       Third District Court of Appeal
                               State of Florida

                            Opinion filed July 29, 2015.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                                No. 14-2654
                         Lower Tribunal No. 13-28720
                             ________________


                   South Florida Racing Association,
                                    Appellant,

                                        vs.

      State of Florida, Department of Business and Professional
            Regulation, Division of Pari-Mutuel Wagering,
                                    Appellee.



      An Appeal from the State of Florida, Department of Business and
Professional Regulation, Division of Pari-Mutuel Wagering.

      Lavin Law Group, P.A., and Andrew T. Lavin (Ft. Lauderdale), for
appellant.

     Department of Business and Professional Regulation, William N. Spicola,
General Counsel, and Garnett Chisenhall, Chief Appellate Counsel, for appellee.


Before SUAREZ, ROTHENBERG, and EMAS, JJ.

      ROTHENBERG, J.
      South Florida Racing Association (“SFRA”) appeals from a final order of

the State of Florida, Department of Business and Professional Regulation, Division

of Pari-Mutuel Wagering (“the Division”) denying SFRA’s application for a

summer jai alai permit pursuant to section 550.0745(1) of the Florida Statutes

(2013). In its final order, the Division interpreted the phrase “smallest play or total

pool within the county” in section 550.0745(1) to include only those wagers

physically placed within Miami-Dade County, and it denied SFRA’s application

for a summer jai alai permit solely on that basis. Because we agree with SFRA

that the Division’s interpretation of section 550.0745(1) was clearly erroneous, we

reverse.

                           FACTUAL BACKGROUND

      Pari-mutuel wagering is “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.” § 550.002, Fla. Stat. (2013). The

Division is the state agency responsible for regulating all pari-mutuel wagering in

Florida. See § 550.0251(3), Fla. Stat. (2013) (“The division shall adopt reasonable

rules for the control, supervision, and direction of all applicants, permittees, and

licensees and for the holding, conducting, and operating of all racetracks, race

meets, and races held in this state. Such rules must be uniform in their application



                                          2
and effect, and the duty of exercising this control and power is made mandatory

upon the division.”). SFRA is a pari-mutuel permittee that hosts quarter horse

races and various other gambling contests at Hialeah Park in Miami-Dade County.

As a pari-mutuel permittee, SFRA is subject to the Division’s rules and decisions.

      On July 1, 2013, SFRA sent a letter informing the Division that it had the

smallest total pari-mutuel pool for the two immediate-prior fiscal years (2011/2012

and 2012/2013) and thus had the right to convert its quarter horse racing permit to

a summer jai alai permit pursuant to section 550.0745(1), Florida Statutes (2013),

which provides, in relevant part:

             The owner or operator of a pari-mutuel permit who is
      authorized by the division to conduct pari-mutuel pools on exhibition
      sports in any county having five or more such pari-mutuel permits and
      whose mutuel play from the operation of such pari-mutuel pools for
      the 2 consecutive years next prior to filing an application under this
      section has had the smallest play or total pool within the county
      may apply to the division to convert its permit to a permit to conduct a
      summer jai alai fronton in such county during the summer season
      commencing on May 1 and ending on November 30 of each year on
      such dates as may be selected by such permittee for the same number
      of days and performances as are allowed and granted to winter jai alai
      frontons within such county. If a permittee who is eligible under this
      section to convert a permit declines to convert, a new permit is hereby
      made available in that permittee’s county to conduct summer jai alai
      games as provided by this section, notwithstanding mileage and
      permit ratification requirements.

(emphasis added). In the letter, SFRA also informed the Division that it wished to

decline its option to convert its pari-mutuel permit to a summer jai alai permit—

thereby generating a new summer jai alai permit in Miami-Dade County as


                                         3
permitted in the final sentence of the quoted language—and to simultaneously

apply for the newly available permit it had just created.1 These elections would

have allowed SFRA to keep its standard pari-mutuel permit and also apply for a

summer jai alai permit.

      In its response letter dated July 17, 2013, the Division acknowledged that

SFRA had the smallest total pari-mutuel gambling pool within Miami-Dade

County for the 2011/2012 fiscal year, but it maintained that a different pari-mutuel

gambling establishment, West Flagler Associates, Ltd. (“West Flagler”), had the

smallest total pool within the county for the 2012/2013 fiscal year. The Division

thus informed SFRA that it did not believe a summer jai alai permit was available,

and it denied SFRA’s application on that basis.

