Staff Analysis: PCB COM 23-05, Changes in Ownership of or Interest in Pari-mutuel Permits

Summary

A House of Representatives staff analysis of PCB COM 23-05, Changes in Ownership of or Interest in Pari-mutuel Permits, sponsored by the Commerce Committee and dated April 24, 2023, with SB 7044 listed as an identical or similar bill. It describes the Florida Pari-mutuel Wagering Act, which restricts permitholders that did not hold an operating license for Fiscal Year 2020-2021 from holding a permit or receiving an operating license. The analysis states that the bill would allow a purchaser, transferee or assignee of a valid permit, if approved by the Florida Gaming Control Commission beforehand, to hold the permit and receive cardroom and operating licenses. It notes that West Flagler Associates, Ltd. applied in December 2022 to transfer a permit, and states that the bill does not appear to have a fiscal impact on state or local government.

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“Staff Analysis: PCB COM 23-05, Changes in Ownership of or Interest in Pari-mutuel Permits.” Original at www.flhouse.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-3220-commerce-committee-proposed-committee-bill-analyses-fn-pcb05-bdeee9f50b/, SHA-256 9287b8cf5eed60fcaabd225315ae40f8dc6b0b083cee0e5e37123b7b2a7a7765.

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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCB COM 23-05 Changes in Ownership of or Interest in Pari-mutuel Permits
SPONSOR(S): Commerce Committee
TIED BILLS: IDEN./SIM. BILLS: SB 7044

REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF

Orig. Comm.: Commerce Committee 10 Y, 6 N, As CS Thompson Hamon

SUMMARY ANALYSIS
The Florida Gaming Control Commission (commission) is the regulatory body that is responsible for exercising
all regulatory and executive powers of the state with respect to gambling, including pari-mutuel wagering,
cardrooms, and slot machine facilities. The Florida Pari-mutuel Wagering Act (Act) provides specific permitting
and licensure requirements for the pari-mutuel industry. Pari-mutuel wagering activities are limited to operators
who have received a permit from the commission, which is then subject to ratification by county referendum.
Permitholders apply for an operating license annually to conduct pari-mutuel wagering activities. Certain
permitholders are authorized to operate cardrooms and slot machines at their facility.

The Act generally requires that any transfer or assignment of a permit receive prior approval by the
commission, which must determine the eligibility of persons and entities to hold a permit. Similarly, if a permit is
held by a corporation or business entity other than an individual, the transfer of ten percent or more of the
stock or other evidence of ownership or equity in the permitholder may not be made without the prior approval
of the transferee by the commission.

The Act restricts a pari-mutuel permitholder from holding a permit, or being issued an operating license to
conduct pari-mutuel wagering, slot machine gaming, or the operation of a cardroom, if the permitholder did not
hold an operating license for the conduct of pari-mutuel wagering for Fiscal Year 2020-2021. The Act exempts
converted thoroughbred permits from this restriction.

The bill relaxes the provisions in the Act that restrict pari-mutuel permitholders from holding a permit, or
being issued an operating license, regardless of whether the permitholder held an operating license for Fiscal
Year 2020-2021.

Relating to permits, the bill allows a permit, for the conduct of pari-mutuel wagering and associated
cardroom and slot machine licenses, to be held by a purchaser, transferee, or assignee of a valid permit to
conduct pari-mutuel wagering, if approved by the commission before such purchase, transfer, or assignment,
and provided that the commission does not approve or issue an additional permit for the conduct of pari-mutuel
wagering.

Relating to cardrooms, the bill allows a purchaser, transferee, or assignee of a valid permit to be issued a
license to operate a cardroom.

Relating to operating licenses, the bill authorizes the issuance of an operating license to an eligible
purchaser, transferee, or assignee of a valid permit.

The bill does not appear to have a fiscal impact on state or local government. The bill may expand the sale and
transfer market for pari-mutuel permitholders.

The bill is effective upon becoming law.

This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 4/24/2023
FULL ANALYSIS

I. SUBSTANTIVE ANALYSIS

A. EFFECT OF PROPOSED CHANGES:
Present Situation

General Overview of Gaming in Florida

Gambling is generally prohibited in Florida, unless specifically authorized. Section 7, Art. X, of the
Florida Constitution prohibits lotteries, other than pari-mutuel pools, from being conducted in Florida.
Chapter 849, F.S., includes prohibitions against slot machines, keeping a gambling house and running
a lottery. However, a constitutional amendment approved by voters in 1986 authorized state-operated
lotteries, and a constitutional amendment in 2004 authorized slot machines in Miami-Dade and
Broward Counties.

