15-006774 West Flagler Associates, Ltd. vs. Department Of Business And Professional Regulation, Division Of Pari-Mutuel Wagering
 Status: Closed
Recommended Order on Monday, June 20, 2016.


View Dockets  
Summary: Petitioner did not demonstrate that the criteria for the creation of new summer jai alai permits were met, thus the applications for the permits should be denied.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8WEST FLAGLER ASSOCIATES, LTD.,

12Petitioner ,

13vs. Case No s . 1 5 - 6773

2215 - 6774

25DEPARTMENT OF BUSINESS AND

29PROFESSIONAL REGULATION,

31DIVISION OF PARI - MUTUEL

36WAGERING ,

37Respondent .

39/

40RECOMMENDED ORDER

42This case was heard on May 2, 2016 , in Tallahassee,

52Florida, before E. Gary Early, an Administrative Law Judge

61assigned by the Division of Administrative Hearings.

68APPEARANCES

69For Petitioner: John M. Lockwood, Esquire

75Thomas J. Morton, Esquire

79The Lockwood Law Firm

83Suite 810

85106 East College Avenue

89Talla hassee, Florida 32301

93For Respondent: William D. Hall, Esquire

99Department of Business and

103Professional Regulation

105Office of the General Counsel

110Suite 40

1121940 North Mo nroe Street

117Tallahassee, Florida 32399

120STATEMENT OF THE ISSUE

124W hether the Department of Business and Professional

132Regulation, Division of Pari - M utuel Wagering (Respondent or

142Division) , should deny West Flagler Associate, Ltd.Ós

149(Petitioner or West Flagler) June 30, 2015 , and July 1, 2015,

160applications for new summer jai alai permits under section

169550.0745, Florida Statutes.

172PRELIMINARY STATEMENT

174On July 14, 2015, the D ivision filed a notice denying West

186Flagler Ó s application for a summer jai - alai permit pursuant to

199section 550.0745, based on there being no lowest handling pari -

210mutuel permitholder for consecutive fiscal years 2012/2013 and

2182013/2014 (the ÐJune ApplicationÑ) . On August 4, 2015, West

228Flagler timely filed a Petition for Administrative Hearin g

237challenging the DivisionÓs notice of denial. That case was

246identified as DBPR Case No. 2015 - 030305.

254On July 14, 2015, the Division also filed a notice denying

265West FlaglerÓs application for a summer jai - alai permit pursuant

276to section 550.0745, based o n there being no lowest handling

287pari - mutuel permithold er for consecutive fiscal years 2013/2014

297and 2014/2015 (the ÐJuly ApplicationÑ) . On August 4, 2015, West

308Flagler timely filed a Petition for Administrative Hearing

316challenging the DivisionÓs notice of denial. That case was

325identified as DBPR Case No. 2015 - 030307.

333On December 1, 2015, both cases were referred to the

343Division of Administrative Hearings for formal administrative

350h earing s .

354On December 8, 2015, pursuant to West FlaglerÓs unopposed

363mo tion, the cases were consolidated. The final hearing was

373scheduled for January 25, 2016 .

379On January 7, 2016, the parties jointly moved to continue

389the final hearing in order to al low the Division to file amended

402notices of denial, and to allow West Flagler to file amended

413petitions for administrative hearing . The motion was granted,

422the amended pleadings were filed, and the hearing was

431rescheduled for April 12, 2016 . After a further meritorious

441joint request for continuance , the final hearing was s et for

452May 2, 2016.

455On April 27, 2016, the parties filed a Joint Pre - hearing

467Stipulation in which they identified stipulated facts for which

476no further proof would be necessary. The stipulated facts have

486been accepted and considered in the preparation of this

495Recommended Order.

497The final hearing was held as scheduled on May 2, 2016 .

509Joint Exhibits 1 through 6 were received in evidence by

519stipulation of the parties.

523West Flagler called as its witness , Da niel Joseph

532Licciardi , a jai - a lai construction consultant for Southwest

542Florida Enterprises, West FlaglerÓs parent company, and the

550director of pari - mutuel operations for Dania Entertainm ent,

560Inc., d/b/a Dania Jai - Alai . PetitionerÓs Exhibits 1 through 8

572were received in evidence. PetitionerÓs Exhibit 7 is the

581deposition transcript of Tracy Swain , the designated agency

589representative pursuant to Florida Rule of Civil Procedure

5971.3 10 (b)(6). PetitionerÓs Exhibits 5 and 6 are , respectively,

607the deposition transcript s of Joe Dillmore , the DivisionÓs

616Deputy Director; and Jamie Pouncey , the DivisionÓs Senior

624Management Analyst II/Permitholder Administrator. By

629stipulation of the parties, the deposition transcripts have been

638accepted in lieu of live testimony, and have been given the

649evidentiary weight as if the deponents testified at the final

659hearing.

660The Division called as its witness , Tracy Swain, the

669DivisionÓs Revenue Program Administrator. RespondentÓs

674Exhibit s 1 through 3 were received in evidence.

683A one - volume T ranscript of the proceedings was filed on

695May 13, 201 6 . Both parties thereafter timely filed P roposed

707Recommended O rders which have been duly considered by the

717undersigned in the preparation of this Recommended Order.

725Petitioner's application fo r licensure is governed by the

734law in effect at the time the final licensure decision is made.

746See Lavernia v. DepÓt of ProfÓl Reg. , 6 16 So. 2d 53 , 54 (Fla.

7601st DCA 199 3 ). Therefore, all references to the Florida

771Statutes shall be to the 201 5 Florida Statutes, unless otherwise

782indicated.