      The disagreement between the parties over which pari-mutuel establishment

had the smallest total pool for the 2012/2013 fiscal year stems solely from their

disparate methods of interpreting and calculating the “smallest play or total pool

within the county” as specified in section 550.0745(1). Pari-mutuel gambling

establishments take wagers from customers who are physically in attendance at the

pari-mutuel establishment hosting the event, which bets are typically called “live

on-track wagers,” and pari-mutuel gambling establishments also take bets remotely

from patrons who are not at the track but instead place their wagers at another track

1 We do not comment on the propriety of this request because the issue was not
raised.

                                         4
or online, which bets are called “intertrack wagers.”2 For such intertrack wagers,

the facility hosting the live event is called the “host track,” § 550.002(16), while

the facility taking a wager on that event from a remote location is called the “guest

track,” § 550.002(12). When an intertrack wager is placed, the host track receives

the vast majority of the proceeds from the wagers, while the guest track receives a

small percentage of the same. See § 550.6305, Fla. Stat. (2013) (specifying what

percentage of the proceeds should go to guest and host tracks for various pari-

mutuel events). For purposes of calculating the “smallest play or total pool within

the county,” the Division counted only those wagers placed physically at a pari-

mutuel establishment located within Miami-Dade County—only the “live on-track

wagers” placed at SFRA and any intertrack wagers that were physically placed at a

guest track within Miami-Dade County—while SFRA additionally counted

intertrack wagers placed elsewhere in the state.

      SFRA collected a pool of $1,244,845 in live on-track wagers and $218,998

in intertrack wagers, for a total collection of $1,463,843 for the 2012/2013 fiscal

year, while West Flagler collected $893,173 in live on-track wagers and


2 The term “intertrack wager” is statutorily defined and “means a particular form of
pari-mutuel wagering in which wagers are accepted at a permitted, in-state track,
fronton, or pari-mutuel facility on a race or game transmitted from and performed
live at, or simulcast signal rebroadcast from, another in-state pari-mutuel facility.”
§ 550.002(17), Fla. Stat. (2013). When such broadcasts are made to or from
facilities in a different state, it is called “simulcasting.” § 550.002(32), Fla. Stat.
(2013).

                                          5
$1,047,328 in intertrack wagers, for a total collection of $1,940,501, as illustrated

below. 3

                     Live On-track Wagers       Intertrack Wagers       All Wagers

    SFRA                   $1,244,845               $218,998            $1,463,843

    West Flagler            $893,173               $1,047,328           $1,940,501


         The parties stipulated to these amounts and also stipulated that all intertrack

wagers were placed at guest tracks located outside Miami-Dade County. Thus, the

parties agree that if the “total pool within the county” includes both live on-track

wagers and intertrack wagers wherever they are placed, then SFRA had the

smallest total pool for two consecutive years, and another summer jai alai permit

should be issued. However, if the “total pool within the county” includes only

those wagers that were physically placed in Miami-Dade County (either live on-

track wagers only or live on-track wagers plus intertrack wagers placed at guest

tracks within the county), then West Flagler had the lowest total pool, and no

permit is available. In short, the parties agree that the interpretation of the clause

“smallest play or total pool within the county” in section 550.0745(1) is

dispositive.

         After receiving the denial letter from the Division, SFRA filed a Petition for

3It is unclear in the record whether the total amount specified includes proceeds
derived by the establishments as guest track and host track, but we assume that it
does.

                                            6
Formal Administrative Proceedings that challenged the denial of its application;

however, because they stipulated to all the relevant facts, the parties later agreed to

treat the proceeding as an informal administrative proceeding under section

120.57(4) of the Florida Statutes (2013). After a hearing, an officer from the

Division entered a written recommendation that SFRA’s application be denied by

expressly interpreting section 550.0745(1) such that the “smallest play or total pool

within the county” calculation included only those bets physically placed in the

county (i.e., live on-track wagers and intertrack wagers that were placed from other

tracks in Miami-Dade County) but not intertrack wagers placed from a facility

outside of Miami-Dade County. The Division adopted that recommendation in a

final order and officially denied SFRA’s application on October 7, 2014. SFRA

timely filed this appeal.

                                    ANALYSIS

      We start by recognizing the great deference appellate courts typically afford

an agency’s interpretation of its own statute. “[T]he interpretation of a statute by

the administrative agency or body ‘charged with its enforcement is entitled to great

deference and should not be overturned unless clearly erroneous or in conflict with

the legislative intent of the statute.’” Donato v. Am. Tel. & Tel. Co., 767 So. 2d

1146, 1153 (Fla. 2000) (quoting Mayo Clinic Jacksonville v. Dep’t of Prof’l

Regulation, 625 So. 2d 918, 919 (Fla. 1st DCA 1993)). “However, ‘a court need



                                          7
not defer to an agency’s construction or application of a statute if special agency

expertise is not required, or if the agency’s interpretation conflicts with the plain

and ordinary meaning of the statute.”’ Summer Jai Alai Partners v. Dep’t of Bus.

& Prof’l Regulation, Div. of Pari-Mutuel Wagering, 125 So. 3d 304, 307 (Fla. 3d

DCA 2013) (quoting Fla. Hosp. v. Agency for Health Care Admin., 823 So. 2d

844, 848 (Fla. 1st DCA 2002)).        “[T]he Division is the state agency that is

responsible for regulating pari-mutuel wagering in Florida,” id. at 307 (citing §

550.0251, Fla. Stat. (2012)), so we examine its interpretation of the subject statute

to determine whether it is clear error, conflicts with the legislative intent of the

statute, or contradicts the plain and ordinary meaning of the statute. We believe

the Division’s interpretation of “the smallest play or total pool within the county”

is infirm in all three ways.

