--is irreconcilably adverse to the relief its requests in this proceeding. In the Petition, the FHBPA asserted that its interest in the agency statement is lost revenues. The alleged lack of “contiguity and connectedness” will fail to expose the slot machine patrons to the horseracing being conducted elsewhere on the Calder premises, thereby decreasing the chance that these slot machine players will wager on horseracing. The FHBPA did not directly address the loss of slot machine revenues its members would suffer if Calder’s slot machine license were not renewed. The FHBPA’s chief concern is that slot machine wagering was originally approved only as an adjunct to existing, licensed pari-mutuel facilities, with the promise that slot machine revenues would support and enhance Florida’s horseracing, greyhound racing, and jai alai industries. Now, at least at Calder, the tail is wagging the dog: casino revenues far outstrip live thoroughbred racing revenues. Calder is actively disinvesting in its thoroughbred racing business, outsourcing its operation to Gulfstream and tearing down its grandstand. Maureen Adams, Calder’s president and general manager, candidly testified that Calder would get out of the live horseracing business altogether if the Legislature would “decouple” the slot machine operations from the pari-mutuel operations. It is found that the FHBPA has articulated a sufficient interest to establish standing to bring this unadopted rule challenge as part of its effort to preserve what it contends is the purpose of the constitutional amendment and implementing legislation establishing slot machine operations in Miami-Dade and Broward Counties: the promotion of and economic support for the pari-mutuel gaming industry, including thoroughbred horseracing. The FHBPA’s asserted interest in this proceeding is consistent with the organization’s stated purpose. As to whether the Division’s action constituted an unadopted rule, the Petition alleged: The Division's approval and issuance of a renewed slot machine gaming license to Calder reflects and implements a statement of agency policy interpreting the "connected and contiguous" requirement of Fla. Stat. 551.114 so as to allow the issuance of slot machine gaming license to permitholders whose designated slot machine gaming area is contained at a location that is a distance from and physically apart from the area where a live gaming facility is located. This new policy, which has not been promulgated as a rule, is a statement of general applicability because it announces an inclusive interpretation of the term "connected and contiguous" that will serve as the basis for other pari-mutuel wagering permitholders to operate a slot machine gaming facility. The evidence presented at the hearing established that the operation of slot machines is limited to the eight pari- mutuel facilities in Broward and Miami-Dade Counties that were in existence at the time of and had conducted live racing or games in the two calendar years prior to the adoption of Article X, Section 23. Absent a further constitutional amendment, the class of slot machine licensees cannot expand beyond these eight pari-mutuel facilities. Even if it were conceded that the Division’s statement is one of general applicability, its potential application would be limited to these eight entities. Section 550.114(4) provides three options for the location of “designated slot machine gaming areas.”3/ First, the slot machine gaming area may be located “within the current live gaming facility.” Second, the slot machine gaming area may be placed “in an existing building that must be contiguous and connected to the live gaming facility.” Third, the slot machine gaming area may be located in a newly constructed building, provided that new building is contiguous and connected to the live gaming facility. The evidence presented at the hearing established that seven of the eight eligible pari-mutuel facilities chose option one for their slot machine gaming areas; that is, they located the slot machine gaming area within their current live gaming facilities. No one chose option two. Only Calder chose option three and constructed a new building to house its slot machine gaming area. As matters stood at the time of the hearing, Calder was the only licensee that could possibly be affected by a Division interpretation of the “contiguous and connected” requirement of the statute. Unless another pari-mutuel facility in the future undertakes to construct a new building for its slot machine gaming area or to move its slot machine gaming area to a different existing building, the alleged unadopted rule is applicable only to Calder. The evidence indicated that the Division did not give much thought to the question whether demolishing the grandstand could