08-001085 Department Of Business And Professional Regulation, Division Of Alcoholic Beverages And Tobacco vs. Rick`s Of South Florida, Inc., D/B/A Tubby`s Status: Closed Recommended Order on Thursday, May 29, 2008.

Summary: Department did not provide sufficient proof that gambling occurred in the subject establishment.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Petitioner, )

)

vs. ) Case No. 08-1085

)

RICK’S OF SOUTH FLORIDA, INC., d/b/a TUBBY’S, )

)

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this

case on April 17, 2008, by way of video teleconference, with

sites in Tallahassee and Ft. Myers, Florida, before

Administrative Law Judge R. Bruce McKibben of the Division of

Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Joshua B. Moye, Esquire

Sarah Naf, Qualified Representative

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399-2202

For Respondent: Richard Goulet, pro se

12931 Parkline Drive

Fort Myers, Florida 33913

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent unlawfully

conducted gambling operations at its licensed business

establishment, and, if so, what penalty is warranted.

PRELIMINARY STATEMENT

Petitioner, Department of Business and Professional

Regulation (the "Department"), filed an Administrative Action

against Respondent dated October 27, 2007. The Administrative

Action alleges in pertinent part that Respondent:

[D]id unlawfully on your licensed premises

permit, allow, or possess gambling machines

. . . which upon insertion of any piece of

money . . . is caused to operate such

machines or devises and the user, by reason

of any element of chance or any other

outcome of such operation unpredictable may

receive money, credit, allowance or other of

value. . . .

Upon receipt of the Administrative Action, Respondent disputed

the issues of fact and requested a formal administrative

hearing. At the final hearing, the Department offered exhibits

identified as 1 through 11 into evidence, each of which was

admitted. 1 Respondent offered for admission into evidence one

exhibit, which was accepted. The Department called three

witnesses to testify at the final hearing: Special Agent

Michael Chandler, investigator for the Department; Special Agent

Robert Baggett; and Richard Goulet, representative of

Respondent. Respondent called one witness, Mr. Goulet.

Official recognition was taken of Section 849.12 and Subsections

849.16(1), 849.35(5), and 849.36(4), Florida Statutes (2007). 2

At the close of the final hearing, the parties advised the

undersigned that a transcript of the proceeding would be

ordered. The parties were advised that proposed recommended

orders would be due ten days after the transcript was filed at

DOAH. The transcript was filed on May 2, 2008. The Department

timely submitted a Proposed Recommended Order; Respondent's

Proposed Recommended Order was filed two days late, but each was

duly-considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. The Department is the state agency responsible for,

inter alia , licensing and monitoring businesses licensed under

the Florida Beverage and Tobacco laws. Department headquarters

are in Tallahassee, Florida.

2. Respondent is a duly-licensed business monitored by the

Department. The business, known as Tubby's, is a small bar or

pub that serves alcohol pursuant to its license. The business

has five video games with names such as Stone Age, Cherry

Master, and Haunted House. The games allow customers to

accumulate points as they play. The points are then registered

on a written slip of paper printed by the video game after each

period of play.

3. There are a number of video surveillance cameras in

Tubby's which are used to monitor the hallway, bathroom, and

bartenders. The bar has experienced trouble in the past with

drug deals and installed the cameras to prevent such activities

from re-occurring. One of the video cameras, the one pointed

toward the video game area, was in fact not actually a working

camera according to Tubby's representative. 3

4. On October 19, 2007, two agents employed by the

Department conducted an investigation of Tubby's to ascertain

whether illegal gambling was going on in the establishment.

Special Agent Michael Chandler sat at one of the video machines

and played approximately $5.00 worth of currency. Upon

completion, he had accumulated 4 points as evidenced by a game

slip which printed from the machine. The game slip had the

following information printed on it: "TUBBY'S GAME 1; NO CASH

VALUE; 1/20/07 01:17:37 1404." 4 Chandler gave the slip to the

bartender, and it was placed on a red diary or log kept behind

the bar.

5. When the slip was later recovered by Chandler, his

undercover name (Mike Boone) had been written on the slip. Also

written across the top of the slip were the words, "Not Paid.

Same guy as last night."

