Florida Regulators Watching Card Rooms

The Sarasota Kennel Club (l.) and Pensacola Greyhound Racing recently received administrative complaints regarding designated player games in their cardrooms. The games violate the agreement between Governor Rick Scott and the Seminole Tribe, giving the tribe exclusivity to offer blackjack in return for $1 billion to the state over five years.

The Florida Department of Business and Professional Regulation recently filed administrative complaints against Pensacola Greyhound Racing and the Sarasota Kennel Club for continuing to offer casino-style house-banked card games, so-called designated player games, in their cardrooms. The games violate the settlement agreed to by Governor Rick Scott and the Seminole Tribe of Florida this summer.

The games, in which players are competing against a “bank” instead of each other, were the subject of a legal battle between the state and the Seminole Tribe, concerning whether the games violated the tribal casinos’ exclusive rights to offer banked card games such as blackjack. Scott and the Seminoles reached an agreement in July after U.S. District Judge Robert Hinkle ruled in favor of the tribe.

Under the agreement, the state dropped its appeal of the federal court decision and said it would take “aggressive enforcement action” against parimutuels that might be offering designated player games in violation of state law.

However, a spokesman for the Pensacola facility, operated by the Poarch Band of Creek Indians, said the track’s player-banked games “were approved by DBPR.” The spokesperson said the track had “requested clarification from DBPR on procedures so that we can alleviate their concerns.”

Representing the Seminoles, attorney Barry Richard said he discussed the settlement agreement with DBPR officials. “They informed us that they wanted us to know that they’ve already begun to enforce the law as Judge Hinkle interpreted. We have a high level of confidence they appear to be conscientiously and in good faith abiding by the settlement agreement and by Judge Hinkle’s decision.”

That agreement focused on the tribe’s 20-year compact with Florida, which expired in 2015. Under the 2010 deal, the tribe guaranteed $1 billion in payments to the state for the exclusive rights to offer the banked card games for five years. When the agreement expired, the tribe sued the state and accused state gambling officials of breaching the compact by allowing horse and dog tracks and jai alai frontons to offer designated player games.

Last fall Hinkle sided with the Seminoles. In his 36-page ruling he said designated player games had violated state law and ordered the tribe to be allowed to continue to offer banked games for the remainder of the compact’s 20-year term. He noted one cardroom’s requirement that potential designated players pass a background check and post a cash bond of $100,000 to act as the bank. “The assertion that this game was just players competing against one another, without a ‘bank’ established by the facility, should have been a nonstarter. But the department assured the cardroom in writing that the game was compliant with Florida law. The assurance provided a ‘safe harbor,’ protecting the facility from prosecution for conducting an illegal banked game,” Hinkle wrote.

Lobbyist Nick Iarossi, who represents two dog tracks that operate designated player games, said, “What this does show, and what puts all the facilities that are operating designated player games on notice, is that the division plans to live up to their word in the recently agreed-to settlement with the tribe that they will vigorously enforce any designated player games. Gambling regulators are going to come in. They’re going to check tape. They’re going to watch games being played live. And if they see anything out of compliance being done, they’re going to issue administrative complaints and fines. So everybody is double and triple-checking to make sure they’re in compliance.”

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