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.

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.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WEST FLAGLER ASSOCIATES, LTD.,

Petitioner ,

vs. Case No s . 1 5 - 6773

15 - 6774

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - MUTUEL

WAGERING ,

Respondent .

/

RECOMMENDED ORDER

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

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

assigned by the Division of Administrative Hearings.

APPEARANCES

For Petitioner: John M. Lockwood, Esquire

Thomas J. Morton, Esquire

The Lockwood Law Firm

Suite 810

106 East College Avenue

Talla hassee, Florida 32301

For Respondent: William D. Hall, Esquire

Department of Business and

Professional Regulation

Office of the General Counsel

Suite 40

1940 North Mo nroe Street

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

W hether the Department of Business and Professional

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

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

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

applications for new summer jai alai permits under section

550.0745, Florida Statutes.

PRELIMINARY STATEMENT

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

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

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

mutuel permitholder for consecutive fiscal years 2012/2013 and

2013/2014 (the ÐJune ApplicationÑ) . On August 4, 2015, West

Flagler timely filed a Petition for Administrative Hearin g

challenging the DivisionÓs notice of denial. That case was

identified as DBPR Case No. 2015 - 030305.

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

West FlaglerÓs application for a summer jai - alai permit pursuant

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

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

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

Flagler timely filed a Petition for Administrative Hearing

challenging the DivisionÓs notice of denial. That case was

identified as DBPR Case No. 2015 - 030307.

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

Division of Administrative Hearings for formal administrative

h earing s .

On December 8, 2015, pursuant to West FlaglerÓs unopposed

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

scheduled for January 25, 2016 .

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

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

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

petitions for administrative hearing . The motion was granted,

the amended pleadings were filed, and the hearing was

rescheduled for April 12, 2016 . After a further meritorious

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

May 2, 2016.

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

Stipulation in which they identified stipulated facts for which

no further proof would be necessary. The stipulated facts have

been accepted and considered in the preparation of this

Recommended Order.

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

Joint Exhibits 1 through 6 were received in evidence by

stipulation of the parties.

West Flagler called as its witness , Da niel Joseph

Licciardi , a jai - a lai construction consultant for Southwest

Florida Enterprises, West FlaglerÓs parent company, and the

director of pari - mutuel operations for Dania Entertainm ent,

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

were received in evidence. PetitionerÓs Exhibit 7 is the

deposition transcript of Tracy Swain , the designated agency

representative pursuant to Florida Rule of Civil Procedure

1.3 10 (b)(6). PetitionerÓs Exhibits 5 and 6 are , respectively,

the deposition transcript s of Joe Dillmore , the DivisionÓs

Deputy Director; and Jamie Pouncey , the DivisionÓs Senior

Management Analyst II/Permitholder Administrator. By

stipulation of the parties, the deposition transcripts have been

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

evidentiary weight as if the deponents testified at the final

hearing.

The Division called as its witness , Tracy Swain, the

DivisionÓs Revenue Program Administrator. RespondentÓs

Exhibit s 1 through 3 were received in evidence.

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

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

Recommended O rders which have been duly considered by the

undersigned in the preparation of this Recommended Order.

Petitioner's application fo r licensure is governed by the

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

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

1st DCA 199 3 ). Therefore, all references to the Florida

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

indicated.

FINDINGS OF FACT

1. The Division is the state agency charged with

regulating pari - mutuel wagering activities in Florida pursuant

to chapter 550.

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

authorized to conduct pari - mutuel pools on exhibition sports in

Miami - Dade County pursuant to chapter 550.

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

pools on exhibition sports in Miami - Dade County. The

permitholders are South Florida Racin g Association, LLC ( Hialeah

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

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

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

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

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

jai alai permit.

5 . West Flagler currently possesses a summer jai alai

permit in Miami - Dade County.

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

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

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

June Application was based on its conclusion that a new summer

jai alai permit was available because SFRA had the smallest

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

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

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

permit to conduct summer jai alai.

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

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

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

July Application was based on its conclusion that a new summer

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

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

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

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

mutuel permit to a permit to conduct summer jai alai.

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

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

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

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

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

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

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

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

denial remains the position of the Division in this proceeding.

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

notice of denial that modified the denial of the July

Application from one based on there being no lowest handling

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

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

is incapable of converting its summer jai alai permit to a

summer jai alai permit because there would not be an actual

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

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

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

generate an increase in total state revenue over the revenue

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

10 . West FlaglerÓs June Application does not seek to

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

permit. Rather, the application is predicated upon the creation

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

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

fronton .

