Florida Supreme Court to decide if pari-mutuels must be approved by Legislature

TALLAHASSEE (NSF) – The Florida Supreme Court will decide whether a Gadsden County racetrack should be allowed to have slot machines without the express permission of the Legislature, in a case with widespread implications for gambling throughout the state.

The court on Tuesday accepted jurisdiction in the Gretna Racing case after a split appellate court reversed itself on the issue in October.

In the Oct. 2 decision, the 1st District Court of Appeal ruled that the Northwest Florida racetrack cannot have slot machines without the authorization of the Legislature, even though voters in the county approved the lucrative slots.

A majority of a three-judge panel 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 both decisions, the appellate judges 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.

The Supreme Court’s ruling will likely affect gambling operations in Gadsden and at least five other counties — Brevard, Hamilton, Lee, Palm Beach and Washington — where voters 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 were expected to appeal as well.

In Tuesday’s order, the Supreme Court gave Gretna Racing’s lawyers until Dec. 21 to file initial briefs in the case. The state must file its response within 20 days, and Gretna has another 20 days after that to reply. Tuesday’s order also said the court would schedule oral arguments separately.

Most industry insiders expected the Supreme Court to take up the case.

“I would have been surprised if they had denied it,” said Phil Padovano, a lawyer who retired from the 1st District Court of Appeal earlier this year. Padovano may represent one of the interested parties in the Gretna case in the future.

“Here you have a 2-1 (appellate) decision with a very strong dissent, a very well-reasoned dissent. I’m not saying that the court’s going to agree with that, but it doesn’t surprise me that the court would want to take a look at this and answer the question,” he said.

The rare reversal in the Gretna case came after 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 Gadsden County facility permission to add slot machines.

The appellate 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 in October joined the 32-page majority opinion authored by Judge Scott Makar, who wrote a scathing dissent in May.

The unusual procedural history of the case probably had little impact on the justices’ decision to consider the broader question, Padovano said.

“I don’t think it’s a very positive thing for the 1st District to be reversing itself by nothing more than a change in court personnel. But I don’t think that really had a lot to do with it. It seems to me, and this is just my opinion, but if the court thought that this was clearly the right decision, they might have been more inclined to simply deny review. I’m not saying that they won’t ultimately think it’s the right decision. They might. But the decision to accept review basically just says that they think there’s a serious enough question there to be investigated and to be decided in the Supreme Court,” he said.

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.

The Gretna 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.

“We are obviously pleased and are looking forward to discussing the rules of English grammar and stare decisis with the Supreme Court soon,” Marc Dunbar, a lawyer representing the Gretna racetrack who is also one of its owners, said in an email Tuesday. “Stare decisis” is a legal term referring to the policy of courts to abide by principles established by precedent.

In the October 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.

But in a strongly-worded dissent, Judge Robert T. Benton — who authored the May opinion that would have granted slots to the Gretna facility — 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.”

A Supreme Court decision in favor of Gretna would not only affect pari-mutuels in other counties, but could shrink state coffers.

Under a 20-year agreement finalized in 2010 between the Seminole Tribe of Florida and the state, the tribe has exclusive rights to operate slot machines, outside of pari-mutuels in Broward and Miami-Dade counties. The state reaps about $120 million a year from the revenue-sharing agreement.

“That’s the big elephant in the room,” said Wilbur Brewton, a veteran lobbyist whose clients include Calder Race Course. “It’s going to be really interesting if the Supremes rule that you could have referendums throughout the state … but if they do, then that’s where we’ll go.”

The News Service of Florida’s Dara Kam contributed to this report.