Fun in Florida?
Recent developments in Florida gaming include rulings on card rooms, relocating gaming permits, attempts to legalize daily fantasy sports and allow banked card games at parimutuels. Other actions have led the Seminole Tribe of Florida to express concern over its exclusive gaming rights.
Administrative Judge Robert Meale recently ruled the Florida Department of Business and Professional Regulation was wrong to take back a summer jai alai permit it said was issued by mistake. Regulators allowed the Havenick family to move the permit from leased space at Miami Jai Alai to the Casino at Dania Beach, which the family manages. Regulators revoked the permit, claiming they were wrong in approving it to be moved from Miami-Dade to Broward County, because permits cannot be transferred from one county to another.
However, Meale ruled state law does not ban moving permits between counties, as long as they are moved within 35 miles from the original location. The judge accused regulators of trying to change the policy due to political pressure from Fronton Holdings, which owns Miami Jai Alai.
Summer Partners attorney John Lockwood stated, “A government agency cannot just take away a license because they changed their mind. This allows us to continue forward with our planned operations at Dania and upholds the division’s long-standing interpretation of the statute.”
In other developments, the Seminole Tribe filed a lawsuit in the Fourth Judicial Circuit Court of Duval County to shut down 25 internet cafes in Duval County for allegedly violating the tribe’s exclusive rights to casino gaming. The tribe contends the cafes allow patrons to pay money to play various forms of electronic gambling for a chance to win prize money, violating anti-gambling laws under Chapter 849 of Florida Statutes and creating unfair competition.
Tribal attorney Barry Richard said the games simulate slots, card games and other types of gambling. They primarily are located in coffee shops, cafes or restaurants, but state gaming regulators only have jurisdiction over facilities with liquor licenses, which most of these establishments don’t have, Richard said.
The Seminoles if the situation continues they would be within their rights to end the revenue sharing arrangement with the state, under which the tribe has paid more than $1 billion since 2010.
Another issue concerns designated player card games at parimutuels. The Division of Parimutuel Wagering will hold a workshop January 4 regarding a proposal that the designated player, who acts as the bank in player-banked games such as blackjack, must rotate clockwise on a hand-by-hand basis.
Last year Administrative Law Judge E. Gary Early ruled regulators were wrong to do away with a rule governing controversial designated player card games without replacing the regulations. The judge sided with nine operators of card rooms in Miami, Jacksonville and West Palm Beach regarding the popular games, introduced in 2012, which generate $87 million in annual revenue. Last month the Court of Appeals upheld Early’s decision. The state could be on the hook for legal expenses of $450,000 if Early agrees the state must pay the nine defendants’ two attorneys $50,000 per defendant in legal fees.
Regarding gaming legislation, Senate Regulated Industries Committee passed SB 374, exempting fantasy sports contests from state gaming regulations. However, the Seminoles contend allowing fantasy sports would violate their gaming compact and give the tribe the right to stop paying the state $200 million annually.
Bill sponsor, state Senator Dana Young, said the contests are not gambling. She noted an opinion from state Supreme Court Justice Ken Bell stating that passing a DFS bill should have no effect on the tribe’s revenue payments to the state. The House version of the bill is HB 223.
A pre-filed Senate gaming bill, SB 840, would include several issues that were considered last year. It would lower taxes on slot revenue from 35 percent to 25 percent; allow certain types of designated player-banked games at parimutuels; decouple live racing from other gambling at parimutuels; and exempt fantasy contests from state regulation as long as the operator conducted no more than 10 contests in a year.
Meanwhile, the political action group Voters in Charge has submitted more than 574,000 or the required 766,200 valid signatures required to place on the 2018 ballot a constitutional amendment requiring statewide referendums for any future gambling expansion.
Florida law enforcement officials have been battling a proliferation of internet cafés since charges were dropped earlier this year against Jacksonville attorney Kelly Mathis, who was convicted in 2013 of racketeering, possessing illegal slot machines and numerous other counts in a $300 million operation.