affect Calder’s slot machine licensure until the FHBPA began complaining about it. The Division then considered the FHBPA’s objections and concluded that Calder’s slot machine license should be renewed.4/ The Division’s reasoning was essentially that the Casino had not moved, the racetrack had not moved, and no impediment had been placed between them. The demolition of the grandstand had the effect of forcing patrons to take a slightly different path between the Casino and the pari-mutuel facility, and to walk part of the way in the elements rather than briefly under a covered walkway and then through an enclosed air conditioned grandstand. The Casino has never been physically attached to the pari-mutuel facility; it has always been linked by a sidewalk. The demolition of the grandstand did nothing to change the position of the Casino in relation to the pari-mutuel facility. Both facilities are on the Calder property and are still linked by a sidewalk. The loss of the grandstand only made the passage from the Casino to the racetrack less comfortable for those who prefer air conditioning to a walk outdoors. The Division concluded that the Casino is now as “contiguous and connected” to Calder’s pari-mutuel facility as it ever was. The FHBPA contends that the absence of an air conditioned grandstand building is critical. Because section 551.114(4) states that a designated slot machine gaming area may be located within the current live gaming facility, the Legislature “is necessarily stating that a ‘live gaming facility’ is a structure that is able to house the operation of a slot machine gaming area.” If an area cannot house a slot machine gaming area, then it cannot be a “live gaming facility” within the terms of the statute. The FHBPA next points to the testimony of Casey Smith, the Division’s Chief of Slot Operations, who stated that a tent on the apron of a racetrack would not be a viable option for a slot machine operation because “slot machines would be sensitive to temperature, humidity, stuff like that, so you know, doing anything long term in a tent like that probably is not something that’s going to work.” Mr. Smith also noted the necessity of security and a surveillance system. The FHBPA argues that Mr. Smith’s testimony, read together with the “live gaming facility” language of section 551.114(4), “make it clear that a ‘live gaming facility’ must necessarily be an air conditioned structure with enclosed walls, a roof and electricity that is capable of having a surveillance system installed.” In the case of Calder, the “live gaming facility” must be an air conditioned structure with enclosed walls and a roof that allows the public to view and wager on thoroughbred horseraces being conducted “live and in plain view.” The FHBPA contends that to interpret “live gaming facility” to mean anything less than an air conditioned structure with enclosed walls and a roof would render the first part of section 551.114(4) “meaningless.” The FHBPA’s argument would have some force if the first part of section 551.114(4) stood alone, i.e., if a pari- mutuel licensee’s only option were to place the slot machine gaming area within the current live gaming facility. As noted above, however, the plain language of the statute gives a licensee two other options: to place the slot machine gaming area in an existing building that is contiguous and connected to the live gaming facility, or to construct a new building that is contiguous and connected to the live gaming facility. The FHBPA’s contention is that the statute requires a live gaming facility to be fully capable of housing slot machines, even where the slot machines are in fact housed elsewhere. The language of section 551.114(4) does not support this reading.5/ It is found that the Division’s action in approving the renewal of Calder’s slot machine license was based on facts specific to Calder, applied only to Calder, and constituted an order, not an unadopted rule. “Contiguous and connected” is an undefined term in the statute. Without belaboring the dictionary definitions of these common words, the undersigned finds that the Division was entitled to some exercise of discretion in applying the term “contiguous and connected” to the unique facts on the ground at Calder, without going through the process of adopting a rule that would apply only to Calder. Because the Division’s issuance of a slot machine license renewal to Calder was not an unadopted rule, there is no need to further address the correctness of the Division’s interpretation of “contiguous and continuous.”
The Issue Whether the proposed repeal of Rule 61D-11.027, Florida Administrative Code, is an invalid exercise of delegated legislative authority because the repeal has the effect of creating or implementing a new rule or policy.