783FINDINGS OF FACT

7861. The Division is the state agency charged with

795regulating pari - mutuel wagering activities in Florida pursuant

804to chapter 550.

8072. West Flagler is the owner of pari - mutuel permits and is

820authorized to conduct pari - mutuel pools on exhibition sports in

831Miami - Dade County pursuant to chapter 550.

8393 . There are seven pari - mutuel permits for pari - mutuel

852pools on exhibition sports in Miami - Dade County. The

862permitholders are South Florida Racin g Association, LLC ( Hialeah

872Park ) ( Ð SFRA Ñ ) ; Fronton Holdings, LLC ( Miami Jai Alai ) ; Summer

888Jai Alai Partnership ; West Flagler Associates, Ltd. (Flagler Dog

897Track) ; Calder Race Course, Inc. ; Tropical Park, LLC ; and West

907Flagler Associates, Ltd. (Magic City Jai Alai).

9144 . Summer Jai Alai Partnership is the holder of a summer

926jai alai permit.

9295 . West Flagler currently possesses a summer jai alai

939permit in Miami - Dade County.

9456 . On June 30, 2015, West Flagler filed the June

956Application, pursuant to sectio n 550.0745, for a Ðnew permitÑ to

967conduct summer jai alai in Miami - Dade County. West FlaglerÓs

978June Application was based on its conclusion that a new summer

989jai alai permit was available because SFRA had the smallest

999total pool or handle in Miami - Dade County for two consecutive

1011fiscal years, i.e. , state fiscal years 2012/2013 and 2013/2014,

1020and that SFRA declined to convert its pari - mutuel permit to a

1033permit to conduct summer jai alai.

10397 . On July 1, 2015, West Flagler filed the July

1050Application , pursuant to section 550.0745, for a Ðnew permitÑ to

1060conduct summer jai alai in Miami - Dade County. West FlaglerÓs

1071July Application was based on its conclusion that a new summer

1082jai alai permit was available b ecause S FRA again had the

1094smallest total pool or handle in Miami - Dade County for two

1106consecutive fiscal years, i.e. , state fiscal years 201 3 /201 4 and

1118201 4 /201 5 , and that SFRA again declined to convert its pari -

1132mutuel permit to a permit to conduct summer jai alai.

11428 . On July 14, 2015 , the Division denied the June

1153Application on the grounds that there was not a summer jai alai

1165permit available for fiscal years 2012/2013 and 2013/2014

1173because SFRA did not have the smallest play or total pool in

1185Miami - Dade C ounty for those two consecutive years. The Division

1197maintains that West Flagler (Magic City Jai Alai) had the

1207smallest total pool in 2012/2013 and Summer Jai Alai Partnership

1217had the smallest total pool in 2013/2014. That basis for the

1228denial remains the position of the Division in this proceeding.

12389 . On December 7, 2015, the Division issued an amended

1249notice of denial that modified the denial of the July

1259Application from one based on there being no lowest handling

1269pari - mutuel permitholder for consec utive fiscal years 2013/2014

1279and 2014/2015, to one based on the grounds that 1) Ð West Flagler

1292is incapable of converting its summer jai alai permit to a

1303summer jai alai permit because there would not be an actual

1314conversion as contemplated by statute Ñ ; and 2) Ð West Flagler has

1326not shown that the issuance of a summer jai alai permit to West

1339Flagler , which already holds a summer jai alai permit, would

1349generate an increase in total state revenue over the revenue

1359West Flagler generates under its current, id entical permit. Ñ

136910 . West FlaglerÓs June Application does not seek to

1379convert its existing summer jai alai permit to a summer jai alai

1391permit. Rather, the application is predicated upon the creation

1400of a new summer jai alai permit when SFRA declined to convert

1412its pari - mutuel permit to a permit to conduct a summer jai alai

1426fronton .

142811 . West FlaglerÓs July Application does not seek to

1438convert its existing summer jai alai permit to a summer jai alai

1450permit. Rather, the application is predicated upon the creation

1459of a new summer jai alai permit when SFRA declined to convert

1471its pari - mutuel permit to a permit to conduct a summer jai alai

1485fronton.

148612 . The disagreement between the parties regarding the

1495June Application revolves around whether Ðsimulcast exportÑ

1502wagers should be included in calculating a permitholderÓs Ðplay

1511or total pool within the countyÑ for purposes of section

1521550.0745(1). The Division argues that a permitholderÓs total

1529pool includes live wagers, in tertrack wagers, and simulcast

1538export wagers. West Flagler argues that a permitholderÓs total

1547pool includes only live wagers and intertrack wagers. 1 /

155713 . A live wager is a wager accepted at a permitted

1569Florida facility on a race or game performed live at that

1580facility. Permitholders derive income, in the form of a

1589commission, on live wagers placed at their facilities.

1597Permitholders pay taxes on live wag ers.

160414 . An intertrack wager is a wager accepted at a permitted

1616Florida facility on a race or game transmitted from and

1626performed live at, or simulcast rebroadcast from, another

1634permitted Florida facility. Permitholders derive income, in the

1642form of a commission, on wagers placed at other Florida

1652facilities on races or games transmitted from the permitholderÓs

1661facilities . Permitholders pay taxes on intertrack wagers.

166915 . A simulcast wager is a wager place d at a Florida

1682facility on an out - of - state race transmitted to the Florida

1695facility. Permitholders pay taxes on simulcast wagers.