Volusia County Sheriff Mike Chitwood said, “Once that court case came out, you started to see them become more emboldened by this and they just said, ‘Hey, let’s go.’” This summer his deputies raided the Hot Spot internet café in Ormond Beach and seized $10,000 in cash. Earlier this month in Lake County, after weeks of undercover work, Operation Jackpot resulted in a raid of 10 internet cafes. Officers seized more than $200,000 in cash and arrested four people charged with keeping an establishment for gambling. Lake County officials said as many as two dozen internet cafes operate there.
Chitwood said, “I want the legislature to figure this out for us. Either it’s gambling, in which case you’re going to put tougher penalties and make it worth our while, or you’re going to tax it, regulate it. Everybody is kind of stuck with ‘Which way do we go here?’”
Meanwhile, law-enforcement officials said they have to conduct costly, time-consuming investigations that could be tossed out of court. Internet café owners claim their operations are legal because their slot machines and tabletop games are not based on chance but on a pre-set algorithm, therefore the games are not gambling.
The internet cafes also are magnets for crime. Lieutenant John Herrell said, “People are asking us, ‘Why don’t you hit these places?’” He responds enforcement operations have tapered off due to the lack of “judicial clarification.”
Another issue is the opioid epidemic, said Tavares Police Corporal Sarah Coursey. “We were finding hypodermic needles in the parking lot and getting a lot of drug complaints” outside the Hot Spot internet café on U.S. Highway 441. Tavares police raided the café in November, seizing $52,000 in cash, two weapons and several slot machines. “The ones in Las Vegas and the casinos in Tampa, they’re regulated, they get audited, they get checked. This can be rigged in any way,” Coursey said.
Assistant State Attorney Mark Simpson added, “There’s also the argument, ‘Well, you’re not hurting anybody and it’s a victimless crime, and the bottom line is why are you trying to take the fun away, especially from seniors?’ They’re going to keep pumping money into this to get gambling on every street corner because it’s so profitable.”
Mathis was convicted by a Seminole County jury in 2013 and sentenced to six years in prison. But the judge allowed him to remain free while the case was appealed. The 5th District Circuit Court of Appeal reversed his conviction and ordered a new trial in October 2016. However, this past March the state prosecutor handling the case dropped the charges rather than go to the expense of a repeat trial. Mathis claimed he followed the state’s regulations governing sweepstakes and contests.
Dog Days Done?
One of the proposals being considered by the Florida Constitution Revision Commission would allow voters to end greyhound racing after December 31, 2019. The commission meets every 20 years to review amendments to submit to voters; 60 percent approval is required. The commission chairman said only eight to 16 amendments will advance to the November 2018 ballot.
However, the issue could be determined sooner by the legislature. State Senator Travis Hutson has introduced Senate Bill 840 which would decouple live dog racing from offering other gambling, such as a card room, if the racetrack has held a full racing schedule for 10 consecutive years.
Florida is one of only six states that still allow dog racing; it’s outlawed in 40 states. About 450 racing dogs have died at Florida’s 12 racetracks since 2013, when the state first required mortality data. Between 2008 and 2015, another 13,000-plus greyhounds have been injured, mostly with broken legs, animal welfare groups reported. Additionally, the report said nearly half of the 847 greyhounds who tested positive for drugs were in Florida; 71 tested positive for cocaine.
The report also noted Florida budgets $2.7 million annually for drug-testing racing animals and samples. Experts said without dog racing, these funds could be redirected toward job training for individuals who may lose their job when racing stops.
At the same time, wagering on dog races dropped from $3.5 billion in 1991 to t $500 million by 2014, according to racing association figures. The racetracks are able to stay financially afloat due to poker games and profitable card rooms.
Carey Theil, executive director at Grey2K USA Worldwide, a greyhound advocacy group, said, “Us winning on this issue is inevitable.”