6. Special Agent Robert Baggett also played one of the

games. He played $30.00 worth of coins and won 100 points as

indicated on his game slips. 5 Baggett says another patron told

him that he could get actual money for the slips, but that

testimony was not confirmed by non-hearsay evidence.

7. Baggett gave his slips to the bartender and asked what

he could receive for them. This exchange between Baggett and

his counsel at final hearing addressed what happened next:

Q: And did the bartender do anything with

the game slips?

A: He asked me my name, and I gave him my

alias. And he advised me that the scores

will be tabulated at the end of the week,

and that if I got the highest score my name

would be placed on the electronic scoreboard

that hung next to the bar area.

Q: To your understanding, do the game

slips have any value?

A: Based upon my previous education,

training and experience, these points are

redeemable for monetary items. Because we

have conducted several investigations in the

past where we actually were paid out in the

form of bar tabs or actual money.

There was no mention by the bartender of cash payments being

available for the game slips that Baggett acquired at Tubby's.

In fact, in contrast to what Baggett had experienced in other

investigations, this establishment specifically applied earned

points to a non-monetary function, i.e. , listing the winners'

names on a game board.

8. Based on their determination that illegal gambling was

occurring, Chandler and Baggett seized a number of lottery

tickets, a bank bag filled with cash, and the game slips from

the log book. The cash was primarily twenty-dollar bills

wrapped in bundles of $1,000 each for a total of $3,049.00.

Each night, the Automatic Teller Machine (ATM) was replenished

with cash. The register report produced at final hearing by

Respondent clearly indicates a daily deposit of cash into the

ATM. Goulet's testimony that the cash in the bank bag was used

to replenish the ATM on site at Tubby's is credible.

9. The game slips from customers were shredded or

otherwise disposed of at the end of each week because there was

no reason to keep them. This explanation is credible. The

Department’s concern and position that the slips should be

maintained in case some customer questioned his or her point

total is speculative and not supported by the facts.

10. Also confiscated from the establishment by Chandler

and Baggett was a hand-written list of professional football

teams. The list contained the first names or nicknames

of 13 individuals, along with a statement of each player's

record from the prior week. This sheet was obviously

representative of some sort of football pool, but there is no

evidence whatsoever that it was used for gambling purposes or

involved the payment or exchange of money.

11. The video camera in the gaming area of Tubby's was, as

previously discussed, not a working camera. The game area was

purposely set up by Tubby's management to look like a casino

gambling area. This was meant to enhance the enjoyment of

playing the video machines.

12. Goulet testified that Tubby's is an alternative

lifestyle bar and that its clientele is fairly regular, i.e. ,

they see the same people over and over. Due to its location off

the main thoroughfares, there are not a lot of folks who just

drop in to the bar.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding pursuant to Section 120.569 and Subsection 120.57(1),

Florida Statutes.

14. Petitioner has the burden of proving by clear and

convincing evidence the allegations against Respondent.

§ 120.57(1)(h), Fla. Stat.; Department of Banking and Finance,

Division of Securities and Investor Protection v. Osbourne,

Stern and Co. , 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington ,

510 So. 2d 292 (Fla. 1987); Evans Packing Co. v. Department of

Agriculture and Consumer Services , 550 So. 2d 112

(Fla. 1st DCA 1989).

15. Subsection 561.29(1)(a), Florida Statutes, states that

the Division of Alcoholic Beverages and Tobacco may suspend or

revoke a license when the following occurs:

Violation by the licensee or his or her or

its agents, officers, servants, or

employees, on the licensed premises, or

elsewhere while in the scope of employment,

of any of the laws of this state or of the

United States, or violation of any municipal

or county regulation in regard to the hours

of sale, service, or consumption of

alcoholic beverages or license requirements

of special licenses issued under

s. 561.20, or engaging in or permitting

disorderly conduct on the licensed premises,

or permitting another on the licensed

premises to violate any of the laws of this

state or the United States. A conviction of

the licensee or his or her or its agents,

officers, servants, or employees in any

criminal court of any violation as set forth

in this paragraph shall not be considered in

proceedings before the division for

suspension or revocation of a license except

as permitted by chapter 92 or the rules of

evidence.