11 . West FlaglerÓs July Application does not seek to

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

permit. Rather, the application is predicated upon the creation

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

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

fronton.

12 . The disagreement between the parties regarding the

June Application revolves around whether Ðsimulcast exportÑ

wagers should be included in calculating a permitholderÓs Ðplay

or total pool within the countyÑ for purposes of section

550.0745(1). The Division argues that a permitholderÓs total

pool includes live wagers, in tertrack wagers, and simulcast

export wagers. West Flagler argues that a permitholderÓs total

pool includes only live wagers and intertrack wagers. 1 /

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

Florida facility on a race or game performed live at that

facility. Permitholders derive income, in the form of a

commission, on live wagers placed at their facilities.

Permitholders pay taxes on live wag ers.

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

Florida facility on a race or game transmitted from and

performed live at, or simulcast rebroadcast from, another

permitted Florida facility. Permitholders derive income, in the

form of a commission, on wagers placed at other Florida

facilities on races or games transmitted from the permitholderÓs

facilities . Permitholders pay taxes on intertrack wagers.

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

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

facility. Permitholders pay taxes on simulcast wagers.

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

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

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

t ransmitted by the Florida host track to the Florida guest

track. Permitholders pay taxes on intertrack simulcast wagers.

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

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

permitted Florida facility. Permitholders derive income, in the

form of a commission, on simulcast export wagers accepted by

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

permitholderÓs facil ities . The Division does not know the

commission structure between the permitholders and out - of - state

facilit ies .

18 . Permitholders do not pay taxes on simulcast export

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

wagers.

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

wagers, and intertrack simulcast wagers are those place d at

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

S imulcast export wagers are those placed on Florida events at

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

20 . Licensed betting facilities across the country -- and

generally across the world -- contract with a licensed

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

Data on all w agers placed on a hosting permitholderÓs event

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

receiving a hosting permitholderÓs simulcast broadcast forms its

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

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

on winning wagers.

21 . The totes also capture simulcast export wagers for use

in calculating the commission paid by the guest tracks.

22 . A permitholderÓs pool amounts a re reported to the

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

report includes live, simulcast, intertrack, intertrack

simulcast, and simulcast export wagers.

23 . The daily tote reports are reviewed by the DivisionÓs

auditing section to ensure that wagers are accounted for and

paid.

24 . The Division maintains a central monitoring system by

which it captures the daily amounts for all wagers from the

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

report.

25 . A permitholderÓs pool amounts are also reported to the

Division directly by the permitholder in monthly pari - mutuel

reports, and annual financial statements. The monthly reports

and annual financial statements are reviewed by the DivisionÓs

revenue section.

26 . Since simulcast export wagers are not taxed by

Florida, the DivisionÓs monthly report and annual financial

statement forms do not include simulcast export wagers as part

of the facilityÓs handle.

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

credits available for net operating losses, jai alai facilities

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

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

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

license fees and 15 - percent admission tax required by section

550.0951.

28 . The parties stipulated that the Third District Court

of Appeal considered only live wagers and intertrack wagers in

its analysis of whether the Ðsmallest play or total pool within

the countyÑ included only wagers physically placed within Miami -

Dade County , as reflected in the CourtÓs opinion in South

Florida Racing Association v. D epartment of Business and

Professional Regulation , Division of Pari - Mutuel Wagering ,

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

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

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

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

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

2012/2013 state fiscal year.

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

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

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

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

state fiscal year.

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

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

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

2013/2014 state fiscal year.

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

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

Summer Jai Alai Partnership had the smallest tot al handle in

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

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

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

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

2014/2015 state fiscal year.

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

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

Summer Jai Alai Partnership had the smallest total handle in

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

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

wagers are included in the calculation of facilitiesÓ Ðplay or

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

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

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

2014/2015 state fiscal years.

36 . The Division did not notify West Flagler of any

apparent errors or omissions in its July Application.

37 . The Division did not request that West Flagler provide

any additional information with its July Application.

CONCLUSIONS OF LAW

A. Authority

38 . The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

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

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

broad discretion in regulating and controlling pari - mutuel

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

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

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

Florida Statutes, provides that Ðthe Division shall administer

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

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

regulate and issue permits for summer jai alai pursuant to

section 550.0745(1).