Findings Of Fact The Florida Legislature enacted Section 849.086, Florida Statutes, in 1996. The law authorized the establishment of “cardrooms” at licensed pari-mutuel facilities and dictated the parameters by which games may be conducted at such facilities. In essence, the cardrooms conduct games wherein the players compete against one another. The participants do not wager against “the house.” Instead, the house, that is, the pari-mutuel facility, conducts the games in a non-banking manner. This means the house does not have a financial interest in the outcome of the game(s). For purposes of this case, it is determined that the players who win share fractions of the “pot” created by the entry fees paid to participate in the game(s). The Petitioners in this cause are licensed facilities that have operated cardrooms. Each Petitioner holds a pari- mutuel wagering permit and a valid cardroom license. The Respondent is the state agency charged with the responsibility of administering Section 849.086, Florida Statutes (2005). Section 849.086, Florida Statutes, was amended in 2003 by Section 4, Chapter 2003-295, Laws of Florida. The 2003 amendment imposed a $2.00 bet limitation, with a maximum of three raises per round of betting. This change to the statute required the Respondent to revisit the rules governing cardrooms and, more specifically, the concept of poker “tournaments” being conducted at pari-mutuel facilities. To that end, and after extensive rule-making proceedings, the Respondent adopted rules that were incorporated in Florida Administrative Code Chapter 61D-11. The Respondent intended for the rules to address concerns regarding the $2.00 bet and raise limitations as well as how “re-buys” might affect or potentially allow a violation of such provisions. A “re-buy” describes when a card player is allowed to purchase more chips from the house during a game(s). Florida Administrative Code Rule 61D-11.027 was adopted on May 9, 2004. It was then challenged by pari-mutuel facilities who alleged the rule encompassed more than the statute authorized. Such challenge (DOAH Case No. 04-2950RX), was granted. The Final Order found that the rule (Florida Administrative Code Rule 61D-11.027(2)(a)) exceeded the Agency’s grant of rulemaking authority, modified the specific law implemented, and was arbitrary. Accordingly, the Final Order (DOAH Case No. 04-2950RX) determined that the rule violated Subsections 120.52(8)(b), (c), and (e), Florida Statutes. The Florida First District Court of Appeal affirmed the Final Order by a Per Curiam decision issued on October 28, 2005. Thereafter, the Respondent proceeded with the emergency repeal of the tournament rule in its entirety and issued an advisory letter to all cardroom license holders. The Respondent represented that it cannot reconcile the holding of the court with the explicit language of Section 849.086(8), Florida Statutes (2005). At the hearing, the Respondent represented that additional rulemaking will be necessary. The Respondent does not dispute that tournaments are permissible under the statute. Moreover, the parties agree that prior to the rule, repeal tournaments were conducted using tokens or chips that did not have value. Tournaments were played at licensed cardroom facilities during the period commencing in May 2004 through November 9, 2005. During that time (the period the rule was in effect) counties, cities, and the state received income from the monies remitted by the cardroom facilities. Additionally, the cardrooms employed persons to work the facilities to conduct the various games. After the repeal of the rule, revenues from the cardrooms decreased substantially. Similarly, the cardrooms did not need the number of employees as games were not being conducted. Tournaments at the St. Petersburg Kennel Club have not been conducted since January 17, 2006. From November 2005 through January 17, 2006, the tournaments at the St. Petersburg Kennel Club were conducted using chips or tokens that had “fractional value.” The “fraction” did not correspond to the entry fee charged for the tournament. It is not known whether or not re-buys during the tournaments were allowed. The Respondent issued a Memorandum to Pari-Mutuel General Managers at Cardroom Facilities and Cardroom Managers on January 12, 2006, that provided in part: In light of the recent ruling by the First District Court of Appeals, the Division’s administrative rules regarding tournaments have been repealed on an emergency basis, and are scheduled to be repealed permanently. The Division distributed a memorandum to all cardroom operators regarding Clarification of Cardroom Tournament Rules and Jackpots on November 9, 2005. The Division has also expressed on numerous occasions a serious concern of cardroom operators issuing chips in a fashion that does not represent an even value exchange for money in an attempt to circumvent the $2 bet and three raise limitation outlined in Chapter 849.086(8)(b), Florida Statutes. [Italics in original.] The November 9, 2005, Memorandum referred to in paragraph 14 above provided, in pertinent part: This memorandum is intended to clarify issues regarding the recent ruling by the First District Court of Appeals which affirmed an earlier ruling of the Division of Administrative Hearings (DOAH). The DOAH ruling found that various cardroom rules, which were challenged by Dania Jai Alai and Calder Race Course, are invalid. These rules addressed tournaments, jackpots, the Division’s approval of games, and gifts that enable play in an authorized game. As a result of the ruling, today the Division filed emergency rules to ensure that tournaments are played in compliance with the bet limitation of Section 849.086(8)(b), Florida Statutes. * * * The Final Order that was affirmed by the First District Court of Appeals invalidated the Division’s rules regarding entry fees, re-buys and single table tournaments. The judge held that tournament play is authorized by the cardroom statute. Therefore, cardrooms may set their own entry fees and allow re-buys in tournaments and hold single table tournaments. * * * Unauthorized activity, such as conducting wagering on tournaments that does not conform with the wagering restrictions found in Section 849.086(8)(b), Florida Statutes, or offering of jackpots or gifts that do not comply with the requirements that cardrooms be operated in strict conformity with the statute as required by Section 849.086(3), Florida