97-000031 St. Petersburg Kennel Club, Inc. vs. Division Of Pari-Mutuel Wagering Status: Closed Recommended Order on Tuesday, August 5, 1997.

Summary: Big Poker 21, Sure 2 Win and FL 21 are not "poker" under statute and should not be approved for play in licensed cardroom.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ST. PETERSBURG KENNEL CLUB, )

)

Petitioner, )

)

vs. ) Case Nos. 97-0031

) 97-0376

DEPARTMENT OF BUSINESS AND ) 97-1667

PROFESSIONAL REGULATION, )

DIVISION OF PARI-MUTUEL )

WAGERING, )

)

Respondent. )

______________________________)

RECOMMENDED ORDER

On April 11, 1997, a formal administrative hearing was held

in this case in Tallahassee, Florida, before J. Lawrence

Johnston, Administrative Law Judge, Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Underwood, Purnell

and Hoffman

Post Office Box 551

215 South Monroe Street, Suite 420

Tallahassee, Florida 32302-0551

For Respondent: Miriam S. Wilkinson, Esquire

Department of Business and Professional

Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1036

STATEMENT OF THE ISSUES

The issues in this case are whether Big Poker Twenty-One,

Sure 2 Win, and Florida Twenty-One are authorized games of poker

under Sections 849.085(2)(a) and 849.086(2)(a), Florida Statutes

(Supp. 1996).

PRELIMINARY STATEMENT

The Petitioner, the St. Petersburg Kennel Club, applied to

the Respondent, the Department of Business and Professional

Regulation, Division of Pari-Mutuel Wagering (the Division), for

approval of Big Poker Twenty-One, Sure 2 Win, and Florida Twenty-

One as authorized games of poker. (Other requests for approval

and other issues also raised by the Petitioner were resolved.)

The requests for approval were denied on December 3, 1996,

January 2, 1997, and February 14, 1997, respectively. The

Petitioner timely requested formal administrative proceedings

under Sections 120.569 and 120.57(1), Florida Statutes (Supp.

1996), and the matters were referred to the Division of

Administrative Hearings (DOAH) as follows: Big Poker Twenty-One

was referred on January 6, 1997, and assigned DOAH Case No.

97-0031; Sure 2 Win was referred on January 27, 1997, and

assigned DOAH Case No. 97-0376; Florida Twenty-One was referred

on April 1, 1997, and assigned DOAH Case No. 97-1667. The three

cases were consolidated for final hearing.

At final hearing, the Petitioner called four witnesses:

Steven Hlas, Secretary/Treasurer, St. Petersburg Kennel Club;

Terry Fortino, General Partner, Aces Up Poker Consultants; Ken

Kosloski; and Steve Fox, an expert witness in the game of poker.

Petitioner also had 12 exhibits admitted in evidence:

Petitioner’s Exhibit #1: License to conduct card rooms

at St. Petersburg Kennel Club

Petitioner’s Exhibit #2: Application form for Sure 2

Win

Petitioner’s Exhibit #3: Application form for Big

Poker Twenty-one

Petitioner’s Exhibit #4: Application form for Florida

Twenty-One

Petitioner’s Exhibit #5: Denial letter for Sure 2 Win

Petitioner’s Exhibit #6: Denial letter for Big Poker

Twenty-one

Petitioner’s Exhibit #7: Denial letter for Florida

Twenty-One

Petitioner’s Exhibit #8: Sure 2 Win videotape

Petitioner’s Exhibit #9: Big Poker Twenty-One

videotape

Petitioner’s Exhibit #10: Florida Twenty-One videotape

Petitioner’s Exhibit #11: Excerpts from Hoyle’s modern

Encyclopedia of Card Games

Petitioner’s Exhibit #12: Request for approval of card

games for Hollywood 2/3 Flash and Hollywood 4/3 Flash

The Respondent called two witnesses: Ken Kosloski, the cardroom

administrator; and I. Nelson Rose, Esquire, an expert in the

field of poker. Additionally, the Respondent had two exhibits

admitted in evidence:

Respondent’s Exhibit #1: July, 1996, letter from Steve

Fox to Deborah R. Miller, Director, Division of Pari-

Mutuel Wagering, with suggested guidelines for

defining poker

Respondent’s Exhibit #2: Respondent’s proposed rule

61D-11.026

After presentation of the evidence, a transcript of the

final hearing was ordered, and the parties asked for and were

given 15 days from the filing of the transcript in which to file

proposed recommended orders. After being confused with copies,

the original transcript was not filed until June 3, and the

parties’ proposed recommended orders were filed on June 6, 1997.

In a separate proceeding filed on April 30, 1997, the

Petitioner challenged the validity of the Division’s proposed

rule definition of “poker.” That proceeding was assigned DOAH

Case No. 97-2080RP. In lieu of a formal administrative hearing,

Case No. 97-2080RP was submitted for determination on proposed

final orders based upon the evidentiary record created in this

case. Proposed final orders were filed on July 24 and 25, 1997,

and a separate final order will be entered in that case.

FINDINGS OF FACT

Rule 61D-11.002(2)(a) and the Incipient Policy

1. 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).

2. 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 ).

3. 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 .

4. 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.

5. 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.

The Requests and Denials

6. 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.

7. On or about December 19, 1996, the Petitioner submitted

a request for approval Sure 2 Win. The Division denied approval

on January 2, 1997.

8. 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.

9. 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.

10. 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.

11. 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).

12. 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

13. Notice of a rule workshop regarding the definition of

poker was published in December 1996, and a workshop was held in

January, 1997.

14. 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 has 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.

15. On March 18, 1997, the Division proposed a rule to

reflect its incipient policy regarding the elements of poker on

which Sure 2 Win, Big Poker 21, and Florida Twenty-One were

denied, and on which other games were approved.

Standard Poker

16. 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; each

player has an opportunity to bet on the cards which comprise the

player’s hand; and there are one or more betting rounds.

17. 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.

18. The game of poker is an American invention whose rules

have been fairly standardized for almost a century.

19. 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.

20. 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.

21. 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.

22. 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

23. 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.”

24. 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.

25. In his July 1996 materials Fox suggested that the

Division consider the traditional poker ranking system of cards,

in order 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 .

26. 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 .

27. At final hearing, 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.”

28. 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.

29. Fox was paid by the Petitioner to provide expert

testimony on its behalf at the hearing in the case at bar. Fox

was not paid by the Petitioner for his proposed revisions and

definition of poker submitted to the Division in July 1996.

Dealer’s Choice Games

30. 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.

31. 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.

32. It was reasonable for the Division to want to narrow

the definition of “poker” through its incipient policy and

proposed rule. If all of the homestyle dealer’s choice poker

games described in Hoyle’s (and games like them) were authorized,

there would in effect be no definition of poker at all; whatever

a dealer called poker would be poker.

Big Poker Twenty-One and Florida Twenty-One

33. Big Poker Twenty-One 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.

34. The object of both Big Poker Twenty-One 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.”

35. Big Poker Twenty-One 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.

36. Big Poker Twenty-One 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.

37. There is no possibility of bluffing in Big Poker

Twenty-One since players make their bets before they view their

cards.

38. It was reasonable for the Division to decide that

neither Big Poker Twenty-One nor Florida Twenty-One are poker.

Instead, they 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.

Sure 2 Win

39. The five-card hand, or “showdown” portion, of Sure 2

Win 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.

40. 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.

41. 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.

42. It was reasonable for the Division to decide that Sure

2 Win is not poker. The five-card showdown portion of the game

is strictly a game of chance, and the winner cannot play the

second, seven-card portion.

CONCLUSIONS OF LAW

43. Section 849.086(2)(a), Florida Statutes (Supp. 1996),

defines authorized games as “those games authorized by s.

