98-004606 Division Of Alcoholic Beverages And Tobacco vs. Personal Investments, Inc., D/B/A Personal Investments Status: Closed Recommended Order on Wednesday, March 31, 1999.

Summary: Petitioner did not prove that Respondent was charging a fee for entry into "promotional game" and did not show the charge was an operation of a lottery within the meaning of Chapter 849, Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, DIVISION )

OF ALCOHOLIC BEVERAGES AND )

TOBACCO, )

)

Petitioner, )

)

vs. ) Case No. 98-4606

)

PERSONAL INVESTMENTS, INC., d/b/a )

PERSONAL INVESTMENTS, )

)

Respondent. )

______________________________________)

RECOMMENDED ORDER

Pursuant to notice this cause came on for formal proceeding

before P. Michael Ruff, a duly-designated Administrative Law

Judge, in Tallahassee, Florida, on December 21, 1998.

APPEARANCES

For Petitioner: Bart Schneider, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

For Respondent: Harold F. X. Purnell, Esquire

215 South Monroe Street, Suite 420

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

The issue to be resolved in this proceeding concerns whether

the Respondent set up, promoted or conducted a lottery for money

or other thing of value in violation of Section 849.09, Florida

Statutes.

PRELIMINARY STATEMENT

This cause arose upon the filing of an amended

administrative action charging that, on August 26, 1998, the

Respondent set up, promoted or conducted a lottery for money or

for anything of value, or attempted to operate, conduct or

advertise a lottery scheme or device contrary to Section 849.09,

Florida Statutes. The Respondent sought to contest the charges

in a formal proceeding which was duly transferred to the Division

of Administrative Hearings and the undersigned Administrative Law

Judge.

The cause came on for hearing as noticed. The Department of

Business and Professional Regulation, Division of Alcoholic

Beverages and Tobacco (Division; Agency) presented the testimony

of Stockton Hess, a corporate officer of the Respondent entity,

and Ronald Lee, an agent with the Division. The Petitioner

introduced into evidence two Exhibits consisting of pictures of a

"game wheel," Exhibits 3 and 4, which consist of a sketch of the

licensed premises from the Division files and a layout depiction

of the Ebro Greyhound Park as it existed on August 26, 1998, the

date in question, and Respondent's Exhibit 5 which is the

Respondent's 1986 application for an alcoholic beverage license.

The exhibits were admitted into evidence. The Respondent also

presented the testimony of Stockton Hess and introduced Exhibits

A, B and C, which were admitted into evidence and which consisted

of a Division training bulletin, an Ebro Dog Track Admissions

Report for August 25, and 26, 1998, and records of the Florida

Department of State regarding a "Bud Bowl '99 promotion." The

parties stipulated that on August 26, 1998, Personal Investments,

Inc., held an alcoholic beverage license no. 77-00008, Series 2-

COP.

Upon conclusion of the hearing, the parties elected to order

a transcript thereof and requested an extended time for

submission of proposed recommended orders. Proposed recommended

orders were timely submitted and have been considered in the

rendition of this Recommended Order.

FINDINGS OF FACT

1. On August 26, 1998, the Respondent, Personal

Investments, Inc., d/b/a Personal Investments (Respondent) held

license no. 77-00008, Series 2-COP, authorizing it to sell

alcoholic beverages. On that date Mr. Stockton Hess was a

corporate officer (Vice President). Mr. Hess was also a

corporate officer of the Washington County Kennel Club, Inc.

( WCKC) on the above date (President).

2. The Respondent is a business regulated by the Department

of Business and Professional Regulation, Division of Alcoholic

Beverages and Tobacco (Division) because it sells alcohol. The

Washington County Kennel Club (Club) is regulated by the same

Department's Division of Pari-mutuel Wagering, because it

operates a pari-mutuel wagering facility at the Ebro Greyhound

Park Dog Track. The Ebro Greyhound Park is owned and operated by

the Club. The Club is in the business of selling pari-mutuel

tickets, programs and tip sheets.