Statutes, may result in disciplinary action. The memorandums identified above did not change or modify the Respondent’s position regarding whether tournaments are legal or permitted by the statute. To the contrary, the memorandums merely advised the cardroom facilities that they would be held to the statutory standard regarding wagering and that jackpots and gifts would be prohibited. Prior to the appeal of the rule, the Respondent routinely approved tournaments that were based upon the following scheme: A participant paid a $32 buy-in and paid the house $13 for the fee to conduct the tournament. Then the participant received a number of no-value chips that were used to play a multiple number of games of poker. At the end of the designated time, number of games, or whenever the designated end occurred (on the same day of play), winners were announced based upon the number of chips they held. Participants were “ranked” and awarded cash prizes from the pot of entry fees. The $32 entry fee was a mathematical calculation thought to assure that no participant would violate the statute’s bet and raise limitations. Whether or not the “all in” concept violated the statute was not considered as the chips were deemed to have no value in and of themselves. This “no value” chip was a fiction that the Respondent supported as, in theory, the $32 player buy-in comported with a mathematical calculation that was within the statutory guideline. The payouts were determined based upon the number of participants and were set by percentage with the first place person receiving the largest payout. Additionally, participants under the approved scheme were not allowed re-buys. That assured that all participants started with the same number of chips and had the same “betting” potential. Finally, winners were not paid or could not receive prizes outside the “pot” created by the entry fees. A nominal gift (such as a T-shirt) was not considered a violation. Prizes such as giant television sets or vacations were not acceptable. All winnings were to be paid from the buy-in fees and all buy-in fees were to be returned to the players in winnings.
The Issue Whether Willie J. Thompson is entitled to the $5,000.00 prize for a winning lottery ticket presented by Mr. Thompson to the Department of the Lottery for collection?
Findings Of Fact Horace Bell purchased lottery ticket number 04-202290-059 (hereinafter referred to as the "Ticket") on approximately December 11, 1988. The Ticket was an instant winning ticket in the amount of $5,000.00, in the Florida Lottery's Money Tree Instant game. Willie J. Thompson drove Mr. Bell, his wife and other family members to Tallahassee on December 12, 1988, to file a claim for the prize. Upon arriving at the Lottery's offices Mr. Bell found that he did not have proper identification. Therefore, he allowed Mr. Thompson to present the ticket for collection because Mr. Thompson had proper identification. On December 12, 1988, Mr. Thompson completed a Florida Lottery Winner Claim Form (hereinafter referred to as the "Form") and submitted the Form and the Ticket to the Lottery. On the back of the Ticket Mr. Thompson listed his name and address on the spaces provided for the person claiming the prize and signed the Ticket. Mr. Thompson listed his name, Social Security Number, address and phone number on the Form. Mr. Thompson signed the Form as the "Claimant." In a letter dated December 12, 1988, DHRS notified the Lottery that Mr. Thompson owed $4,026.40 in Title IV-D child support arrearages as of December 12, 1988. Mr. Thompson has been paying his child support arrearages by having $30.00 taken out of each of his pay checks. The $5,000.00 prize was forwarded from the Lottery to the Comptroller on December 12, 1988. By letter dated December 20, 1988, Mr. Thompson was notified that the $5,000.00 prize for the Ticket he submitted was being transmitted to the Comptroller for possible payment of his Title IV-D child support arrearages. Mr. Thompson was notified by the Comptroller by letter dated December 28, 1988, that the Comptroller intended to apply $4,026.40 of the $5,000.00 prize toward his unpaid obligation. Mr. Thompson was provided a state warrant for the $973.60 balance of the $5,000.00 prize. Mr. Thompson requested a formal administrative hearing to contest the proposed action of the Comptroller. Mr. Thompson's total obligation as of the date of the formal hearing had been reduced by the court-ordered $30.00 payments he has made since December, 1988. As of the date of the formal hearing, Mr. Thompson's total obligation was $3,335.60. His obligation will reduce further by payments made up until the date of the issuance of a Final Order in this matter. Mr. Thompson should be given credit for these additional payments.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it Is RECOMMENDED that a Final Order be issued providing for payment of the portion of the $5,000.00 prize attributable to the Ticket owed by Mr. Thompson as child support arrearages as of the date of the Final Order to DHRS. The balance of the $5,000.00 prize should be paid to Mr. Thompson. DONE and ENTERED this 21st day of June, 1989, in Tallahassee, Florida. LARRY J. SARTIN 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 21st day of June, 1989. APPENDIX Case Number 89-1102 The Petitioners have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioners' Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1. 1. 2. 2-3. 3. 4 and 6. 4 7. 5 9. 6 11. 7 13. 8-9 Conclusions of law. COPIES FURNISHED: Jo Ann Levin Senior Attorney Office of Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Louisa E. Hargrett Senior Attorney Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301 Chriss Walker Senior Attorney Department of Health and Rehabilitative Services 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Willie J. Thompson Post Office Box 3655 Jacksonville, Florida 32206 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 Charles L. Stutts General Counsel The Capitol, Plaza Level Tallahassee, Florida 32399-0350
The Issue Whether Petitioner, the Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering, is authorized to charge and collect interest from Respondent, Florida Gaming Centers, Inc., on the unpaid value of the outsbook for the 1995-1996 meet from August 29, 1997, the date payment of the value of the outsbook was due, to September 8, 1998, the date payment was received by Petitioner.
