Court ruling opens door to gambling expansion in Florida City

 

Herald/Times Tallahassee Bureau

Florida City could be home to Miami Dade’s next poker room and, with time, slot machines, under a loophole in the law affirmed Tuesday by a state appeals court.

The decision by the First District Court of Appeal in Tallahassee overruled state regulators and said that Magic City Casino’s parent company, West Flagler Associates, is eligible to obtain a summer jai alai permit that could also open the door to expanded gambling.

Because of a loophole in state law, West Flagler is required to obtain the jai alai permit and then operate just a single jai alai game to be eligible for a poker room. After two years, it could become eligible for a slot machine license in Miami Dade County.

Isadore Havenick, West Flagler owner and vice president, said the company has an option to buy a piece of property in Florida City and, if state Division of Pari-Mutuel Wagering grants the summer jai alai permit as expected, the company plans to build a poker room and jai alai fronton near Homestead there.

As for building a new casino, “we honestly haven’t thought that far in advance,” Havenick told the Herald/Times. “Now, it’s a poker room and a jai alai fronton and, hopefully, we’ll be allowed to build that if the division allows us.”

West Flagler Associates received a summer jai alai permit in 2011 after the company’s attorney, John Lockwood, uncovered a never-used loophole in a 30-year-old pari-mutuel law. The law allows a summer permit to be awarded to the lowest-performing pari-mutuel in a county. Hialeah Park had the lowest racing handle of the county’s pari-mutuels in the 2011-12 fiscal year but it declined the option for the permit, so West Flagler became the next one eligible.

The company applied for a second permit in 2012, but the Department of Business and Professional Regulation ruled that company was eligible for only one permit every two years. West Flagler Associates said the law was intended to be a rolling two-year period and the same rule should apply in 2012 as applied in 2011. The appeals court upheld that argument.

“The statute plainly provides that the permitholder with the lowest handle for ‘the 2 consecutive years next prior to filing an application’ may apply for a summer jai alai permit, and, if it declines to do so, a ‘new permit’ is made available,” Judge Scott Makar wrote in the 3-0 ruling. Appeal judges Brad Thomas and Simone Marstiller concurred.

The permit comes loaded with advantages that legislators never imagined in 1980, when the law was written. It opens the door for a jai-alai fronton and poker room anywhere in Miami-Dade County. It also increases the odds of operating a new slots casino as a result of a 2009 law that allowed Hialeah Park Racetrack to operate slots after Miami-Dade voters authorized them for three other pari-mutuels in the county.

The court said state regulators were concerned that this interpretation of the law “would lead to a proliferation of summer jai alai permits,” but it noted that it’s the Legislature’s job to close the loophole if it doesn’t like the way the law is written. “We cannot interpret the language of the existing statute to achieve this result,” Makar wrote.

Florida’s loophole-laden gambling laws have allowed for the gradual proliferation of gambling expansion in recent years, as creative lawyers for the industry have convinced regulators and courts to permit new games.

Legislators discussed ways to close the loopholes and update the state’s gaming laws for the past year but, after spending $400,000 on a consultant’s study, legislators finished the session that ended May 2 without many any changes to the state’s pari-mutuel laws.

Mary Ellen Klas can be reached at meklas@MiamiHerald.com and on Twitter @MaryEllenKlas

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