3. Personal Investments, Inc., sold alcohol at its concession

stands and in the lounge and restaurant at Ebro Greyhound Park,

located in Ebro, Washington County, Florida. The Respondent served

as concessionaire for food and beverage services through its

contract with the Club. The Club has held its pari-mutuel wagering

permit and annual pari-mutuel licenses continuously for some forty

years. They authorize greyhound racing operations at the Ebro track

facility.

4. On August 26, 1998, the Club conducted a game promotion at

its greyhound track in which any person entering the facility,

regardless of whether he or she paid an admission fee, was provided

a split-ticket free of charge. One half of the ticket went into a

drum located by the entrance way and the other half of the ticket

was retained by the patron. Located next to the drum, and on the

Club premises, was a wheel which contained representations of prizes

such as t-shirts, magnets, key chains and so forth. Subsequent to

the tenth race a Club employee, the front gate hostess, would draw a

ticket and another employee, the track announcer, would announce the

number drawn. The patron holding the other half of the selected

ticket would then present himself to the front gate hostess to

verify the number. The patron would then spin the wheel and win

whatever prize was reflected at the point where the wheel stopped.

The Club bought the wheel, paid for the prizes and its employees

operated the game in question. Mr. Hess, an officer of both the

Club and the Respondent corporation had knowledge of and

intentionally participated in the running of the above-described

game.

5. On August 26, 1998, a drawing was conducted after the

tenth, twelfth and thirteenth races. No patron responded to the

number called out following the tenth race, but patrons responded

after their announced numbers were called after the twelfth and

thirteenth races. Each of those patrons presented a ticket, spun

the wheel, and each won a T-shirt. The Division offered no evidence

and was unaware, on August 26, 1998, or thereafter, including at

hearing, whether those patrons entered the dog track premises by

paying an admission ticket price.

6. On August 26, 1998, three hundred ninety-one patrons

attended the track. Two hundred eighty-eight of those patrons or

approximately 75% attended the track for free, utilizing free passes

made widely available by the Club throughout its market area. On a

typical racing day or night in excess of 60% to 70% of the patrons

entering the Ebro Greyhound Track facility enter utilizing such free

passes, the availability of which is a matter of fairly common

knowledge in the track's market area.

7. In accordance with the Division of Pari-Mutuel Wagering

requirements, the Club maintains a separate turnstile for patrons

entering daily with free passes from those paying an admission fee.

Respondent's Exhibit B in evidence is a daily report, submitted to

the Division of Pari-Mutuel Wagering, of patrons entering for free

as opposed to those who paid an admission fee, including the report

for August 26, 1998. It was further the Club's policy that any

patron who asks for a free pass at the cashier's window is given one

and permitted to enter the track premises free.

8. On August 26, 1998, Division Agent Lee went to the Ebro

Greyhound Track, paid a $2.00 admission fee, and used his split-

ticket to enter the game promotion. He observed the two patrons who

had each won a T-shirt following the twelfth and thirteenth races.

He made no attempt to obtain a free admission nor did he inquire as

to whether the two patrons who won T-shirts had entered for free.

Agent Lee testified that he was unaware at the time he visited the

greyhound track on that date that the Club owned the track and

conducted the Pari-Mutuel Wagering permit and license, despite the

fact that the Division of Pari-Mutuel Wagering, a part of the same

department, as the Division, was the source of the request to review

the game promotion.

9. Agent Lee thought that the Respondent, Personal

Investments, Inc., was conducting the game promotion. In fact, that

was not the case, the game promotion was conducted solely by the

Club and its employees. Agent Lee testified that on August 26,

1998, as well as on the date of hearing, he had no knowledge or

evidence that any agent, servant or employee of the Respondent had

set up, promoted or conducted the game promotion or a lottery for

money or "other thing of value."

10. Agent Lee also testified that on August 26, 1998, and on

the date of the hearing, he had no knowledge or evidence to offer to

the effect that Personal Investments, Inc., or its agents, servants

or employees attempted to operate, conduct or advertise any lottery

scheme or device.

