Court reverses course, rules against slot machines

(Courtesy MGM Grand Hotel)

TALLAHASSEE, Fla. – In an unusual legal move that sent ripples throughout the state's pari-mutuel industry Friday, an appellate court reversed itself and decided that a Northwest Florida racetrack cannot have slot machines without the authorization of the Legislature.

The ruling by a three-judge panel of the 1st District Court of Appeal sided with Attorney General Pam Bondi and Gov. Rick Scott's administration, which sought a rehearing after a 2-1 ruling this spring in favor of Gretna Racing in Gadsden County.

As they did in the earlier opinion, the judges Friday asked the Florida Supreme Court to weigh in on the issue of whether pari-mutuels can have slot machines if local voters approve, or if the games require the express say-so of the Legislature.

Rehearings are commonly sought by lawyers on the losing sides of issues but are rarely granted.

The Gretna case is even more unusual because Judge Nikki Ann Clark, who joined Judge Robert T. Benton in May's majority opinion, retired while the request for rehearing was pending. The May ruling would have given the small Northwest Florida facility permission to add slot machines after Gadsden County voters approved them.

The court decided against granting Bondi's request for an "en banc," or hearing before the full appeals court, in favor of a rehearing before a three-judge panel with a new member. Judge Ross L. Bilbrey on Friday joined the 32-page majority opinion authored by Judge Scott Makar, who wrote a scathing dissent in May.

The case hinges on a semantic analysis of a 2009 law establishing eligibility for slot machines at pari-mutuels. The 2009 law, which went into effect the following year, was an expansion of a 2004 voter-approved constitutional amendment that authorized slot machines at seven existing horse and dog tracks and jai-alai frontons in Broward and Miami-Dade counties.

The 2009 change allowed a Hialeah track, which wasn't operating at the time the amendment was approved, to also operate the lucrative slots. The law in question consists of three clauses, including one that deals with counties outside of Broward and Miami-Dade.

State regulators last year denied the Gretna racetrack a slots license, arguing the Department of Business and Professional Regulation was "not authorized to issue a slot machine license to a pari-mutuel facility in a county which … holds a countywide referendum to approve such machines, absent a statutory or constitutional provision enacted after July 1, 2010, authorizing such a referendum." The agency justified its decision with a non-binding opinion by Bondi.

Lawyers for Gretna argued that the statute does not include the word "enacted," and other counties do not need prior authorization from the Legislature to get the requisite voter approval for slots.

But, in Friday's ruling, Makar wrote that Bondi's interpretation of the law was "spot on."

"The alternative view, which would restructure the statute and change its meaning to allow slot machines to be deployed on a statewide basis without any clear authority to do so, is inconsistent with principles of statutory and constitutional construction, legislative intent, and the history of laws prohibiting slot machines in the State of Florida," he wrote.

Makar also raised the question of whether the Legislature has the authority to approve slot machines outside of Broward and Miami-Dade counties, based on a previous Florida Supreme Court ruling in a case known as "Greater Loretta." That opinion, which dealt with an interpretation of Florida's 1968 Constitution, found that "all other lotteries -- including bolito, cuba, slot machines, etc., are prohibited." Makar asked the Supreme Court for guidance.

"So which is it? Are slot machines a form of lottery that only the people may approve via constitutional amendment? Or are slot machines not prohibited as lotteries under (the state Constitution's) article X, section 7, which may be legislatively authorized statewide without constitutional authority?" Makar wrote.

Makar also asked the court to settle the issue of the 2009 law. Voters in five other counties -- Brevard, Lee, Hamilton, Palm Beach, and Washington -- have also approved referendums authorizing slots at local pari-mutuels. State regulators have denied applications for slots in four counties, and the Palm Beach Kennel Club has an appeal pending. Tracks in Lee and Brevard counties are likely to appeal as well.

In an opinion concurring in part with Makar, Bilbrey wrote that he ended up on the three-judge panel thanks to "the luck of the draw." The former Pensacola circuit judge joined the appeals court in January after being appointed by Scott.

Addressing the circumstances surrounding the rehearing, Bilbrey acknowledged that "the judgment of a retired colleague is entitled to some deference." But, he wrote, "a successor judge is not required to always vote identically to the predecessor on rehearing."

The Gretna facility, owned by the Poarch Creek Indians and a handful of investors, has been mired in controversy since its inception. Florida officials granted the track the country's first pari-mutuel license for rodeo-style barrel racing, but a court later decided that gambling regulators erred when they awarded the license.

"We are disappointed with this reversal, and we look forward to a review from the Florida Supreme Court where we feel this issue will be resolved in our favor," the tribe said in a statement following Friday's ruling.

In his dissent Friday, Benton argued that gambling regulators' interpretation of the law "would render superfluous the entire third clause" of the statute that deals with "any licensed pari-mutuel facility in any other county."

The agency's interpretation would mean that a referendum authorizing slots could only be held if the Legislature passed another law, Benton pointed out.

"But that was the status quo" before the 2009 law was enacted, Benton wrote. "There was no need or purpose in enacting a statutory provision to state the obvious," he wrote.

David Romanik, a lawyer who represents Gretna and is a part owner of the facility, said he was disappointed in the court's decision to "overrule its own very well-reasoned original opinion, but grateful that the Supreme Court will have the opportunity to review this issue of great statewide importance."

But an association that represents horse breeders and trainers lauded the ruling.

"Justice has been served today in Florida. Simply, the 2012 Gadsden County slot referendum never should have been approved, inasmuch as it was based upon the pretext of 'pari-mutuel barrel racing' -- the licensing of which was ultimately ruled in 2013 to be an overstep of regulatory authority," Florida Horsemen's Benevolent and Protective Association President Bill White said in a statement.