170216 . An intertrack simulcast wager is a wager placed at a

1714Florida guest track on an out - of - state race transmitted by the

1728out - of - state track to a Florida host track, and then re -

1743t ransmitted by the Florida host track to the Florida guest

1754track. Permitholders pay taxes on intertrack simulcast wagers.

176217 . A simulcast export wager is a wager accepted at an

1774out - of - state facility on a race or game performed live at a

1789permitted Florida facility. Permitholders derive income, in the

1797form of a commission, on simulcast export wagers accepted by

1807out - of - state facilities on races or games transmitted from the

1820permitholderÓs facil ities . The Division does not know the

1830commission structure between the permitholders and out - of - state

1841facilit ies .

184418 . Permitholders do not pay taxes on simulcast export

1854wagers , and the state receive s no revenue from simulcast export

1865wagers.

186619 . In sum, live wagers, intertrack wagers, simulcast

1875wagers, and intertrack simulcast wagers are those place d at

1885Florida pari - mutuel facilities, and subject to Florida tax ation .

1897S imulcast export wagers are those placed on Florida events at

1908out - of - state facilities, and not subject to Florida tax ation .

192220 . Licensed betting facilities across the country -- and

1932generally across the world -- contract with a licensed

1941totalisator (the ÐtoteÑ) 2/ by which all wagers are accounted for.

1952Data on all w agers placed on a hosting permitholderÓs event

1963(with uncommon exceptions when an out - of - state facility

1974receiving a hosting permitholderÓs simulcast broadcast forms its

1982own pool) are sent by the tote to the hosting permitholder to be

1995included in its total price pool, and used to determine payouts

2006on winning wagers.

200921 . The totes also capture simulcast export wagers for use

2020in calculating the commission paid by the guest tracks.

202922 . A permitholderÓs pool amounts a re reported to the

2040Division by the tote company on a daily basis. The daily tote

2052report includes live, simulcast, intertrack, intertrack

2058simulcast, and simulcast export wagers.

206323 . The daily tote reports are reviewed by the DivisionÓs

2074auditing section to ensure that wagers are accounted for and

2084paid.

208524 . The Division maintains a central monitoring system by

2095which it captures the daily amounts for all wagers from the

2106daily tote reports, and compiles them up to produce a cumulative

2117report.

211825 . A permitholderÓs pool amounts are also reported to the

2129Division directly by the permitholder in monthly pari - mutuel

2139reports, and annual financial statements. The monthly reports

2147and annual financial statements are reviewed by the DivisionÓs

2156revenue section.

215826 . Since simulcast export wagers are not taxed by

2168Florida, the DivisionÓs monthly report and annual financial

2176statement forms do not include simulcast export wagers as part

2186of the facilityÓs handle.

219027 . Due to the combination of low overall handles , and tax

2202credits available for net operating losses, jai alai facilities

2211(as opposed to cardrooms operating therein) do not generate any

2221tax revenues for the state. Thus, the only revenues derived by

2232the state from jai alai facilities are the $40 per gam e daily

2245license fees and 15 - percent admission tax required by section

2256550.0951.

225728 . The parties stipulated that the Third District Court

2267of Appeal considered only live wagers and intertrack wagers in

2277its analysis of whether the Ðsmallest play or total pool within

2288the countyÑ included only wagers physically placed within Miami -

2298Dade County , as reflected in the CourtÓs opinion in South

2308Florida Racing Association v. D epartment of Business and

2317Professional Regulation , Division of Pari - Mutuel Wagering ,

2325___ S o. 3d ___, 2015 Fla. App. LEXIS 11334, 2015 WL 4546935

2338(Fla. 3d DCA July 29, 2015) . 3 /

234729 . If simulcast export wagers are excluded from a pari -

2359mutuel facilityÓs play or total pool within Miami - Dade County,

2370S FRA had the smallest total handle in Miami - Dade County for the

23842012/2013 state fiscal year.

238830 . If simulcast export wagers are included in a pari -

2400mutuel facilityÓs play or total pool within Miami - Dade County,

2411West Flagler Associates, Ltd. (Magic City Jai Alai) had the

2421smallest total handle in Miami - Dade County for the 2012/2013

2432state fiscal year.

243531 . If simulcast export wagers are excluded from a pari -

2447mutuel facilityÓs play or total pool within Miami - Dade County,

2458SFRA had the smallest total handle in Miami - Dade County for the

24712013/2014 state fiscal year.

247532 . If simulcast export wagers are included in a pari -

2487mutuel facilityÓs play or total pool within Miami - Dade County,

2498Summer Jai Alai Partnership had the smallest tot al handle in

2509Miami - Dade County for the 201 3 /201 4 state fiscal year. 4 /

252433 . If simulcast export wagers are excluded from a pari -

2536mutuel facilityÓs play or total pool within Miami - Dade County,

2547SFRA had the smallest total handle in Miami - Dade County for the

25602014/2015 state fiscal year.

256434 . If simulcast export wagers are included in a pari -

2576mutuel facilityÓs play or total pool within Miami - Dade County,

2587Summer Jai Alai Partnership had the smallest total handle in

2597Miami - Dade County for the 201 4 /201 5 state fiscal year.

261035 . Regardless of whether out - of - state simulcast export

2622wagers are included in the calculation of facilitiesÓ Ðplay or

2632total pool,Ñ a single pari - mutuel facility (either SRFA or

2644Summer Jai Alai Partnership) had the smallest play or to tal pool

2656within Miami - Dade County for the consecutive 2013/2014 and

26662014/2015 state fiscal years.

267036 . The Division did not notify West Flagler of any

2681apparent errors or omissions in its July Application.

