Estate and Succession Planning
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Published: May 16, 2023
Washington County Kennel Club, more commonly known as the Ebro Poker Room, provided the developing Florida Gaming Control Commission (“Commission”) with its first opportunity to set the tone on cardroom violations under the new statute related to designated player games.
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In mid-September 2022, the Commission first became aware that the Ebro facility was providing a new card game unlike any other. The new game, called “Quick Draw Poker” by its creator, was a designated player game with its own table, unique rules and bonus wagers, custom table felt, and play style. Each of these qualities created an issue in the highly regulated world of cardroom gambling.
When discussing the Quick Draw Poker game with its creator, who is also Ebro’s cardroom manager, Commission investigators learned that the basis of the game was so-called “One Card Poker,” or what many would recognize as the childhood card game of War. While One Card Poker can be found statewide in other cardrooms, the unique betting opportunities found in the Quick Draw Poker game set it apart from any other game in Florida.
One strike against the facility was that the game was being played as a designated player game. Section 849.086, Florida Statutes, only permits games approved by the former Division of Pari-mutuel Wagering (“PMW”) on or before March 15, 2018, or a substantially similar poker game identified the cardroom’s license application approved by PMW on or before April 1, 2021, to be played as a designated player game. Quick Draw Poker, as an entirely new variant, failed to meet this requirement. Ultimately, violation of this section was the allegation placed before the Commission in the administrative complaint against the Ebro facility.
However, looking closer at the facility’s conduct, other regulatory issues existed that ultimately went unaddressed. One issue was the inclusion of the table itself on Ebro’s floor. Licensed facilities must notify the Commission of what games and how many tables are on the casino floor at any time. Modification of the number of tables or the types of games being within the facility requires amending the location’s license and the approval of the Commission. Ebro failed to obtain the required approval. Additionally, because Quick Draw Poker was an entirely new game, Ebro’s decision to offer the game for play created additional issues. The game required entirely new rules, payout tables, and felt table coverings, each of which requires amendment of the facilities internal control documents and approval of the Commission. Again, Ebro failed to obtain the required approvals. Each of these failures is a violation in its own right, and none were addressed within the Commission’s initial complaint.
Furthermore, the legality of Quick Draw Poker, outside of being played as a designated player game, was not addressed in the Commission’s complaint. While the Commission and its predecessor PMW approved a variety of distinct types of poker games, the true nature of Quick Draw Poker falls outside of anything authorized so far. While played similarly to an approved poker game, the betting options and the felt reveal the game’s true nature to anyone familiar with casino gaming – a version of roulette using a deck of cards. Thus, the game itself likely falls outside of the range of permissible games, even without accounting for the game being played in a banked manner.
This case also will demonstrate the level of regulation and corresponding sanctions the Commission is willing to undertake. While the Commission has notably been partnering with local law enforcement agencies in efforts to curtail illegal gambling across Florida, this matter has to do with alleged violations of law or rule committed by a licensed operator. Notably, Ebro continued to offer Quick Draw Poker for thirty days after being put on notice by the Commission. At the speed at which One Card Poker variants can be played, the game could easily deal forty hands an hour, each with its own rake. Thus, Ebro likely dealt thousands of hands after being warned and served with a complaint regarding the alleged illegality of its game.
As such, the Commission is faced with a decision on how to apply its enforcement authority. The initial complaint and the accompanying staff-proposed stipulated settlement included only a single alleged violation carrying a $250.00 administrative penalty. At that level of enforcement, gaming facility operators are perversely incentivized to violate the state’s laws and rules until the conclusion of the administrative process. Considering only what transpired after the Commission formally put Ebro on notice of the alleged violation, the thousands of potential hands dealt would produce a take far exceeding the $250.00 administrative penalty, incentivizing operators to ignore the Commission’s procedures and enforcement actions. The staff-recommended settlement was rejected by the Commission at its May meeting, signaling that the commissioners may be interested in a more thorough staff review of the cardroom’s conduct and higher sanctions as a result of the illegal gambling activity.
Additionally, the Commission must decide how to apply its regulatory authority. Here, the Commission’s initial complaint alleged one violation of one law, broad brushing Ebro’s conduct and limiting itself to a minimal administrative penalty. However, given the nature of the conduct at issue, the Commission will likely consider the underlying nature of the “violation”. Was there a single violation in offering the game, or thirty additional violations for each day the game was available for play after the complaint was served, or was there a violation in each hand played of an allegedly illegal casino game that Ebro profited from? How the Commission chooses to view a violation in this and similar matters will greatly impact whether regulated gaming facilities are incentivized to follow or flout Florida’s gaming laws.
Thus, the ultimate decision that the Commission makes after reviewing the complaint and the underlying investigation will give industry members a glimpse into how gaming regulation in Florida will develop under the fledgling Commission, and whether the Commission chooses to be a strong regulator or a passive observer to Florida’s legal gaming industry.