B. Nature of the Proceeding

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

final agency action and not to review action taken earlier and

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

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

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

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

1977). S ee also § 120.57(1)(k), Fla. Stat. (ÐAll proceedings

conducted under this subsection shall be de novo.Ñ)

C . Burden of Proof

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

Flagler has the burden of proving by a preponderance of evidence

that it satisf ies the applicable standards and requirements.

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

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

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

in penal or licensure disciplinary proceedings or except as

otherwise provided by statute .Ñ) .

D . Standing

42 . The parties stipulated that West Flagler has standing

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

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

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

license applicant, West Flagler is a Ðspecifically named

person[] whose substantial interests are being determined in the

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

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

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

E . Standards

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

The owner or operator of a pari - mutuel

permit who is authorized by the division to

conduct pari - mutuel pools on exhibition

sports in any county having five or more

such pari - mutuel permits and whose mutuel

play from the operation of such pari - mutuel

pools for the 2 consecutive years next prior

to filing an application under this section

has had the smallest play or total pool

within the county may apply to the division

to convert its permit to a permit to conduct

a summer jai alai fronton in such county

dur ing the summer season commencing on May 1

and ending on November 30 of each year on

such dates as may be selected by such

permittee for the same number of days and

performances as are allowed and granted to

winter jai alai frontons within such county.

If a permittee who is eligible under this

section to convert a permit declines to

convert, a new permit is hereby made

available in that permitteeÓs county to

conduct summer jai alai games as provided by

this section, notwithstanding mileage and

permit ratific ation requirements . . . .

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

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

that is the subject of an intertrack wager. Ñ

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

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

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

wagerÑ as:

a particular form of pari - mutuel wagering in

which wagers are accepted at a permitted,

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

facility on a race or game transmitted from

and performed live at, or simulcast signal

rebroadcast from, another in - state pari -

mutuel facility.

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

as:

broadcasting events occurring live at an in -

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

or receiving at an in - state location events

occurring live at an out - of - state location,

by the transmittal, retransmittal,

reception, and rebroadcast of television or

radio signals by wire, cable, satellite,

microw ave, or other electrical or electronic

means for receiving or rebroadcasting the

events.

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

aggregate contributions to pari - mutuel pools. Ñ

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

w agering as follows :

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

licensed under this chapter may transmit

broadcasts of races or games conducted at

the enclosure of the licensee to locations

outside this state.

* * *

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

pari - mutuel permitholder or licensed betting

system on a race broadcasted under this

subsection may be, but are not required to

be, included in the pari - mutuel pools of the

horse track in this state that broadcasts

the r ace upon which wagers are accepted.

The handle, as referred to in

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

accepted by an out - of - state pari - mutuel

permitholder or licensed betting system,

irrespective of whether such wagers are

included in the pari - mutuel pools of the

Florida permitholder as authorized by this

subsection.

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

TAX ON HANDLE. Ï Each permitholder shall pay

a tax on contributions to pari - mutuel pools,

the aggregate of w hich is hereinafter

referred to as Ðhandle,Ñ on races or games

conducted by the permitholder. The tax is

imposed daily and is based on the total

contributions to all pari - mutuel pools

conducted during the daily performance. If

a permitholder conducts mor e than one

performance daily, the tax is imposed on

each performance separately.

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

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

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

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

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

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

event is held . 5 /

F . South Florida Racing Association vs. DBPR

52 . Much of the argument advanced by both parties involves

the application of the opinion of the Third District Court of

Appeal in Sou th Florida Racing Association v. Department of

Business and Professional Regulation, Division of Pari - Mutuel

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

4546935 (Fla. 3d DCA July 29, 2015). In that case, the c ourt

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

considered in a determination of which facilities had Ðthe

smallest play or total pool within the countyÑ for purposes of

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

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

to live wagers and to intertrack wagers placed at guest tracks

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

summarized the issue before it as follows:

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

includes both live on - track wagers and

intertrack wagers then SFRA had the sm allest

total pool for two consecutive years, and

another summer jai alai permit should be

issued. However, if the Ð total pool within

the county Ñ includes only those wagers that

were physically placed in Miami - Dade County

(either live on - track wagers only or live

on - track wagers plus intertrack wagers

placed at guest tracks within the county),

then West Flagler had the lowest total pool,

and no permit is available.

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

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

in determining Ðthe smallest play or total pool within the

countyÑ was not raised or considered in South Florida Racing

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

the opinion remains instructive.