268937 . The Division did not request that West Flagler provide

2700any additional information with its July Application.

2707CONCLUSIONS OF LAW

2710A. Authority

271238 . The Division of Administrative Hearings has

2720jurisdiction over the subject matter of this proceeding and of

2730t he parties thereto . §§ 120.569 and 120.57(1), Fl a. Stat.

274239 . Ð[I]t is well established that the legislature has

2752broad discretion in regulating and controlling pari - mutuel

2761wagering and gambling under its police powers.Ñ Div. of Pari -

2772Mutuel Wagering, Dep't of Bus. Reg. v. Fla. Horse Council, Inc. ,

2783464 So. 2d 128, 130 (Fla. 1985). Furthermore, s ection 550.0251,

2794Florida Statutes, provides that Ðthe Division shall administer

2802[chapter 550] and regulate the pari - mutuel industry under

2812[chapter 550].Ñ As such, the Division has the a uthority to

2823regulate and issue permits for summer jai alai pursuant to

2833section 550.0745(1).

2835B. Nature of the Proceeding

284040 . This is a de novo proceeding, intended to formulate

2851final agency action and not to review action taken earlier and

2862preliminaril y. Young v. DepÓt of Cmty. Aff. , 625 So. 2d 831,

2874833 (Fla. 1993); Hamilton Cnty. Bd. of Cnty. Comm'rs v. Dep't of

2886Envtl. Reg. , 587 So. 2d 1378, 1387 (Fla. 1st DCA 1991); McDonald

2898v. DepÓt of Banking & Fin. , 346 So. 2d 569, 584 (Fla. 1st DCA

29121977). S ee also § 120.57(1)(k), Fla. Stat. (ÐAll proceedings

2922conducted under this subsection shall be de novo.Ñ)

2930C . Burden of Proof

293541 . As the party seeking issuance of a license , West

2946Flagler has the burden of proving by a preponderance of evidence

2957that it satisf ies the applicable standards and requirements.

2966Dep't of Banking & Fin. v. Osborne Stern & Co. , 670 So. 2d 932

2980(Fla. 1996) ; see also § 120.57(1)(j) , Fla. Stat. ( Ð Findings of

2992fact shall be based upon a preponderance of the evidence, except

3003in penal or licensure disciplinary proceedings or except as

3012otherwise provided by statute .Ñ) .

3018D . Standing

302142 . The parties stipulated that West Flagler has standing

3031under chapter 120, Florida Statutes, to challenge the denial of

3041its June and July Applications for n ew summer jai alai permits

3053to be located within Miami - Dade County. Furthermore, as the

3064license applicant, West Flagler is a Ðspecifically named

3072person[] whose substantial interests are being determined in the

3081proceeding,Ñ pursuant to section 120.52(13)(a), and thus has

3090standing in this proceeding. Maverick Media Grp. v. DepÓt of

3100Transp. , 791 So. 2d 491, 492 - 493 (Fla. 1st DCA 2001).

3112E . Standards

311543 . Section 550.0745(1) provides, in pertinent part, that:

3124The owner or operator of a pari - mutuel

3133permit who is authorized by the division to

3141conduct pari - mutuel pools on exhibition

3148sports in any county having five or more

3156such pari - mutuel permits and whose mutuel

3164play from the operation of such pari - mutuel

3173pools for the 2 consecutive years next prior

3181to filing an application under this section

3188has had the smallest play or total pool

3196within the county may apply to the division

3204to convert its permit to a permit to conduct

3213a summer jai alai fronton in such county

3221dur ing the summer season commencing on May 1

3230and ending on November 30 of each year on

3239such dates as may be selected by such

3247permittee for the same number of days and

3255performances as are allowed and granted to

3262winter jai alai frontons within such county.

3269If a permittee who is eligible under this

3277section to convert a permit declines to

3284convert, a new permit is hereby made

3291available in that permitteeÓs county to

3297conduct summer jai alai games as provided by

3305this section, notwithstanding mileage and

3310permit ratific ation requirements . . . .

331844 . Section 550.002( 16 ) defines the term Ðhost trackÑ as

3330Ð a track or fronton conducting a live or simulcast race or game

3343that is the subject of an intertrack wager. Ñ

335245 . Section 550.002( 12 ) defines the term Ð guest track Ñ as

3366Ð a track or fronton receiving or accepting an intertrack wager. Ñ

337846 . Section 550.002( 17 ) defines the term Ð intertrack

3389wagerÑ as:

3391a particular form of pari - mutuel wagering in

3400which wagers are accepted at a permitted,

3407in - state track, fronton, or pari - mutu el

3417facility on a race or game transmitted from

3425and performed live at, or simulcast signal

3432rebroadcast from, another in - state pari -

3440mutuel facility.

344247 . Section 550.002(32) de f ines the term ÐsimulcastingÑ

3452as:

3453broadcasting events occurring live at an in -

3461st ate location to an out - of - state location,

3472or receiving at an in - state location events

3481occurring live at an out - of - state location,

3491by the transmittal, retransmittal,

3495reception, and rebroadcast of television or

3501radio signals by wire, cable, satellite,

3507microw ave, or other electrical or electronic

3514means for receiving or rebroadcasting the

3520events.

352148 . Section 550.002( 13 ) defines the term Ð handle Ñ as Ðt he

3536aggregate contributions to pari - mutuel pools. Ñ

354449 . Section 550.3551 (2)(b) describes Ðsimulcast exportÑ

3552w agering as follows :

3557(2) Any horse track, dog track, or fronton

3565licensed under this chapter may transmit

3571broadcasts of races or games conducted at

3578the enclosure of the licensee to locations

3585outside this state.

