In a decision that could have wide-ranging implications for pari-mutuels throughout the state, an administrative law judge ruled Monday that the way "designated-player" card games are being operated by a Jacksonville poker room violates the state's ban on so-called banked card games.
Monday's ruling that the popular card games are being played illegally comes more than four years after Florida gambling regulators first signed off on the games, which have eclipsed other card games like Texas Hold 'Em in popularity among patrons.
But it wasn't until last year, as state officials and the Seminole Tribe reached a proposed agreement on a gambling deal, that regulators tried to shut down the games.
The controversy involves what are known as "designated-player" card games, also called "player-banked" card games, which include a hybrid of three-card poker and resemble casino-style card games but are played among gamblers instead of against the house. Pari-mutuel operators --- who are banned by law from offering "banked" card games, such as blackjack, in which players bet against the house instead of against each other --- contend the games are legal.
But, in a case involving Jacksonville Kennel Club, Inc. that was viewed by both sides as a legal test of the issue, Administrative Law Judge Suzanne Van Wyk ruled Monday that the way the card games are being played "did indeed violate" state law.
"Given the strict statutory prohibition against gambling, the intricate regulatory scheme imposed, and the narrow carve out for cardrooms, the games cannot be allowed to continue to operate in the current manner," Van Wyk wrote in a 54-page order. "The basic (tenet) of the cardroom statute is that authorized games are not casino gaming because the participants 'play against each other.' As currently operated, the designated player is a player in name only. The existing operation of the games does no more than establish a bank against which participants play."
Lawyer John Lockwood, who represents the Jacksonville facility and other operators, said in a telephone interview Monday that he was reviewing Van Wyk's 54-page order. An appeal is expected.
Van Wyk levied a $4,500 fine against the Jacksonville facility, also known as bestbet Jacksonville, for nine counts of violating state gambling regulations involving the games. She dismissed other charges related to allegations that employees of a third-party company involved in the designated-player games were "working" in the Jacksonville cardroom without authorization.
Regulators in January filed complaints against more than two-dozen cardroom operators regarding the games, which bring in about $1 million a month at the Jacksonville pari-mutuel.
At the Jacksonville facility, designated players who work for third-party companies have sat in front of trays of chips without actually playing the games. Dealers, who work for the cardroom, have doled out the chips to the other players at the table. Lawyers for the state argued that the Jacksonville facility essentially established a "bank," even if it did not directly operate it.
"If a mannequin was sitting in the designated player's seat, or you just put a Coke can there, the games would play no differently than if a living, breathing, human being was sitting there. They'd play the exact same way. Literally, all the designated player does is sit next to the chips," Department of Business and Professional Regulation lawyer William Hall said during a hearing in the case on June 1."Can that person legitimately be called a player?"
The Jacksonville cardroom tried to show that the games observed by inspectors, which led to the complaints, were no different than those approved by gambling regulators just months earlier. Regulators had also signed off on identical games at another pari-mutuel years before, as demonstrated by videotapes of the card games shown during a hearing in June.
Hall argued that, while the games themselves are legal, the manner in which they were being conducted was not, even if they had been operated in the same way for years.
"If the petitioner (the department) allowed something that should not have been allowed, shame on us," Hall said during closing arguments in June. "But … are these games legal, or are they not?"
Lockwood had argued that, because the state had approved them before Jacksonville started offering the card games in September, regulators could not change their position after the facility launched the games.
But, siding with the state, Van Wyk found that the Jacksonville cardroom failed to prove that the games as played were ever authorized, according to the judge.
At the most, Van Wyk wrote, lawyers for the Jacksonville cardroom showed that gambling regulators "were negligent in failing to stop the games as soon as it became apparent that Jacksonville was operating the games in a banking manner."
Lockwood also had accused regulators of abruptly changing their view of the games after Gov. Rick Scott and the Seminole Tribe signed a proposed $3 billion gambling deal in December. The deal was never approved by the Legislature and never went into effect. The designated-player games are also an issue in a lawsuit between the tribe and the state over banked card games. A five-year deal giving the tribe exclusive rights to operate banked games expired last summer, prompting the lawsuit.
Van Wyk did not address the issue involving the Seminoles in Monday's order.