54 . The c ourt analyzed the plain meaning of section

550.0745(1) in determining that the factors to be considered in

establishing which facility has the smallest play or total pool

within the county were necessarily greater than just live wagers

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

After pruning out the dependent clauses and

the language that is irrelevant to this

case, we are left with: "The owner or

operator of a pari - mutuel permit . . . whose

mutuel play . . . has had the smallest play

or tot al pool within the county may apply to

the division to convert its [pari - mutuel]

permit to a permit to conduct a summer jai

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

The plain and natural meaning of this

simplified sentence is clear: The owner or

operato r of a pari - mutuel permit whose

mutuel play has the smallest play or total

pool as compared to the other pari - mutuel

permittees within that same county may apply

to convert its permit. The phrase Ð within

the county Ñ simply defines the universe of

pari - mut uel permittees with which to compare

the applicant's total pool; it does not

limit the calculation of that applicant's

"total pool" to those bets physically within

the county. It takes a very strained

reading to contort the statutory language

into the Div ision's adopted interpretation.

Moreover, the term Ð total pool Ñ seems to

refer to all monies wagered. Although

Ð total pool Ñ is not statutorily defined, the

term Ð pari - mutuel wagering pool Ñ is defined

to mean Ð the total amount wagered on a race

or game for a single possible result. Ñ

§ 550.002(24). Nothing in Chapter 550 of

the Florida Statutes limits the total pool

to solely physical in - county wagers. Thus,

we conclude that the Division Ó s

interpretation conflicts with the plain

meaning of section 550.0745(1). (emphasis

added).

Id. at 10 - 11.

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

the legislative history of section 550.0745(1) as further

support for its conclusion. However, reliance on tenets of

statutory construction, including legislative history, is

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

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

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

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

intent indicated by legislative history.Ñ).

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

the phrases Ð total pool Ñ and Ð pari - mutuel

wagering pool Ñ are used throughout Chap ter

550, the pari - mutuel wagering chapter of the

Florida Statutes, to discuss the full amount

wagered on a particular type of event. Not

once in chapter 550 is a distinction made

between wagers physically placed within the

county and wagers placed remotel y as an

intertrack wager for purposes of calculating

the Ð total pool. Ñ It is therefore

unreasonable to construe this subsection of

the statute as placing a limitation on the

calculation of the total pool.

Id. at 11 - 12.

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

chapter 550 is a distinction made between wagers placed in

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

purposes of calculating the Ð total pool. Ñ The evidence

unequivocally demonstrated that those out - of - state wagers

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

Florida pari - mutuel facilityÓs total pool.

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

DivisionÓs revenue section because they are not subject to

Florida taxation, they are reported to the DivisionÓs auditing

section on a daily basis .

59 . T he undersigned concludes that the plain meaning of

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

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

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

determination of the pari - mutuel facility Ðwhose mutuel play

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

for the relevant consecutive two - year period.

G . The June Application

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

alai permit available in Miami - Dade County for fiscal years

2012/2013 and 2013/2014 . Including simulcast export wagers as

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

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

Summer Jai Alai Partnership had the smallest total pool for the

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

2013/2014 time period, the criteria established in section

550.0745(1) for the conversion of a pari - mutuel permit to a

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

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

met . Thus, the June Application should be denied.

H. The July Application

61 . Based on the foregoing, Summer Jai Alai Partnership

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

state fiscal year s .

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

jai alai permit .

Conversion of the Summer Jai Alai Partnersh ip Permit

63 . Summer Jai Alai Partnership had the smallest play or

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

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

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

jai alai fronton . Ñ If Summer Jai Alai Partnership was

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

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

64 . The simple definition of the word ÐconvertÑ is :

: to change (something) into a different

form or so that it can be used in a

different way

: to change to a different system, method,

etc.

: to change from one form or use to another

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

webster.com. /dictionar y/convert.

65 . It is well established that :

Florida case law contains a plethora of

rules and extrinsic aids to guide courts in

their efforts to discern legislative intent

from ambiguously worded statutes. However,

when the language of the statute is

clear and unambiguous and conveys a

clear and definite meaning, there is

no occasion for resorting to the

rules of statutory interpretation

and construction; the statute must

be given its plain and obvious

meaning.

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

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

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

806, 809 (Fla. 1st DCA 2015)( Ð To discern legislative intent, a

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

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

the language of the statute is clear and unambiguous and conveys

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

meaning and not resort to the rules of statutory

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

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

1st DCA 2002 ) ( Ð If the language of the statute is clear and

unambiguous and conveys a clear and definite meaning, the

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

plain and ordinary meaning of words in a statute can be

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

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

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

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

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

a pe rmit to conduct a summer jai alai fronton.