The following gaming activities are also authorized by law and regulated by the state:
 Pari-mutuel1 wagering;2
 Gaming on tribal reservations in accordance with the Indian Gaming and Regulatory Act and the
2010 Gaming Compact with the Seminole Tribe of Florida;
 Slot machine gaming at certain licensed pari-mutuel locations in Miami-Dade County and
Broward County;3 and
 Cardrooms 4 at certain pari-mutuel facilities.

Chapter 849, F.S., also authorizes, under specific and limited conditions, the conduct of penny-ante
games,5 bingo,6 charitable drawings,7 game promotions (sweepstakes),8 bowling tournaments,9 and
skill-based amusement games and machines at specified locations. 10

In 2013, the legislature clarified that Internet café style gambling machines were illegal in the state. The
legislation clarified existing sections of law regarding slot machines, charitable drawings, game
promotions, and amusement machines and created a rebuttable presumption that machines used to
simulate casino-style games in schemes involving consideration and prizes are prohibited slot
machines.11

In 2015, the legislature determined that the regulation of the operation of skill-based amusement
games and machines would ensure compliance with Florida’s limitations on gambling and prevent the
expansion of casino-style gambling. The legislature clarified regulations related to the operation and
use of amusement games or machines to ensure that regulations would not be interpreted as creating
an exception to the state's general prohibitions against gambling.12

1 “Pari-mutuel” is defined in Florida law as “a system of betting on races or games in which the winners divide the total amount bet,

after deducting management expenses and taxes, in proportion to the sums they have wagered individually and with regard to the odds
assigned to particular outcomes. See s. 550.002(22), F.S.
2 See ch. 550, F.S., relating to the regulation of pari-mutuel activities.
3 See FLA. CONST ., art. X, s. 23, and ch. 551, F.S.
4 S. 849.086(2)(c), F.S., defines “cardroom” to mean “a facility where authorized card games are played for money or anything of

value and to which the public is invited to participate in such games and charged a fee for participation by the operator of such
facility.”
5 S. 849.085, F.S.
6 S. 849.0931, F.S.
7 S. 849.0935, F.S.
8 S. 849.094, F.S., authorizes game promotions in connection with the sale of consumer products or services.
9 S. 849.141, F.S.
10 S. 546.10, F.S.
11 Florida House of Representatives Select Committee on Gaming, Final Bill Analysis of 2013 CS/HB 155, p. 1 (Apr. 19, 2013).
12 S. 546.10, F.S.
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Amendment to Florida Constitution Prohibiting Racing of and Wagering on Greyhounds or
Other Dogs

During the 2018 General Election, the voters approved an initiative constitutional amendment,
Amendment 13, Prohibition on Racing of and Wagering on Greyhounds or Other Dogs, which has been
codified in the State Constitution as Article X, Section 32.13

Article X, Section 32 states:

Prohibition on racing of and wagering on greyhounds or other dogs.—The humane
treatment of animals is a fundamental value of the people of the State of Florida. After
December 31, 2020, a person authorized to conduct gaming or pari-mutuel operations
may not race greyhounds or any member of the Canis Familiaris subspecies in
connection with any wager for money or any other thing of value in this state, and
persons in this state may not wager money or any other thing of value on the outcome
of a live dog race occurring in this state. The failure to conduct greyhound racing or
wagering on greyhound racing after December 31, 2018, does not constitute grounds
to revoke or deny renewal of other related gaming licenses held by a person who is a
licensed greyhound permitholder on January 1, 2018, and does not affect the eligibility
of such permitholder, or such permitholder’s facility, to conduct other pari-mutuel
activities authorized by general law. By general law, the legislature shall specify civil or
criminal penalties for violations of this section and for activities that aid or abet
violations of this section.

As of January 1, 2021, wagering on live greyhound racing in Florida is completely prohibited. However,
cardroom and slot machine facilities by such permitholders may continue to operate after the closure of
racing activities.