3588* * *

3591(b) Wagers accepted by any out - of - state

3601pari - mutuel permitholder or licensed betting

3608system on a race broadcasted under this

3615subsection may be, but are not required to

3623be, included in the pari - mutuel pools of the

3633horse track in this state that broadcasts

3640the r ace upon which wagers are accepted.

3648The handle, as referred to in

3654s. 550.0951(3), does not include any wagers

3661accepted by an out - of - state pari - mutuel

3672permitholder or licensed betting system,

3677irrespective of whether such wagers are

3683included in the pari - mutuel pools of the

3692Florida permitholder as authorized by this

3698subsection.

369950 . Section 550.0951(3) provides, in pertinent part, that:

3708TAX ON HANDLE. Ï Each permitholder shall pay

3716a tax on contributions to pari - mutuel pools,

3725the aggregate of w hich is hereinafter

3732referred to as Ðhandle,Ñ on races or games

3741conducted by the permitholder. The tax is

3748imposed daily and is based on the total

3756contributions to all pari - mutuel pools

3763conducted during the daily performance. If

3769a permitholder conducts mor e than one

3776performance daily, the tax is imposed on

3783each performance separately.

378651 . The second sentence of section 550.3351(2)(b) , read in

3796conjunction with section 550.0951(3) , means that any wager made

3805at an out - of - state facility on a Florida event, i .e. , a

3820Ðsimulcast exportÑ wager, is n ot subject to taxation in Florida.

3831Nonetheless, simulcast export wag e rs are part of the total pari -

3844mutuel pool for the Florida pari - mutuel facility at which the

3856event is held . 5 /

3862F . South Florida Racing Association vs. DBPR

387052 . Much of the argument advanced by both parties involves

3881the application of the opinion of the Third District Court of

3892Appeal in Sou th Florida Racing Association v. Department of

3902Business and Professional Regulation, Division of Pari - Mutuel

3911Wa gering , ___ So. 3d ___, 2015 Fla. App. LEXIS 11334 , 2015 WL

39244546935 (Fla. 3d DCA July 29, 2015). In that case, the c ourt

3937was asked to construe section 550.0745 , and the factors to be

3948considered in a determination of which facilities had Ðthe

3957smallest play or total pool within the countyÑ for purposes of

3968converting to or creating a new summer jai alai permit. Prior

3979to the c ourtÓs opinion, t he Division limited its consideration

3990to live wagers and to intertrack wagers placed at guest tracks

4001in the same county as the host track. T hus, t he court

4014summarized the issue before it as follows:

4021[I] f the Ð total pool within the county Ñ

4031includes both live on - track wagers and

4039intertrack wagers then SFRA had the sm allest

4047total pool for two consecutive years, and

4054another summer jai alai permit should be

4061issued. However, if the Ð total pool within

4069the county Ñ includes only those wagers that

4077were physically placed in Miami - Dade County

4085(either live on - track wagers only or live

4094on - track wagers plus intertrack wagers

4101placed at guest tracks within the county),

4108then West Flagler had the lowest total pool,

4116and no permit is available.

412153. The issue of whether simulcast export wagers , i.e.,

4130wagers accepted at out - of - state fa cilities , are to be considered

4144in determining Ðthe smallest play or total pool within the

4154countyÑ was not raised or considered in South Florida Racing

4164Association , and thus remains one of first impression. However,

4173the opinion remains instructive.

417754 . The c ourt analyzed the plain meaning of section

4188550.0745(1) in determining that the factors to be considered in

4198establishing which facility has the smallest play or total pool

4208within the county were necessarily greater than just live wagers

4218and in - county i ntertrack wagers, and concluded that :

4229After pruning out the dependent clauses and

4236the language that is irrelevant to this

4243case, we are left with: "The owner or

4251operator of a pari - mutuel permit . . . whose

4262mutuel play . . . has had the smallest play

4272or tot al pool within the county may apply to

4282the division to convert its [pari - mutuel]

4290permit to a permit to conduct a summer jai

4299alai fronton in such county . . . . Ñ Id.

4310The plain and natural meaning of this

4317simplified sentence is clear: The owner or

4324operato r of a pari - mutuel permit whose

4333mutuel play has the smallest play or total

4341pool as compared to the other pari - mutuel

4350permittees within that same county may apply

4357to convert its permit. The phrase Ð within

4365the county Ñ simply defines the universe of

4373pari - mut uel permittees with which to compare

4382the applicant's total pool; it does not

4389limit the calculation of that applicant's

"4395total pool" to those bets physically within

4402the county. It takes a very strained

4409reading to contort the statutory language

4415into the Div ision's adopted interpretation.

4421Moreover, the term Ð total pool Ñ seems to

4430refer to all monies wagered. Although

4436Ð total pool Ñ is not statutorily defined, the

4445term Ð pari - mutuel wagering pool Ñ is defined

4455to mean Ð the total amount wagered on a race

4465or game for a single possible result. Ñ

4473§ 550.002(24). Nothing in Chapter 550 of

4480the Florida Statutes limits the total pool

4487to solely physical in - county wagers. Thus,

4495we conclude that the Division Ó s

4502interpretation conflicts with the plain

4507meaning of section 550.0745(1). (emphasis

4512added).

4513Id. at 10 - 11.