Profi t ability

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

that:

(1) In evaluating a permit application, the

division shall deny any application where

the applicant fails to establish the

following criteria:

(a) Financial profitability of the

prospective permitholder as derived from the

assets and liabilities of the applicant; the

existence of any judgment or current

litigation, whether civil, criminal, or

administrative; the type of pari - mutuel

activity to be conducted and desired period

of operation; and net income projected over

the first three years of operation with the

permit . If the applicant is able to show

any profitability as outlined in this

paragraph, the Division will review the

following criteria in paragraph (b).

(b) That the issuance of the permit will

preserve and protect the pari - mutuel

revenues of the state by generating an

increase of total state revenue.

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

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

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

th e test of profitability established by the rule.

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

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

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

includes no express limitation of the term Ðpari - mutuel

activity. Ñ

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

pertinent part, that Ð the Legislature finds that authorized

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

mutuel style games .Ñ

70 . The Division advanced no express argument that

profitability is to be measured only against the revenues an d

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

license, and not include the revenues and expenses from the

cardroom authorized by and operating in concert with the

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

N o such limitation is hereby inferred.

71 . If Ðpari - mutuel activitiesÑ includes cardroom revenues

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

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

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

requested under the July Application would meet the test of

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

72 . Likewise, if Ðpari - mutuel activitiesÑ includes

cardroom revenues and expenses , the preponderance of the

eviden ce indicates that a new summer jai alai permit as

requested under the July Application would result in an increase

of total state revenue resulting from the taxes and fees

realized by the operation of the cardroom .

I. Conclusion

73 . It is concluded that simulcast export wagers form a

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

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

single facility with the smallest play or total pool within

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

state fiscal years. Therefore, the June Application should be

denied.

74 . Summer Jai Alai Partnership had the smallest play or

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

2014/2015 state fiscal years. However, since Summer Jai Alai

Partnership operates pursuant to a summer jai alai permit, it

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

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

Since Summer Jai Alai Partnership was not Ðeligible under

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

jai alai permit was not created. Therefore, the July

Application should be denied.

75 . If it is determined that Summer Jai Alai Partnership

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

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

summer jai alai permit, West Flagler met the requirements of

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

Applica tion.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

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

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

alai permits be DENIED.

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

Tallahassee, Leon County, Florida.

S

E. GARY EARLY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 20th day of June , 201 6 .

ENDNOTES

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

dispute between the parties centers on whether wagers that are

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

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

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

referenced by the parties , is construed encompassing all wagers

taxable in Florida, including simulcast and intertrack simulcast

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

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

of Florida. The number of totalisators operating worldwide was

not disclosed. However, there was no suggestion that any

totalisator reporting wagers to Florida facilities is less than

reliable or accurate .

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

is apparent that the Court included simulcast and intertra ck

simulcast wagers in its analysis of whether ÐintertrackÑ wagers

should be included in the facilityÓs Ðplay or total pool within

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

statutorily defined and Òmeans a particular form of pari - mutuel

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

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

transmitted from and performed live at, or simulcast signal

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

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

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

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

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

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

2013/2014 state fiscal year , but since it did not operate,

despite being licensed, its total was not considered.

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

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

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

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

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

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

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

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

pari - mutuel facilityÓs aggregate pari - mutuel pool. Although

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

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

result in smaller pay - outs on winning wagers.

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

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

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

facili t yÓs total pool.

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

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

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

notice of proposed agency action regarding the July Application

is predicated on the assumption that West Flagler was seeking to

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

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

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

Summer Jai Alai Partnership would have the smallest play or

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

was no evidence to suggest that Summer Jai Alai Partnership was

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

thereon. Thus, this Recommended Order should not be construed

as determining whether any necessary condition precedent to the

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

Alai Partnership was performed.

COPIES FURNISHED :

John M. Lockwood, Esquire

Thomas J. Morton, Esquire

The Lockwood Law Firm

Suite 810

106 East College Avenue

Tallahassee, Florida 3230 1

(eServed)

William D. Hall, Esquire

Department of Business and

Professional Regulation

Office of the General Counsel

Suite 40

1940 North Monroe Street

Tallahassee, Florida 32399

(eServed)

Jonathan Zachem, Director

Division of Pari - Mutuel Wagering

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399

(eServed)

Jason Maine, General Counsel

Department of Business and

Professional Regulation

Capital Commerce Center

2601 Blair Stone Road

Tallahassee, Florida 32309

(eServed)

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 file d with the agency that

will issue the Final Order in this case.