Pari-mutuel Wagering

Since approximately 1931, pari-mutuel wagering has been authorized in Florida for jai alai, greyhound
racing, and horseracing. These activities are overseen and regulated14 by the Division of Pari-Mutuel
Wagering (division) at the Florida Gaming Control Commission (commission), which is housed within
the Department of Legal Affairs, Office of the Attorney General.15 The commission is tasked with
exercising all regulatory and executive powers of the state on all forms of gambling authorized by the
State Constitution or law including pari-mutuel wagering, card rooms, slot machine facilities, and the
oversight of gaming compacts under the federal Indian Gaming Regulatory Act but excluding state
lottery games authorized by the State Constitution.16

Pari-Mutuel Wagering State Revenue

License fees and taxes collected by pari-mutuel wagering permitholders, including slot machine and
cardroom permitholders, are deposited with the Chief Financial Officer, to the credit of the Pari-mutuel
Wagering Trust Fund. Slot machine tax revenue is transferred from the Pari-mutuel Wagering Trust
Fund to the Educational Enhancement Trust Fund to supplement public education funding statewide.
Taxes collected by cardrooms are split between the Pari-mutuel Wagering Trust Fund and the General
Revenue Fund.

Pari-Mutuel Wagering Live Performance Requirements

13 See the text of Amendment 13, now codified as art. X, s. 32, at

http://www.leg.state.fl.us/Statutes/index.cfm?Mode=Constitution&Submenu=3&Tab=statutes#A10S32 (last visited Apr. 20, 2023).
14 From 1932 to 1969, Florida’s pari-mutuel industry was regulated by the State Racing Commission. In 1970, the commission became

a division within the Department of Business Regulation, which, in 1993, became DBPR.
15 See ss. 16.71-16.716, F.S.
16 S. 16.712, F.S.
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Currently, only thoroughbred permitholders are required to conduct live racing.17 Greyhound
permitholders may not conduct live racing, and jai alai permitholders, harness horse racing
permitholders, or quarter horse racing permitholders may elect not to conduct live racing or games.

A greyhound permitholder, jai alai permitholder, harness horse racing permitholder, or quarter horse
racing permitholder that does not conduct live racing or games: 18
 Retains its permit;
 Is a pari-mutuel facility as defined in s. 550.002(23), F.S.;
 Is eligible, but not required, to be a guest track, and if the permitholder is a harness horse racing
permitholder, is eligible to be a host track for purposes of intertrack wagering and simulcasting
pursuant to ss. 550.3551, 550.615, 550.625, and 550.6305, F.S.; and
 Remains eligible for a cardroom license.

A permitholder or licensee may not conduct live greyhound racing or dogracing in connection with any
wager for money or any other thing of value in the state. The division is authorized to deny, suspend, or
revoke any permit or license in ch. 550, F.S., for conducting live greyhound racing or dogracing in
violation of this provision. In addition to, or in lieu of, denial, suspension, or revocation of such permit or
license, the division is authorized to impose a civil penalty of up to $5,000. All penalties imposed and
collected must be deposited with the Chief Financial Officer to the credit of the General Revenue
Fund.19

Pari-mutuel Wagering Permitting and Licensure

The Florida Pari-mutuel Wagering Act (Act)20 provides specific permitting and licensing requirements
for the conduct of the pari-mutuel industry.21 Pari-mutuel wagering activities are limited to operators
who have received a permit from the division, which is then subject to ratification by county
referendum.22 Permitholders apply for an operating license annually to conduct pari-mutuel wagering
activities.23 Certain permitholders are also authorized to operate cardrooms 24 and slot machines at their
facility.25

During Fiscal Year 2020-2021, the following 39 pari-mutuel permitholders were licensed to operate:26
 Nineteen Greyhound Racing permits.
 Three Thoroughbred Horse Racing permits.
 One Harness Horse Racing permit.
 Six Quarter Horse Racing permits.
 Ten Jai-Alai permits.

The division may revoke or suspend any permit or license upon the willful violation by the permitholder
or licensee of any provision of the Act, or any administrative rule adopted by the division, and may
impose a civil penalty against the permitholder or license up to $1,000 for each offense. 27

During Fiscal Year 2021-2022, the division issued 40 rulings and 14 consent orders, assessed fines
totaling $16,500 and imposed three license suspensions for violations. 28

17 S. 550.01215(1)(b)1., F.S.
18 Id.
19 S. 550.01215(1)(b)2., F.S.
20 Ch. 550, F.S.
21 S. 550.054(1), F.S.
22 S. 550.054(2), F.S.
23 S. 550.0115, F.S.
24 S. 849.086, F.S.
25 S. 551.104, F.S.
26 Florida Gaming Control Commission, Annual Report Fiscal Year 2021-2022, https://flgaming.gov/pmw/annual-

reports/docs/AnnualReport-2021-2022--1st%20FGCC--20221206.pdf (last visited Apr. 20, 2023.)
27 S. 550.054(9)(b), F.S.
28 Id.
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Pari-Mutuel Wagering License Restrictions