849.085(2)(a) and which are played in a non-banking manner.”

44. Section 849.085(2)(a), Florida Statutes (1995),

authorizes “Penny-ante games” and defines them as follows:

“Penny-ante game” means a game or series of games of

poker, pinochle, bridge, rummy, canasta, hearts,

dominos, or mah-jongg in which the winnings of any

player in a single round, hand, or game do not exceed

$10 in value.

45. Florida Administrative Code Rule 61D-11.002 requires

all card games be approved by the Division and provides in

pertinent part:

(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.

46. As found, Hoyle’s includes many games besides poker.

It would appear that Florida Administrative Code Rule 61D-

11.002(2)(a), as written, contemplated the approval of all poker

games in Hoyle’s , so long as they are played in a non-banking

manner. The Petitioner argues that, because its proposed games

are similar to dealer’s choice poker games in Hoyle’s , the

Division should approve them. However, the preliminary denials

in this case reflect the Division’s incipient policy to require a

game to use the standard poker card and hand rankings and afford

players the opportunity to bluff after seeing their hands in

order to be considered “poker.” Even if the Division’s approvals

of Hollywood 2-3 Flash, Hollywood 4-3 Flash, and Three-Card Stud

on January 10, 1997, were contrary to the Division’s incipient

policy, raising a question as to how definite and firm the policy

was at that time, it clearly has become the agency’s incipient

policy. As found, after the preliminary denials, the Division

proposed a rule to promulgate this incipient policy. Under the

incipient policy and proposed rule, the Petitioner’s proposed

games, as well as some of the poker games described in Hoyle’s

(in particular several of the “dealer’s choice” games) would not

be authorized.

47. As found, it was reasonable for the Division to want to

narrow the definition of “poker.” If all of the dealer’s choice

poker games described in Hoyle’s (and games like them) were

authorized, there would in effect be no definition at all;

whatever a dealer might call poker would be poker. Such a result

would not be reasonable.

48. The Division’s incipient policy was supported by

competent substantial evidence presented at final hearing.

Although it would eliminate many dealer’s choice games in

Hoyle’s , it incorporates the characteristics of standard poker

described in Hoyle’s . It also is supported by expert testimony

as to the characteristics of standard poker. See St. Francis

Hospital, Inc., v. Dept. of Health, etc. , 553 So. 2d 1351, 1354

(Fla. 1st DCA 1989). (The validity of the Division’s proposed

rule incorporating the incipient policy will be determined in

Case No. 97-2080RP.)

49. As found, regardless of the Division’s incipient

policy and proposed rule, it was reasonable for the Division to

decide that neither Big Poker 21 nor Florida Twenty-One are

poker. Instead, they are variations of the game of Black Jack,

or “21.”

50. As found, regardless of the Division’s incipient policy

and proposed rule, it was reasonable for the Division to decide

that Sure 2 Win is not poker. The five-card showdown portion of

the game is strictly a game of chance, and the winner cannot play

the second, seven-card portion.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Respondent, the Department of Business

and Professional Regulation, Division of Pari-Mutuel Wagering

enter a final order denying approval of Big Poker Twenty-One,

Sure 2 Win, and Florida Twenty-One as authorized games of poker

under Sections 849.085(2)(a) and 849.086(2)(a), Florida Statutes

(Supp. 1996).

RECOMMENDED this 5th day of August, 1997, at Tallahassee,

Leon County, Florida.

___________________________________

J. LAWRENCE JOHNSTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax FILING [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 5th day of August, 1997.

COPIES FURNISHED:

Miriam S. Wilkinson, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Underwood,

Purnell and Hoffman

215 South Monroe Street, Suite 420

Tallahassee, Florida 32301-1841

Deborah R. Miller, Director

Division of Pari-Mutuel Wagering

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

Lynda L. Goodgame

General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

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

this Recommended Order should be filed with the agency that will

issue the final order in this case.