451855 . Thereafter, the c ourt embarked on an exploration of

4529the legislative history of section 550.0745(1) as further

4537support for its conclusion. However, reliance on tenets of

4546statutory construction, including legislative history, is

4552necessary only if the language of a statut e is unclear or

4564ambiguous. Blinn v. DepÓt of Transp. , 781 So. 2d 1103, 1107

4575(Fla. 1st DCA 2000)(Ð[W]here the language of a statute is clear,

4586the language must be given effect, rather than the purpose or

4597intent indicated by legislative history.Ñ).

460256 . As established by the Third District Court of Appeal :

4614the phrases Ð total pool Ñ and Ð pari - mutuel

4625wagering pool Ñ are used throughout Chap ter

4633550, the pari - mutuel wagering chapter of the

4642Florida Statutes, to discuss the full amount

4649wagered on a particular type of event. Not

4657once in chapter 550 is a distinction made

4665between wagers physically placed within the

4671county and wagers placed remotel y as an

4679intertrack wager for purposes of calculating

4685the Ð total pool. Ñ It is therefore

4693unreasonable to construe this subsection of

4699the statute as placing a limitation on the

4707calculation of the total pool.

4712Id. at 11 - 12.

471757 . In keeping with the c ourtÓs analysis, not once in

4729chapter 550 is a distinction made between wagers placed in

4739Florida and wagers placed at out - of - state facilities for

4751purposes of calculating the Ð total pool. Ñ The evidence

4761unequivocally demonstrated that those out - of - state wagers

4771repo rted by the tote are included in the calculation of the

4783Florida pari - mutuel facilityÓs total pool.

479058 . Though out - of - state wagers are not reported to the

4804DivisionÓs revenue section because they are not subject to

4813Florida taxation, they are reported to the DivisionÓs auditing

4822section on a daily basis .

482859 . T he undersigned concludes that the plain meaning of

4839section 550.0745(1) mandates that simulcast export wagers , as

4847constituting a portion of Ðthe total amount wagered on a race or

4859game for a single p ossible result,Ñ are to be included in the

4873determination of the pari - mutuel facility Ðwhose mutuel play

4883. . . has had the smallest play or total pool within the countyÑ

4897for the relevant consecutive two - year period.

4905G . The June Application

491060 . Based on the foregoing, there was not a summer jai

4922alai permit available in Miami - Dade County for fiscal years

49332012/2013 and 2013/2014 . Including simulcast export wagers as

4942part of the pari - mutuel pool, West Flagler (Magic City Jai Alai)

4955had the smalle st total pool for the 2012/2013 state fiscal year.

4967Summer Jai Alai Partnership had the smallest total pool for the

49782013/2014 state fiscal year. F or the fiscal years 2012/2013 and

49892013/2014 time period, the criteria established in section

4997550.0745(1) for the conversion of a pari - mutuel permit to a

5009permit to conduct a summer jai alai fronton , or for the creation

5021of a new permit to conduct summer jai alai games , have not been

5034met . Thus, the June Application should be denied.

5043H. The July Application

504761 . Based on the foregoing, Summer Jai Alai Partnership

5057had the smallest total pool for the 201 3 /201 4 and 2014/2015

5070state fiscal year s .

507562 . Summer Jai Alai Partnership is the holder of a summer

5087jai alai permit .

5091Conversion of the Summer Jai Alai Partnersh ip Permit

510063 . Summer Jai Alai Partnership had the smallest play or

5111total pool in Miami - Dade County for two consecutive years,

5122triggering section 550.0745(1) and allowing it to Ð apply to the

5133division to convert its permit to a permit to conduct a summer

5145jai alai fronton . Ñ If Summer Jai Alai Partnership was

5156ÐeligibleÑ to convert but chose not to convert, a new permit to

5168conduct summer jai alai games would have been created. 6 /

517964 . The simple definition of the word ÐconvertÑ is :

5190: to change (something) into a different

5197form or so that it can be used in a

5207different way

5209: to change to a different system, method,

5217etc.

5218: to change from one form or use to another

5228Merriam - Webster Dictionary , at http://www.merriam -

5235webster.com. /dictionar y/convert.

523865 . It is well established that :

5246Florida case law contains a plethora of

5253rules and extrinsic aids to guide courts in

5261their efforts to discern legislative intent

5267from ambiguously worded statutes. However,

5272when the language of the statute is

5279clear and unambiguous and conveys a

5285clear and definite meaning, there is

5291no occasion for resorting to the

5297rules of statutory interpretation

5301and construction; the statute must

5306be given its plain and obvious

5312meaning.

5313Holly v. Auld , 450 So. 2d 217, 219 (Fla. 1984) ( quoting A.R.

5326Douglas, Inc. v. McRainey , 137 So. 157, 159 (Fla. 1931) ) ; see

5338also Verizon Bus. Purchasing, LLC v. DepÓt of Rev. , 164 So. 3d

5350806, 809 (Fla. 1st DCA 2015)( Ð To discern legislative intent, a

5362court must look first to the plain and obvious meaning of the

5374statute's text, which may be discerned from a dictionary. If

5384the language of the statute is clear and unambiguous and conveys

5395a clear and definite meaning, a court must apply the unequivocal

5406meaning and not resort to the rules of statutory

5415construction. Ñ) (citations omitted); Fla. Hosp. (Adventist

5422Health) v. Ag. for Health Care Admin. , 823 So. 2d 844, 848 (Fla.

54351st DCA 2002 ) ( Ð If the language of the statute is clear and

5450unambiguous and conveys a clear and definite meaning, the

5459statute should b e given its plain meaning . When necessary, the

5471plain and ordinary meaning of words in a statute can be

5482ascertained by reference to a dictionary. Ñ ) (citations omitted).