The Act generally requires that any transfer or assignment of a permit receive prior approval 29 by the
commission, which must determine the eligibility30 of persons and entities to hold a permit. Similarly, if a
permit is held by a corporation or business entity other than an individual, the transfer of ten percent or
more of the stock or other evidence of ownership or equity in the permitholder may not be made without
the prior approval of the transferee by the commission. 31

The Act provides restrictions on which persons and entities (including but not limited to employees,
officers and directors, partners, and owners of the permitholder) may hold permits, based on whether
they are of “good moral character,” or have been convicted of a disqualifying felony32 or for
bookmaking.33

The Act restricts pari-mutuel permitholders from being issued an operating license to conduct pari-
mutuel wagering, slot machine gaming, or the operation of a cardroom if the permitholder did not hold
an operating license for the conduct of pari-mutuel wagering for Fiscal Year 2020-2021.34

The Act restricts pari-mutuel permitholders from holding a permit to conduct pari-mutuel wagering and
associated cardroom or slot machine licenses 35 unless the permitholder, other than a limited
thoroughbred permitholder, held an operating license for the conduct of pari-mutuel wagering for Fiscal
year 2020-2021.36

The Act restricts cardroom licenses from being issued to any permitholder, other than a limited
thoroughbred permitholder, if the permitholder did not hold an operating license for Fiscal Year 2020-
2021.37

The Act specifies that permits held on January 1, 2021 are deemed valid, but new permits for pari-
mutuel wagering may not be approved or issued.38

The commission is required to revoke the permit of any permitholder, other than a limited thoroughbred
permitholder, who did not hold an operating license for the conduct of pari-mutuel wagering for fiscal
year 2020-2021. A permit revoked under this provision is void and may not be reissued.39

Recent Activities

In December 2022, West Flagler Associates, Ltd. applied40 to the commission to transfer its pari-mutuel
permit #15541 and associated licenses to conduct pari-mutuel wagering, slot machine gaming, and

29 There is one exception to the prior-approval requirement in s. 550.054(11)(a), F.S., which is that the holder of a permit converted to
a jai alai permit “may lease or build anywhere within the county in which its permit is located.” As of 2021, such conve rsions are
prohibited. See s. 550.054(15)(d), F.S.
30 See s. 550.1815, F.S
31 See s. 550.054(11), F.S.
32 Pursuant to s. 550.1815(1)(b), F.S., the following are disqualifying felonies: (1) a felony in Florida; (2) any felony in any other state

which would be a felony if committed in Florida under the laws of this state; (3) any felony under the laws of the United States; or (4)
a felony under the laws of another state if related to gambling which would be a felony under Florida law if the offense was committed
in Florida.
33 The term “bookmaking” is defined in s. 849.25, F.S., to mean “the act of taking or receiving, while engaged in the business or

profession of gambling, any bet or wager upon the result of any trial or contest of skill, speed, power, or endura nce of human, beast,
fowl, motor vehicle, or mechanical apparatus or upon the result of any chance, casualty, unknown, or contingent event whatsoe ver.”
34 S. 550.01215(1)(d), F.S.
35 Under s. 551.114(4), F.S., designated slot machine gaming areas must be located at the address specified in the licensed

permitholder's slot machine license issued for Fiscal Year 2020-2021.
36 S. 550.054(15)(a), F.S.
37 S. 849.086(5)(c), F.S.
38 S. 550.054(15)(c), F.S.
39 S. 550.054(9)(a), F.S.
40 Florida Gaming Control Commission, Meetings Archive, Discussion of application for ownership transfer 4.1 2022 -048451 West

Flagler Associates, LTD (Dec. 1, 2022), https://flgaming.gov/meetings/archive/ (last visited Apr. 19, 2023).
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operate a cardroom, to Wind Creek Miami, LLC, a wholly owned subsidiary of PCI Gaming Authority,
an unincorporated chartered instrumentality of the Poarch Band of Creek Indians. The commission did
not approve the transfer of the permit because Wind Creek Miami, LLC did not hold an operating
license for the conduct of pari-mutuel wagering for Fiscal Year 2020-2021 as required by the Act.42