11. Agent Lee was unaware of Division Training Bulletin 93-18

concerning game promotions. This was a memorandum to all District

Supervisors of each district office of the Division noting that

Section 849.094, Florida Statutes, authorizes game promotions in

which the patron must be present to win, provided that the game

promotion does not require an entry fee, payment or proof of

purchase as a condition for entering the game promotion.

12. Tickets to enter the game promotion are given away without

charge by the Club to any patron attending the facility. It is the

Division's apparent position that, since Agent Lee paid a $2.00

admission fee to the track and thereafter received his game

promotion ticket, that such admission fee constitutes a fee, payment

or proof of purchase required as a condition precedent to entering

into the subject game promotion. Since almost 75% of the patrons

attending the track on the date in question entered free, and since

every person entering the track on that date received, without

charge, a game promotion ticket, the game promotion ticket cannot be

determined to have, as a condition precedent, any fee, payment or

proof of purchase as a condition for entry into the game promotion.

13. The "Bud Bowl '99 Sweepstakes" is a common type of game

promotion used as an exemplar by the Respondent, the rules of which

are depicted in Respondent's Exhibit C, in evidence. That game

promotion is approved by the Florida Department of State pursuant to

its authority in Section 849.094, Florida Statutes. It is a game

promotion in which some but not all participants in fact pay a

purchase price and, as part of the purchase, receive a game

promotion ticket or piece. The rules of the game contained in

Respondent's Exhibit C, reflect that of the 4,429,350, entry forms

made available, approximately half are contained within specially

marked packages of Anheuser-Busch beer products, which can only be

obtained through purchases at stores holding alcoholic beverage

licenses. However, one may also enter the "Bud Bowl '99" contest

without a purchase and thus in accordance with Section

849.094(2)(e), Florida Statutes, the game promotion does not

require, as a condition of entry into it, a fee, payment or proof of

purchase.

13. The Ebro game promotion did not award prizes greater than

$5,000.00. Thus, unlike the "Bud Bowl '99" game promotion, it did

not have to meet applicable requirements for a game promotion

offering prizes in excess of such value, including registration with

the Florida Secretary of State. It did, however, share the same

common requirements as the "Bud Bowl '99" promotion, which is that

any entry fee, payment or proof of purchase as a condition of

entering the game promotion was not required.

14. Mr. Hess, who testified at hearing for the Respondent,

paid $7.48 for a twelve-pack of Anheuser-Busch beer, which contained

a "Bud Bowl '99" sweepstakes game promotion ticket therein. He did

so without that game promotion being in violation of Section

849.094, Florida Statutes, as determined by the Secretary of State

in registration of that promotion. Similarly, Agenct Lee paid $2.00

to enter the Ebro Greyhound Track, and in doing so acquired no more

or no less right and opportunity to participate in the Ebro game

promotion than did the majority of patrons who entered without

having to pay an admission fee.

15. The rules of the "Bud Bowl '99" sweepstakes game

promotion submitted to or approved by the Department of State

clearly reflect that approximately 50% of entry fees would be

contained within Anheuser-Busch product packages which can only

be obtained by purchase. The remaining 50% of the entries were

made available without a purchase requirement.

CONCLUSIONS OF LAW

The Division of Administrative Hearings has jurisdiction

over the subject matter of and the parties hereto. Section

120.57(1), Florida Statutes.

16. The Division's amended administrative action contains

one count. It asserts as follows:

On August 26, 1998, you, Personal

Investments, Inc., d/b/a Personal

Investments, your agent(s), servant(s), or

employee(s), did set up, promote, or conduct

any lottery for money or for anything of

value or did attempt to operate, conduct, or

advertise any lottery scheme or device,

contrary to Section 849.09, Florida Statutes.

17. The evidence reflected that WCKC, the pari-mutuel

wagering permit holder and licensee, conducted the game

promotion. Stockton Hess, an officer and director of WCKC,

testified that WCKC alone conducted the game promotion, that WCKC

purchased the prizes awarded, that only WCKC employees were

involved in the drawing, and that Personal Investments had

absolutely nothing to do with the game promotion. While Stockton

Hess is also an officer of Personal Investments, he testified

without contradiction that he was acting solely and exclusively

on behalf of WCKC in all matters connected with the game

promotions.