549266 . Changing a summer jai alai permit to a summer jai alai

5505permit does not meet the simple and plain definition of the term

5517Ðconvert.Ñ Thus, Summer Jai Alai Partnership could not convert

5526its permit from a permit to conduct a summer jai alai fronton to

5539a pe rmit to conduct a summer jai alai fronton.

5549Profi t ability

555267 . Florida Administrative Code Rule 61D - 4.002(1) provides

5562that:

5563(1) In evaluating a permit application, the

5570division shall deny any application where

5576the applicant fails to establish the

5582following criteria:

5584(a) Financial profitability of the

5589prospective permitholder as derived from the

5595assets and liabilities of the applicant; the

5602existence of any judgment or current

5608litigation, whether civil, criminal, or

5613administrative; the type of pari - mutuel

5620activity to be conducted and desired period

5627of operation; and net income projected over

5634the first three years of operation with the

5642permit . If the applicant is able to show

5651any profitability as outlined in this

5657paragraph, the Division will review the

5663following criteria in paragraph (b).

5668(b) That the issuance of the permit will

5676preserve and protect the pari - mutuel

5683revenues of the state by generating an

5690increase of total state revenue.

569568 . If the profitability of an applicant were to be based

5707s olely on the pari - mutuel jai alai events conduc ted under the

5721permit, then the proposed summer jai alai permit would not meet

5732th e test of profitability established by the rule.

5741Mr. Licciardi agreed that Ðthe jai alai portion of that permit

5752will be a drain and that hopefully youÓd make up with it on

5765cards or slots, something like that.Ñ However, the rule

5774includes no express limitation of the term Ðpari - mutuel

5784activity. Ñ

578669 . Section 849.086(1) , Florida Statutes, provides, in

5794pertinent part, that Ð the Legislature finds that authorized

5803[cardroom] games as herein defined are considered to be pari -

5814mutuel style games .Ñ

581870 . The Division advanced no express argument that

5827profitability is to be measured only against the revenues an d

5838expenses from the races or games conducted under the pari - mutuel

5850license, and not include the revenues and expenses from the

5860cardroom authorized by and operating in concert with the

5869licensed pari - mutuel facility . See § 849.086(5), Fla. Stat.

5880N o such limitation is hereby inferred.

588771 . If Ðpari - mutuel activitiesÑ includes cardroom revenues

5897and expenses as part of the Ð net income projected over the first

5910three years of operation with the permit ,Ñ the preponderance of

5921the evidence indicate s that a new summer jai alai permit as

5933requested under the July Application would meet the test of

5943profitability established in rule 61D - 4.002(1) .

595172 . Likewise, if Ðpari - mutuel activitiesÑ includes

5960cardroom revenues and expenses , the preponderance of the

5968eviden ce indicates that a new summer jai alai permit as

5979requested under the July Application would result in an increase

5989of total state revenue resulting from the taxes and fees

5999realized by the operation of the cardroom .

6007I. Conclusion

600973 . It is concluded that simulcast export wagers form a

6020part of the Ðplay or total pool within the countyÑ as that term

6033is used in section 550.0745(1). Based thereon, there was no

6043single facility with the smallest play or total pool within

6053Miami - Dade Count y for the consecutive 2012/2013 and 2013/2014

6064state fiscal years. Therefore, the June Application should be

6073denied.

607474 . Summer Jai Alai Partnership had the smallest play or

6085total pool within Miami - Dade County for the 2013/2014 and

60962014/2015 state fiscal years. However, since Summer Jai Alai

6105Partnership operates pursuant to a summer jai alai permit, it

6115could not Ðconvert its permit to a permit to conduct a summer

6127jai alai fronton.Ñ (emphasis added) . § 550.0745(1), Fla. Stat.

6137Since Summer Jai Alai Partnership was not Ðeligible under

6146[section 550.0745] section to convert a permit,Ñ a new summer

6157jai alai permit was not created. Therefore, the July

6166Application should be denied.

617075 . If it is determined that Summer Jai Alai Partnership

6181was eligible to convert its summer jai alai permit to a summer

6193jai alai permit , but declined to do so, thus creating a new

6205summer jai alai permit, West Flagler met the requirements of

6215section 550.0745(1) and rule 61D - 4.002 for approval of the July

6227Applica tion.

6229RECOMMENDATION

6230Based on the foregoing Findings of Fact and Conclusions of

6240Law, it is RECOMMENDED that West Flagler Associate, Ltd.Ós ,

6249June 30, 2015 , and July 1, 2015, applications for new summer jai

6261alai permits be DENIED.

6265DONE AND ENTERED this 20th day of June , 201 6 , in

6276Tallahassee, Leon County, Florida.

6280S

6281E. GARY EARLY

6284Administrative Law Judge

6287Division of Administrative Hearings

6291The DeSoto Building

62941230 Apalachee Parkway

6297Tallahassee, Florida 32399 - 3060

6302(850) 488 - 9675

6306Fax Filing (850) 921 - 6847

6312www.doah.state.fl.us

6313Filed with the Clerk of the

6319Division of Administrative Hearings

6323this 20th day of June , 201 6 .

6331ENDNOTES

63321 / T he evidence and argument in this case indicates that the

6345dispute between the parties centers on whether wagers that are

6355not subject to taxation in Florida, i.e., simulcast export

6364wagers, should be included as part of the Ðplay or total pool

6376within the county.Ñ Thus, the term Ð intertrack wager , Ñ as

6387referenced by the parties , is construed encompassing all wagers

6396taxable in Florida, including simulcast and intertrack simulcast

6404wagers. See § 550.002(17) , Fla. Stat.

