State cracks down on player-backed card games at race tracks
Seven parimutuel race tracks in Florida, including West Flagler's Magic City Casino in Miami, were given notice Tuesday that they were illegally operating player-banked cards games, and ordered to appear before an administrative judge.
The decision is an about-face by the state's Division of Parimutuel Wagering, which had allowed 18 cardrooms in Florida to operate the games under the state law that authorized poker.
The card games -- which include three-card poker, two-card poker, Casino War and Pai Gow poker -- were brought to Florida by Palm Beach Kennel Club in 2012 and soon were copied by other card rooms. They are popular because they have the feel of a casino game as players bank against each other.
By 2014, state officials had proposed rules to place limits on the games but the rules were challenged in court. The challenge led to a settlement and DBPR adopted a new rule approving and regulating the games in 2014.
As part of the approval process, regulators visited cardrooms, sought modifications in the game and clarifications in an attempt to make sure they were in compliance with state gaming laws, those involved in the activity told the Herald/Times.
As the Seminole Tribe was working to reach agreement with the state to continue operating its black jack and other table games, it filed a lawsuit alleging that the player-banked card games were an expansion of gambling and a violation of the existing compact.
The state continued to allowed the games to operate after the lawsuit was filed but, after Gov. Rick Scott signed a new compact in December, the agency moved to repeal the rule it had previously approved on player-banked games. The repeal is also being challenged.
According to the complaints filed with the seven parimutuels, the state sent in inspectors to the various tracks in December and found they were operating the games and did not have proper operating licenses.
The other parimutuels served with the notice include: Palm Beach Kennel Club, St. Petersburg Kennel Club, Gulfstream Race Course, Jacksonville Kennel Club, Tampa Bay Downs and Pompano Park Racing. Download West Flagler AC Packet
"It's unclear how the agency can stay these games are unauthorized when they expressly authorized them in numerous approvals,'' said John Lockwood, a lawyer who represented several of the parimutuels that sought permission to operate the poker games.
Department of Business and Professional Regulation Secretary Ken Lawson refused to elaborate on why and how he came to the conclusion that the games that his agency had previously approved had all of a sudden been ruled in violation of state law.
“After reviewing operations and obtaining additional information at pari-mutuel facilities throughout the state, the Division of Pari-Mutuel Wagering discovered violations of Florida law resulting in administrative complaints,'' Lawson said in a statement to the Herald/Times. "We will continue to administer the law and maintain our opposition to unauthorized activity conducted at any facility licensed by the state.”
Howard Korman, CEO of Jacksonville Greyhound Racing, told the Senate Regulated Industries Committee Wednesday that he was surprised by the state's action after state regulators came to his facility before they installed the machines and approved them.
"We explained to them how the games are played, we had our internal controls approved and it wasn't until just recently that all of a sudden they said no,'' he told the Senate Regulated Industries Committee. " We basically felt we had complete permission. We were the 12th facility in the state to put them in, waiting to make sure everything was taken care of...I truly don't undesrtand why at this point in time the argument is being made by our regulators that the rules now is different."
Sen. Jack Latvala, R-Clearwater, offered his conclusion. "It's unfortunate for someone who went to the expense of putting those in to have the carpet pulled out from under you,'' he said, noting that he asked questions about the compact last week, suggesting that the provision in it that legalized the banked poker games was nothing new because the state has already authorized them.
"I've got to believe it's related to the compact and the questions I asked in this committee last week,'' he said.
Sen. Rob Bradley, R-Fleming Island, chairman of the Senate Regulated Industries Committee, told reporters he had questions about DBPR's action after it was raised by Jacksonville Racing CEO Howard Korman before the committee on Wednesday.
Korman said that he was surprised by the action because the agency had not only approved the operation of the card games, but observed how they were operated before they gave the approval.
"We had our internal controls approved and it wasn't until just recently that all of a sudden they said no,'' Korman said.
Bradley said he wanted to know "what is it that precipitated them moving in this direction at this point in time? Is it a philosophy that what they are doing before was inconsistent with the current state law and, if so, which law and what do they see happening from a factual standpoint that would draw that conclusion?"