Findings Of Fact At all times relevant hereto, the Respondent held a permit to conduct jai alai pari-mutuel wagering, under License No. 2909-D Amended, issued by the Department. Between July 1, 1995, and June 30, 1996, inclusive, Respondent held jai alai games for the purpose of conducting pari-mutuel wagering on those games. Respondent's meet for the relevant time period ended on June 30, 1996. One year and sixty days after the end of the State of Florida's (State) fiscal year of June 30, 1996, any "out" tickets that remained uncashed escheated to the State pursuant to Section 550.1645(2), Florida Statutes. Once these tickets or the value thereof escheated to the State, Respondent was required to pay the value of such tickets, as reflected on its outsbook, to the Department no later than August 29, 1997. Pursuant to the outsbook prepared by Respondent, the value of the outs for the 1995-1996 meet was $108,221.20. Nonetheless, Respondent failed to submit to the Department the value of the balance of the outsbook within the prescribed time frame and instead held these funds. On June 2, 1998, the Department served an Administrative Complaint on Respondent, alleging that Respondent had failed to timely submit the value of the outsbook to Petitioner. By letter dated September 4, 1998, Respondent submitted to the Department a check for $109,128.60 as payment for the unpaid value of Respondent's outsbook for the 1995-1996 meet. The Department received Respondent's payment on September 8, 1998. Of the total amount Respondent paid over to the Department, $108,221.20 was credited against the unpaid value of the outsbook for the 1995-1996 meet, resulting in full payment of the outstanding outsbook value. The remaining $907.40 paid by Respondent to Petitioner was an overpayment. Petitioner alleges that Respondent is responsible for interest accrued on the unpaid value of the outsbook for the period of time that amount remained unpaid. According to the Department, the interest owed by Respondent as a result of its failure to timely remit the value of the outsbook, "shall be determined at a rate per annum . . . equal to the State's average investment rate for the preceding month to the month for which interest is being calculated." The average interest rate earned on the investment of State funds as determined by the State Treasurer and/or Comptroller" for the time period of August 1997 through August 1998, was 6.73 percent. The Department determined that the interest "shall accrue on the unpaid aggregate principal amount due the State for the month(s) from the respective due date." Based on its calculations and after deducting Respondent's overpayment of $907.40, the Department asserts that Respondent owes the Department approximately $6,573.85 in accrued interest. Respondent disputes that the Department has authority to collect interest on the unpaid amount of the outsbook and alleges the powers of the Department under Section 550.0251, Florida Statutes, do not include such authority.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that (1) an administrative fine of $1,000.00 be imposed against the Respondent for the violation Section 550.1645, Florida Statutes; and, (2) Respondent shall receive a credit of $907.40 toward payment of the administrative fine. RECOMMENDED this 28th day of January, 1999, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 28th day of January, 1999. COPIES FURNISHED: Deborah R. Miller, Director Division of Pari-Mutuel Wagering Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 William P. Cagney, III, Esquire 3400 Financial Center 200 South Biscayne Boulevard Miami, Florida 33131 Eric H. Miller, Esquire Chief Assistant General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 William Woodyard Acting General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
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.