In February 2023, the commission conditionally approved the acquisition of West Flagler Associates,
Ltd.’s permit after PCI Gaming Authority substituted Gretna Racing LLC as the purchaser of pari-mutuel
permit #155 and the accompanying pari-mutuel, slot machine, and cardroom licenses.43 Gretna Racing
LLC did hold an operating license for pari-mutuel wagering and for the operation of a cardroom for
Fiscal Year 2020-2021.44

Prior to 2021, Debary Real Estate Holdings, LLC, Jefferson County Kennel Club, and North American
Racing Association held pari-mutuel wagering permits, but did not possess an operating license for the
conduct of pari-mutuel wagering for Fiscal Year 2020–2021. Accordingly, the commission issued
notices of intent to revoke their permits, pursuant to the restrictions in the Act. The three entities have
challenged the commission’s proposed agency action by filing petitions for formal administrative
hearings that are currently being litigated at the Division of Administrative Hearings.45

Proposed Changes

The bill relaxes the restrictions on pari-mutuel permitholders from holding a permit, or being issued
an operating license, regardless of whether the permitholder held an operating license for Fiscal
Year 2020-2021.

Specifically, relating to permits, the bill allows a permit for the conduct of pari-mutuel wagering and
associated cardroom and slot machine licenses, to be held by a purchaser, transferee, or assignee
of a valid permit to conduct pari-mutuel wagering, if approved by the commission before such
purchase, transfer, or assignment, and provided that the commission does not approve or issue an
additional permit for the conduct of pari-mutuel wagering.

Relating to cardrooms, the bill allows a purchaser, transferee, or assignee of a valid permit to be
issued a license to operate a cardroom.

Relating to operating licenses, the bill authorizes the issuance of an operating license to an eligible
purchaser, transferee, or assignee of a valid permit.

The bill becomes effective upon becoming a law.

B. SECTION DIRECTORY:
Section 1: Amends s. 550.054, F.S., relating to the application for permit to conduct pari-mutuel
wagering.

Section 2: Amends s. 849.086, F.S., relating to cardrooms authorized.

41 Florida Gaming Control Commission, Tracks and Frontons, Permit Holders List 2021-2022, Flagler Dog Track and Magic City
Casino, Permit No. 155, https://flgaming.gov/pmw/tracks -frontons/ (last visited Apr. 19, 2023).
42 S. 550.01215(1)(d), F.S., also prohibits the issuance of an operating license for the conduct of pari-mutuel wagering, slot machine

gaming, or the operation of a cardroom, if the permitholder did not hold an operating license to conduct pa ri-mutuel wagering for
Fiscal Year 2020-2021. Section 849.086(5)(c), F.S., also prohibits the issuance of a cardroom license under the same restrictions.
43 Florida Gaming Control Commission, Meetings Archive, Discussion of application for ownership transfer 2.1. 2022-048451 West

Flagler Associates, LTD 3. Discussion of recommended orders (Feb. 8, 2023), https://flgaming.gov/meetings/archive/ (last visited
Apr. 19, 2023).
44 Florida Gaming Control Commission, Permit Holder Operating Licenses 2022-2023, Gretna Racing, LLC (542),

https://flgaming.gov/pmw/tracks -frontons/permitholder-operating-licenses-2022-2023/ (last visited Apr. 19, 2023).
45 Florida Gaming Control Commission, Annual Report Fiscal Year 2021-2022, Pending Litigation, https://flgaming.gov/pmw/annual-

reports/docs/AnnualReport-2021-2022--1st%20FGCC--20221206.pdf (last visited Apr. 20, 2023).
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Section 3: Amends s. 550.0125, F.S., relating to license application; periods of operation; license
fees; bond.

Section 4: Provides an effective date of upon becoming law.

II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT

A. FISCAL IMPACT ON STATE GOVERNMENT:

1. Revenues:
None.

2. Expenditures:
None.

B. FISCAL IMPACT ON LOCAL GOVERNMENTS:

1. Revenues:
None.

2. Expenditures:
None.

C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Relaxing restrictions on eligibility for pari-mutuel wagering operating licensure may expand the market
related to the sale and transfer of such licenses.

D. FISCAL COMMENTS:
None.

III. COMMENTS

A. CONSTITUTIONAL ISSUES:

1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.

2. Other:
None.

B. RULE-MAKING AUTHORITY:
None.

C. DRAFTING ISSUES OR OTHER COMMENTS:
None.

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IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES

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