DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF PARI-MUTUEL WAGERING, Appellant,
DANIA ENTERTAINMENT CENTER, LLC; DAYTONA BEACH KENNEL CLUB, INC.; JACKSONVILLE KENNEL CLUB, INC.; MELBOURNE GREYHOUND PARK, LLC; BONITA-FORT MYERS CORP.; INVESTMENT CORPORATION OF PALM BEACH; WEST FLAGLER ASSOCIATES, LTD.; TAMPA BAY DOWNS, INC.; AND TBDG, ACQUISITION, LLC d/b/a TGT POKER AND RACEBOOK, Appellees.
FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
appeal from the Division of Administrative Hearings. E. Gary
Early, Administrative Law Judge.
L. Maine, General Counsel, and Dwight O. Slater, Chief
Appellate Counsel, Florida Department of Business &
Professional Regulation, Tallahassee, for Appellant.
M. Lockwood, Thomas J. Morton, and Kala Kelly Shankle of The
Lockwood Law Firm, Tallahassee, for Appellees Dania
Entertainment Center, LLC; Daytona Beach Kennel Club, Inc.;
Jacksonville Kennel Club, Inc.; Melbourne Greyhound Park,
LLC; Bonita-Fort Myers Corp.; Investment Corporation of Palm
Beach; West Flagler Associates, Ltd.; and Christopher Kise,
James A. McKee, and Joshua Hawkes of Foley & Lardner,
LLP, Tallahassee, for Appellees Tampa Bay Downs, Inc. and
TBDG Acquisition, LLC, d/b/a TGT Poker and Racebook.
the Department of Business and Professional Regulation,
Division of Pari-Mutuel Wagering, challenges an order of an
Administrative Law Judge from the Division of Administrative
Hearings concluding that the Division's notice of intent
to repeal Florida Rules of Administrative Procedure
61D-11.001(17) and 61D-11.002(5) was an invalid exercise of
delegated legislative authority. We agree with the ALJ that
the repeal had the effect of a rule. The Division has failed
to challenge on appeal the ALJ's conclusion that the rule
was invalid for failure to comply with section 120.54(1),
Florida Statues, which governs the preparation and
consideration of statements of estimated regulatory costs.
We, therefore, affirm that portion of the order. However, we
specifically reject the portion of the ALJ's order that
concluded the Division does not have the authority to repeal
the rules that it previously adopted. Both sides agree that
the Division has this authority.
made extensive factual findings that have not been disputed
on appeal. Appellees are all cardrooms that are regulated by
the Division. As part of this oversight, cardrooms are
required to submit to the Division for approval their
"internal controls, " which must include "[a]
list of all authorized games offered for play and a
description of the rules of play and wagering requirements
for each game." Fla. R. Admin. P. 61D-11.019(4)(i).
2011, the Division began authorizing internal controls for a
particular type of card game called a "designated player
game." As defined by the ALJ:
[In a] designated player game . . . a designated player plays
his or her hand against each other player at the table,
instead of all players competing against each other. . . .
However, a designated player is not a cardroom operator.
In traditional "pool" poker games, each player bets
into a central pool, with the winning hand(s) among all of
the players collecting from the pool of bets, minus the
In designated player games, each player at the table makes an
individual bet, and compares their hand against the
designated player's hand. If the player's hand is
better than the designated player's hand, then the
designated player pays the player from the designated
player's stack of chips. If the designated player's
hand is better than the player's hand, then the
designated player collects the player's wager. At an
eight-seat table, it is as though there are seven separate
"player versus designated player" games.
requests to offer these games increased, the Division
initiated rulemaking in order "to establish the
parameters under which designated player games would be
authorized." Over the course of the next several years,
the Division conducted a series of rulemaking workshops and
received feedback from the cardrooms, which included proposed
versions of the rules. The goal of both the Division and the
industry was to avoid violating the statutory prohibition
against offering a "banking game, " which is
"a game in which the house is a participant in the game,
taking on players, paying winners, and collecting from losers
or in which the cardroom establishes a bank against which
participants play." § 849.086(2)(b), Fla. Stat.
the industry suggested a version of a rule that stated the
designated player cannot be required to cover all of the
potential wagers that could be made by the other players. The
cardrooms explained, "Multiple jurisdictions have
determined a key element to a banked card game is the house
requiring all wagers be covered. We propose this language to
distinguish between lawful games and impermissible banked
2014, three years after the rulemaking process began, the
Division adopted two new rules that had been proposed by the
cardrooms. Rule 61D-11.001(17) defines the term
"Designated player" means the player identified by
the button as the player in the ...