18. Agent Lee testified that he had no knowledge or

evidence that any agent, servant, or employee of Personal

Investments did, on August 26, 1998, set up, promote, or conduct

any lottery for money or other thing of value. Agent Lee further

had no knowledge or evidence that Personal Investments or any

agent, servant or employee of such entity on August 26, 1998,

attempted to operate, conduct, or advertise a lottery scheme or

device.

19. The Division has failed to establish by clear and

convincing evidence that Personal Investments violated the

provisions of Section 849.09, Florida Statutes, as alleged in

Count One of the amended administrative action.

20. It is unnecessary to determine whether the purported

violation occurred on the licensed premises, since the Division

has not charged Personal Investments in its amended

administrative action, with permitting another party, while on

the licensed premises, to violate Section 849.09, Florida

Statutes.

21. Even if the Division had such a charge in its

administrative action, it would necessarily fail. Section

849.09, Florida Statutes, is the game promotion statute. Game

promotions within the purview of this statute do not constitute

gambling and are not in violation of Chapter 849, Florida

Statutes, including Section 849.09, Florida Statutes. Section

849.094, Florida Statutes, provides in pertinent part:

(1) As used in this section, the term:

(a) "Game promotion" means, but is not

limited to, a contest, game or chance, or

gift enterprise, conducted within or

throughout the state and other states in

connection with the sale of consumer products

or services, and in which the elements of

chance and prize are present. . .

(b) "Operator" means any person, firm,

corporation, or association or agent or

employee thereof who promotes, operates, or

conducts a game promotion, except any

charitable nonprofit organization.

(2) It is unlawful for any operator:

(a) To design, engage in, promote, or conduct

such a game promotion, in connection with the

promotion or sale of consumer products or

services, wherein the winner may be

predetermined or the game may be manipulated

or rigged so as to:

1. Allocate a winning game or any portion

thereof to certain lessees, agents, or

franchises; or

2. Allocate a winning game or part thereof

to a particular period of the game promotion

or to a particular geographic area;

(b) Arbitrarily to remove, disqualify,

disallow, or reject any entry;

(c) To print, publish, or circulate

literature or advertising material used in

connection with such game promotions which is

false, deceptive, or misleading; or

(e) To require an entry fee, payment, or

proof of purchase as a condition of entering

a game promotion.

22. WCKC sells consumer products and services. It is in

the entertainment and recreation business, and sells pari-mutuel

wagering tickets, programs and race sheets to the ultimate

consumer for their personal enjoyment and entertainment.

23. In Beasley Broadcasting v. Department of State , 693

So. 2d 668, 670 (Fla. 2d DCA 1997) the court noted, relative to

Florida Statute, Section 849.094:

Although this statute was enacted twenty-five

years ago, there are no regulations

concerning this statute in the Florida

Administrative Code, and there is no case law

interpreting these provisions. 'Consumer

products or services' are not defined in this

statute. Most definitions of consumer

products or services, however, limit this

concept to property or services which are

normally used for personal , family, or

household purposes . See e.g., Consumer

Products Safety act, 15 U.S.C. Section

2052(a)(1)(1993); Magnuson-Moss Warranty Act,

15 U.S.C. Section 2301(1)(1992); Florida

Telemarketing Act, Section 501.603(3), Fa.

Stat. (1995). (e.s.)

24. The cited definition in the Consumer Product Safety

Act, 15 U.S.C. Section 2052(a)(1) includes products sold to the

consumer for use in "recreation" or for the "personal use . . .

or enjoyment of a consumer . . . in recreation or otherwise."

25. Clearly, WCKC sells consumer products and services

within the purview of Section 849.094, Florida Statutes.