16. Section 849.16, Florida Statutes, states:

(1) Any machine or device is a slot machine

or device within the provisions of this

chapter if it is one that is adapted for use

in such a way that, as a result of the

insertion of any piece of money, coin, or

other object, such machine or devise is

caused to operate or may be operated and if

the user, by reason of any element of chance

or any other outcome of such operation

unpredictable by him or her, may:

(a) Receive or become entitled to receive

any piece of money, credit, allowance, or

thing of value, or any check, slug, token,

or memorandum, whether of value or

otherwise, which may be exchanged for any

money, credit, allowance or thing of value

or which may be given in trade; or

(b) Secure additional chances or rights to

use such machine, apparatus, or device, even

though it may, in addition to any element of

chance or unpredictable outcome of such

operation, also sell, deliver, or present

some merchandise, indication of weight,

entertainment, or other thing of value. [6]

17. The bulk of the Department’s case relied on

circumstantial evidence to prove the allegations. As stated in

Davis v. State , 90 So. 2d 629, 631 (Fla. 1956):

Circumstantial evidence is proof of certain

facts and circumstances from which the trier

or fact may infer that the ultimate facts in

dispute existed or did not exist. The

conclusion as to the ultimate facts must be

one which in the common experience of man

may reasonably be made on the basis of the

known facts and circumstances.

18. Or, as stated in Procacci Commercial Realty v. DHRS ,

690 So. 2d 603, 608 (Fla. 1st DCA 1997):

The use of an objective standard creates a

requirement to make reasonable inquiry

regarding pertinent facts and applicable

law. In the absence of "direct evidence of

the party's and counsel's state of mind, we

must examine the circumstantial evidence at

hand and ask, objectively, whether an

ordinary person standing in the party's or

counsel's shoes would have prosecuted the

claim." Pelletier v. Zweifel ,

921 F. 2d 1465, 1515 (11th Cir. 1991).

19. Based upon a review of the evidence presented, the

circumstantial evidence was not sufficient to infer that the

ultimate fact (illegal gambling within the establishment)

actually occurred. Furthermore, the ultimate fact is clearly

refuted by the special agent’s own discussions with Tubby's

bartender.

20. The evidence shows that the game slips accrued by

customers when playing the video games were not exchanged for

cash or anything of value. Rather, the "winners" were listed on

a board each week for consideration by other bar patrons.

21. The Department essentially concludes that "if it looks

like gambling, it must be gambling." However, there is no clear

evidence that gambling occurred at Tubby's under the evidence

presented. Petitioner has not met its burden of proof in this

matter.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a final order be entered by the

Department of Business and Professional Regulation finding that

Respondent, Rick's of South Florida, Inc., d/b/a Tubby's, is not

guilty of conducting illegal gambling at its business site.

Based upon the foregoing recommendation, it is further

RECOMMENDED that Exhibits 5, 8, and 10 be returned to

Respondent.

DONE AND ENTERED this 29th day of May, 2008, in

Tallahassee, Leon County, Florida.

R. BRUCE MCKIBBEN

Administrative Law Judge

Division of Administrative 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 Hearings

this 29th day of May, 2008.

ENDNOTES

1/ Exhibits 5, 8, and 10 were physical exhibits (A blue money

bag; A black money bag; and $3,049 in cash, respectively).

These exhibits were retained by Petitioner pending the outcome

of this proceeding.

2/ Unless specifically stated otherwise herein, all references

to Florida Statutes and Florida Administrative Rules shall be to

the 2007 version.

3/ One of the special agents investigating Tubby's said that the

video camera did have an electric wire running to it. However,

there was no evidence that the camera actually worked.

4/ Other game slips confiscated and photographed by Petitioner

contained similar language, i.e. , "TUBY'S [sic] II; FOR

AMUSEMENTS ONLY; YOU WON X POINTS."

5/ Baggett testified that he received "$100" in game slips, but

the slips do not indicate a dollar amount, only a number of

points followed by the words NO CASH VALUE.

6/ This is apparently the statutory language the Department

paraphrased in its Administrative Action document, although the

language in that document is an incomplete recitation of the

Statute.

COPIES FURNISHED :

Richard Goulet

12931 Parkline Drive

Fort Myers, Florida 33913

Joshua B. Moye, Esquire

Sarah Naff

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399-2202

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Cynthia Hill, Director

Division of Alcoholic Beverages

and Tobacco

Department of Business and

Professional Regulation

Northwood Centre

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.