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New Rules At Odds With Some in Gambling Industry

September 10, 2013 - 6:00pm

"Jockeys" would have to hang up their jeans and cowboy hats, and all race tracks would be required to have oval shapes under a set of new rules proposed by gambling regulators.

The proposed rules, released by the state Division of Pari-Mutuel Wagering last week and up for discussion for the first time at a workshop Oct. 16, are an attempt to rein in the proliferation of questionable practices at race tracks and jai-alai frontons throughout the state, ranging from "flag-drop" horse races to a fronton without a full roster of players.

But insiders say the draft rules, while a good starting place, are riddled with problems and demonstrate a lack of knowledge of Florida's gambling industry, a cash cow for the state and for operators.

"Some of them make sense. Some of them haven't been thought out very well," said Kent Stirling, executive director of the Florida Horsemen's Benevolent and Protective Association. "One or two are pretty silly."

Regulators' decisions about permits and practices over the past few years have spawned 21 active lawsuits and deepened the animosity between the highly competitive operators. Lawmakers also are preparing to tackle the contentious gambling issues during the 2014 legislative session.

After getting beat up in the media and in courtrooms, the Department of Business and Professional Regulation is holding workshops on the proposed gambling rules crafted around laws the agency described in a news release as "unclear" and lacking "many standards necessary to ensure the continued integrity of pari-mutuel wagering." The Division of Pari-Mutuel Wagering is part of the department.

The draft rules as written "gut the horse industry in Florida," said Marc Dunbar, a gambling lawyer and part-owner of a Gretna facility where regulators granted the first-ever rodeo-style "barrel racing" permit. An administrative law judge later ruled the agency erred in granting the permit, and a consent order between Dunbar and DBPR allowed Creek Entertainment Gretna to instead hold "flag-drop" horse races and thereby keep its lucrative card room at the facility west of Tallahassee.

I'm surprised they came out with something where they clearly didn't understand the ramifications of the words that they put on the page," Dunbar said.

The rules appear intended to stamp out future attempts at barrel racing or other nontraditional horse races in a variety of ways, including barring "the racing animal to change course in response to any obstacles on the racing surface" and setting up new requirements for jockeys, including that they "wear racing silks consisting of white pants and racing colors registered with the racing secretary" and weigh less than 130 pounds.

But the draft rules also would impose restrictions on current horse races that would devastate the industry if left unchanged, said Stirling, whose organization represents horse breeders and trainers.

Races that don't comply with the eight new proposed race regulations would not count toward performances, which means they could affect tracks' ability to simulcast other races but would have no impact on card rooms and, in Broward and Miami-Dade counties, slot machine operations.

The troubling changes would do away with races less than six furlongs in length and require at least six horses in every race.

Stirling said horses are often scratched from races after rain leaves tracks muddy. Operators would have to kill the entire race, creating problems for trainers and owners who've traveled to compete, Stirling said.

"We can't live with that rule," Stirling said.

The proposal that "no race must be shorter than 330 feet in length" -- or six furlongs "is a killer," Stirling said. Two-year-olds that race in the summer can't compete in such long races, he said.

"That's silly. We run baby races at 4.5 furlongs and we've been doing it for a hundred years. I know they're in Tallahassee but we have these things called phones," he said.

Stirling also objected to a proposal that would require all horses to have at least 10 prior published races or workouts before entering a competition. That's too many, he said.

The proposed jai-alai regulations would require all permit holders to have a rotational system of at least eight different players certified by a "recognized national or international" jai-alai association. The draft rule is apparently aimed at quelling a fight over jai-alai games at Ocala Poker and Jai-Alai, which began its 2012 season with just two players, drawing complaints from professional jai-alai players.

Another proposal dealing with permits reverts to an old, unwritten requirement that applicants have zoning in place before permits are granted. The proposal would require a letter from local governments promising that zoning for pari-mutuel activities "would be viewed favorably." Regulators, who once required only a letter from a land-use attorney saying zoning was available, later interpreted the statutes to mean that prior zoning is required before a permit is issued.

The workshops will give industry insiders the chance "to distill down some of these concerns of questions or confusion," said Division of Pari-Mutuel Wagering Director Leon Biegalski.

"They're draft rules. They're a starting point. We want to make sure that all the permit holders and all the stake holders are on the same page in terms of what the regulation is that's out there and what should be out there," he said.

Some question why DBPR, an executive agency run by Gov. Rick Scott's office, is dealing with the rules now as the Legislature prepares for its own debate. Others say the proposals go far beyond the agency's authority to craft rules. The agency is relying on a broad statute that gives it the power to establish "reasonable rules for the control, supervision, and direction of all applicants, permittees, and licensees and for the holding, conducting, and operating of all racetracks, race meets, and races held in this state."

In the past, the agency has dragged its feet on promulgating regulations and has been criticized, including by judges, for making some decisions about gambling without going through the formal rule-making process.

For example, the agency's rules about poker games are five years old and don't reflect a 2010 change in state laws that did away with a $100 limit on poker games. DBPR held a workshop on the card room rules in February, the first since a July 2010 workshop that went nowhere. The agency has yet to release any formal proposed rules since this year's card room workshop. For three years, there have been no limits on poker games, yet the rules still require dealers not to allow players to enter a game if they have more than $100 worth of chips.

The rule-making process can be lengthy. Rules require a fiscal analysis before they can become finalized. New rules can also be challenged, opening the door for expensive and drawn-out legal battles. Lawyers who successfully invalidate the rules in court can win up to $50,000 in legal fees.

There is little chance that the rules will be finalized before the Legislature convenes in March or even by the end of the session in May. Still, some industry players say they welcome the opportunity to bring Florida's gambling more in line with traditional practices.

"Some of the issues that are there, such as what kind of races can you run, are the kinds of things that need to actually be discussed. Whether or not they pass it before the Legislature passes it or not, frankly the division should be applauded for addressing the issues," said Wilbur Brewton, a lobbyist whose clients include Calder Race Course.

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