26. As Division Training Bulletin 93-18 notes, Section

849.094, Florida Statutes, superceded the 1939 decision of the

Florida Supreme Court in Little River Theater Corp. v. State ex

rel Hodge , 185 So. 855 (Fla. 1939). The Little River decision

held that improper gambling consisted of the award of a prize by

chance for consideration and that the element of consideration

was satisfied because the game promotion conducted by Little

River Theater advertised the theater, increased the attendance

and materially enhanced the receipts. Since this is precisely

what game promotions are designed to do, the legislature, through

its enactment of Section 849.094, Florida Statutes, limited the

impermissible element of consideration to requiring "an entry

fee, payment or proof of purchase as condition of entering the

game promotion." See Section 849.094(2)(e), Florida Statutes.

27. As the Division's own Training Bulletin 93-18 notes,

Section 849.094, Florida Statutes, does not prohibit the

requirement that a person be present to win a game promotion.

The prohibition instead is that there cannot be an entry fee,

payment or proof of purchase which is imposed as a "condition" of

entering the game promotion.

28. As the state-approved "Bud Bowl '99" sweepstakes game

promotion reflects, the mere fact that some persons may purchase

a product that includes a game piece does not transgress Section

849.094, Florida Statutes, where there are alternative means of

entering the game promotion which do not require a payment.

29. The Division asserts that there were no posted r ules

for the very simple and straightforward game promotion conducted

by Ebro Greyhound track. The technical requirement of Section

849.094, Florida Statutes, however, only requires the posting of

such rules when prizes awarded in the game promotion are greater

than $5,000.00. See Section 849.094(3), Florida Statutes, and 16

Fla. Jur. 2d 369, Criminal Law Section 4448, wherein it is noted:

With respect to operators of game promotions

offering prizes in excess of $5,000.00, the

statute imposes requirements with respect to

the filing, posting, and publication of game

rules and regulations . . ."

30. The Division may assert that Section 849.094(10),

Florida Statutes, is somehow applicable to this matter. This

subsection has provided since 1971 that:

This section does not apply to actions or

transactions regulated by the Department of

Business and Professional Regulation . . .

It is noteworthy that this section refers only to "actions or

transactions" regulated by the Department, not to persons or

entities regulated by the Department. It is clear this provision

does not apply to the instant game promotion. Neither the

Division nor the Department regulate game promotions. It is a

game promotion that is the action or transaction referred to in

the amended administrative action. Agent Lee testified that he

was unaware of any requirement of either the Division of Pari-

mutuel Wagering or of the Division of Alcoholic Beverages and

Tobacco, both Divisions within the Department of Business and

Professional Regulation, which require submission or approval of

a game promotion prior to being conducted. Indeed, the sole

reference to sweepstakes, drawings or contests in the Division of

Alcoholic Beverages and Tobacco's rules is found within

Rule 61A-1.010, Florida Administrative Code, and its adopted

chart which provides in pertinent part:

Section 849.094, Florida Statutes, which is

administered by the Department of State ,

Division of Licensing, The Capital, MS #4,

Tallahassee, Florida 32399-0250, requires

registration of consumer games where prizes

are awarded in excess of $5,000.00. (e.s.)

31. Further, the Division's amended administrative action

in this matter asserts only a violation of Section 849.09,

Florida Statutes, a gambling statute, and not any statute or rule

administered by the Department of Business and Professional

Regulation or any of its Divisions concerning the regulation of

game promotions.

RECOMMENDATION

Having considered the foregoing Findings of Fact,

Conclusions of Law, the evidence of record and the pleadings and

argument of the parties, it is

RECOMMENDED:

That the Department of Business and Professional Regulation,

Division of Alcoholic Beverages and Tobacco enter a final order

dismissing the amended administrative action against Personal

Investments, Inc.

DONE AND ENTERED this 31st day of March, 1999, in

Tallahassee, Leon County, Florida.

P. MICHAEL RUFF

Administrative Law Judge

Division of Admini strative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearin gs

this 31st day of March, 1999.

COPIES FURNISHED:

Harold F. X. Purnell, Esquire

210 South Monroe Street, Suite 420

Tallahassee, Florida 32301

Bart Schneider, Esquire

Department of Business and

Profession Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

Deborah R. Miller, Director

Division of Alcoholic Beverages

And Tobacco

Department of Business and

Profession Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

Lynda Goodgame, General Counsel

Department of Business and

Profession Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-1007

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.