By Mary Ellen Klas, The Miami Herald
Published November 9, 2011
Florida gambling regulators are hit with legal challenges over their decision to expand horse and jai alai permits because of tangled interpretations of state gambling law and a 30-year old loophole
TALLAHASSEE — The Scott administration’s decision to issue a jai alai permit in Miami and a barrel racing permit in the tiny North Florida town of Gretna has unleashed a mad dash across the state for the rare pari-mutuel permits but, opponents said Tuesday, they will fight the decisions in court.
Florida’s Division of Pari-mutuel Wagering last week received the second application for a summer jai alai permit based on a 1980 loophole in state gambling law. On Monday, owners of Hamilton Downs jai alai and poker room in Jasper filed for a barrel racing permit for their quarter horse track in Hamilton County.
“It’s the Wild West — at a level I have never seen,’’ said Gary Rutledge, a longtime lawyer and lobbyist for Mardi Gras Casino. He said a lawsuit will be coming “in due course” by several existing permit holders.
They are challenging the decision by the division to allow Magic City Casino last week to obtain a permit for a summer jai alai permit. They say the decision was not only a flawed interpretation of a state law but unconstitutional.
In the backdrop of this tug-of-war over pari-mutuel permits is the ongoing debate over whether the state should authorize destination resort casinos in Miami-Dade and Broward and whether to give the state’s existing pari-mutuels the same games and tax rates. If the Legislature authorizes the resort casinos and gives pari-mutuels parity, the value of a pari-mutuel license would soar.
According to Magic City lawyer, the permit issued last week could be used by the dog track and casino to operate a poker room and, potentially, another slots permit anywhere in Miami Dade County.
After the Herald/Times reported the story on the permit last week, Everglades Jai Alai, owned primarily by Broward County developer Ron Bergeron with the former general counsel of Gulfstream Racetrack, David Rominik, filed an application for a similar permit in Weston.
Their expectations “are fundamentally incorrect,’’ Rutledge told the Herald/Times Tuesday. “There is no legal authority for the state to issue that permit. This was a one-time situation [in 1980] and there was no contemplation anything like this would occur.”
Rutledge, who once lobbied for Rick Scott and hospital chain Columbia-HCA, has the added advantage of having been director of the Division of Pari-mutuel Wagering in 1980 when the loophole was passed by lawmakers.
The intention then was to allow the horse and dog track in a county with the lowest handle, or total amount wagered, to apply for a summer jai alai permit. Jai alai was at its peak of popularity at the time and demand was high for the games. He said the statute applied only to counties where five or more pari-mutuel permit holders operated — Miami-Dade and Broward — and allowed the summer permits only “so long as there is no increase in the number of permittees authorized to operate within any specified county.”
Rutledge now believes that state regulators violated the provisions of the law by expanding the number of permits in Miami-Dade but, he adds, the law may also be unconstitutional because legislators used a general statute to apply to a specific class — Miami-Dade and Broward.
Meanwhile, the Florida Quarterhorse Racing Association has filed a legal challenge against the state arguing the state has no authority to issue the pari-mutuel permit for the Gretna Race Track because barrel racing is not a pari-mutuel sport. The challenge came after the Gadsden County commission last week asked voters during the Jan. 31 presidential preference primary to authorize the Las Vegas-style games at the Gretna track and, with that, allow the track’s owners to apply for a slots permit. The Gretna Casino is primarily owned by the Alabama-based Poarch Band of Creek Indians, along with Romanik and Gulfstream lobbyist Marc Dunbar.
For the bill’s sponsors, who want to create a new gaming regulatory agency and bring “destination resort” casinos to Florida, the ongoing disputes are proof that Florida needs to reform its gambling regulations.
“They couldn’t have scripted it any better,’’ said Rep. Erik Fresen, R-Miami, one of two sponsors of the bill to bring destination resort casinos to South Florida.
Mary Ellen Klas can be reached at meklas@MiamiHerald.com and on Twitter @MaryEllenKlas