64102/ There are three totali s ator companies licensed by the state

6422of Florida. The number of totalisators operating worldwide was

6431not disclosed. However, there was no suggestion that any

6440totalisator reporting wagers to Florida facilities is less than

6449reliable or accurate .

64533 / In reviewing the South Florida Racing Association opinion, it

6464is apparent that the Court included simulcast and intertra ck

6474simulcast wagers in its analysis of whether ÐintertrackÑ wagers

6483should be included in the facilityÓs Ðplay or total pool within

6494the county.Ñ Id. at *19 n . 2 . (ÐThe term Òintertrack wagerÓ is

6508statutorily defined and Òmeans a particular form of pari - mutuel

6519wagering in which wagers are accepted at a permitted, in - state

6531track, fronton, or pari - mutuel facility on a race or game

6543transmitted from and performed live at, or simulcast signal

6552rebroadcast from, another in - state pari - mutuel facility.Ó

6562§ 55 0.002(17), Fla. Stat. (2013). When such broadcasts are made

6573to or from facilities in a different state, it is called

6584Òsimulcasting.Ó £ 550.002(32), Fla. Stat. (2013).Ñ).

65904 / West Flagler Associates, Ltd. (Magic City Jai Alai) had the

6602smallest total handl e ($0.00) in Miami - Dade County for the

66142013/2014 state fiscal year , but since it did not operate,

6624despite being licensed, its total was not considered.

66325 / The provision of s ection 550.3351(2)(b) that w agers placed at

6645an out - of - state facility on a race or game simulcast from a

6660Florida pari - mutuel facility Ð may be, but are not required to

6673be Ñ included in the hosting facilityÓs pari - mutuel pool is a

6686recognition that t here are instances when an out - of - state

6699facility may choose to create its own local pool for a Florida

6711race or game , in which case bets placed on the Florida simulcast

6723event are not reported as and do not count towards the Florida

6735pari - mutuel facilityÓs aggregate pari - mutuel pool. Although

6745local pools are allowable, no witness could offer any reason as

6756to why a local pool would be created, as it typically would

6768result in smaller pay - outs on winning wagers.

6777All w agers placed at out - of - state facilities for which

6790information is transmitted by the total i s ator to the Florida

6802pari - mutuel facility are included in the Florida pari - mutuel

6814facili t yÓs total pool.

68196 / The record is silent as to whether Summer Jai Alai

6831Partnership ever affirmatively Ðdecline[d] to convert.Ñ That

6838issue was not addressed by either party. The December 2, 2015 ,

6849notice of proposed agency action regarding the July Application

6858is predicated on the assumption that West Flagler was seeking to

6869convert its own permit to a permit to conduct a summer jai alai

6882fronton. Though the p arties seemed to acknowledge that, if

6892simulcast export wagers were included in the play or total pool ,

6903Summer Jai Alai Partnership would have the smallest play or

6913total pool for state fiscal years 2013/2014 and 2014/2015, there

6923was no evidence to suggest that Summer Jai Alai Partnership was

6934advised of that determination, or that it ever took any action

6945thereon. Thus, this Recommended Order should not be construed

6954as determining whether any necessary condition precedent to the

6963creation of a summer jai alai permit on the part of Summer Jai

6976Alai Partnership was performed.

6980COPIES FURNISHED :

6983John M. Lockwood, Esquire

6987Thomas J. Morton, Esquire

6991The Lockwood Law Firm

6995Suite 810

6997106 East College Avenue

7001Tallahassee, Florida 3230 1

7005(eServed)

7006William D. Hall, Esquire

7010Department of Business and

7014Professional Regulation

7016Office of the General Counsel

7021Suite 40

70231940 North Monroe Street

7027Tallahassee, Florida 32399

7030(eServed)

7031Jonathan Zachem, Director

7034Division of Pari - Mutuel Wagering

7040Department of Business and

7044Professional Regulation

7046Northwood Centre

70481940 North Monroe Street

7052Tallahassee, Florida 32399

7055(eServed)

7056Jason Maine, General Counsel

7060Department of Business and

7064Professional Regulation

7066Capital Commerce Center

70692601 Blair Stone Road

7073Tallahassee, Florida 32309

7076(eServed)

7077NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

7083All parties have the right to submit written exceptions within

709315 days from the date of this Recommended Order. Any exceptions

7104to this Recommended Order should be file d with the agency that

7116will issue the Final Order in this case.

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Proceedings
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Date: 09/16/2016
Proceedings: Agency Final Order
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Date: 09/16/2016
Proceedings: (Agency) Final Order filed.
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Date: 06/20/2016
Proceedings: Recommended Order
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Date: 06/20/2016
Proceedings: Recommended Order (hearing held May 2, 2016). CASE CLOSED.
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Date: 06/20/2016
Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
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Date: 05/23/2016
Proceedings: Respondent's Proposed Recommended Order filed.
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Date: 05/23/2016
Proceedings: West Flagler Associates, Ltd's Proposed Recommended Order filed.
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Proceedings: Transcript of Proceedings (not available for viewing) filed.
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Proceedings: CASE STATUS: Hearing Held.
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Proceedings: Motion for Official Recognition (filed in Case No. 15-006774).
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Case Information

Judge:
E. GARY EARLY
Date Filed:
12/01/2015
Date Assignment:
12/01/2015
Last Docket Entry:
09/16/2016
Location:
Tallahassee, Florida
District:
Northern
Agency:
Other
 

Counsels

Related Florida Statute(s) (10):

Related Florida Rule(s) (1):