      The disputed sentence in the statutory language is:

             The owner or operator of a pari-mutuel permit who is
      authorized by the division to conduct pari-mutuel pools on exhibition
      sports in any county having five or more such pari-mutuel permits and
      whose mutuel play from the operation of such pari-mutuel pools for
      the 2 consecutive years next prior to filing an application under this
      section has had the smallest play or total pool within the county may
      apply to the division to convert its permit to a permit to conduct a
      summer jai alai fronton in such county during the summer season
      commencing on May 1 and ending on November 30 of each year on
      such dates as may be selected by such permittee for the same number
      of days and performances as are allowed and granted to winter jai alai
      frontons within such county.

§ 550.0745(1). After pruning out the dependent clauses and the language that is


                                         8
irrelevant to this case, we are left with: “The owner or operator of a pari-mutuel

permit . . . whose mutuel play . . . has had the smallest play or total pool within the

county may apply to the division to convert its [pari-mutuel] permit to a permit to

conduct a summer jai alai fronton in such county . . . .” Id. The plain and natural

meaning of this simplified sentence is clear: The owner or operator of a pari-

mutuel permit whose mutuel play has the smallest play or total pool as compared

to the other pari-mutuel permittees within that same county may apply to convert

its permit. The phrase “within the county” simply defines the universe of pari-

mutuel permittees with which to compare the applicant’s total pool; it does not

limit the calculation of that applicant’s “total pool” to those bets physically within

the county. It takes a very strained reading to contort the statutory language into

the Division’s adopted interpretation. Moreover, the term “total pool” seems to

refer to all monies wagered. Although “total pool” is not statutorily defined, the

term “pari-mutuel wagering pool” is defined to mean “the total amount wagered on

a race or game for a single possible result.” § 550.002(24). Nothing in Chapter

550 of the Florida Statutes limits the total pool to solely physical in-county wagers.

Thus, we conclude that the Division’s interpretation conflicts with the plain

meaning of section 550.0745(1).

      Even if we found the disputed language to be ambiguous, which we do not,

the Division’s adopted interpretation of the statute is clearly erroneous based on



                                          9
the legislative history of section 550.0745. An agency’s interpretation of a statute

is clear error if it is unreasonable. See Fla. Dep’t of Educ. v. Cooper, 858 So. 2d

394, 396 (Fla. 1st DCA 2003) (“If the agency’s interpretation is within the range of

possible and reasonable interpretations, it is not clearly erroneous and should be

affirmed.” (emphasis added)).      Every clue indicating the Florida Legislature’s

intended meaning when adopting the statute weighs against the interpretation

adopted by the Division.

      First, as noted above, the phrases “total pool” and “pari-mutuel wagering

pool” are used throughout Chapter 550, the pari-mutuel wagering chapter of the

Florida Statutes, to discuss the full amount wagered on a particular type of event.

Not once in chapter 550 is a distinction made between wagers physically placed

within the county and wagers placed remotely as an intertrack wager for purposes

of calculating the “total pool.”     It is therefore unreasonable to construe this

subsection of the statute as placing a limitation on the calculation of the total pool.

      More tellingly, the legislative history of section 550.0745 provides

compelling proof that the Legislature did not intend the disputed language to

restrict the “total pool” calculation to only those wagers physically placed within

the county. Section 550.0745 was passed as it is currently written during a special

legislative session in 1992, during which the Florida Legislature renumbered a

large portion of the pari-mutuel statutes and passed several additional provisions



                                          10
related to the regulation of pari-mutuel wagering in the state. See generally Ch.

92-348, § 14, at 31-32, Laws of Fla. Prior to this 1992 renumbering, however, the

statute that is now section 550.0745 existed in substantively identical fashion as

section 550.074. In enacting section 550.074, the Florida Legislature specifically

found:

             WHEREAS, it is the finding of the Legislature that the
      operation by permittees of legalized pari-mutuel betting has become a
      substantial business compatible with the best interests of the state, and
             WHEREAS, it is the further finding of the Legislature that the
      operations of such permittees do attract a large tourist business to the
      state and do afford entertainment to such tourists, and
             WHEREAS, it is the further finding of the Legislature of the
      state that in counties where there are five or more permittees engaged
      in the operation of pari-mutuel pools, as provided by law, on
      exhibition sports, this state fails to get the full benefit of such
      attractions in encouraging the tourist trade, for there is a lack of jai
      alai entertainment on which pari-mutuel betting is permitted during
      the summer tourist season, and it would be to the best interests of the
      state to permit summer jai alai so long as there is no increase in the
      number of permittees authorized to operate within any specified
      county, and
             WHEREAS, it is the further finding of the Legislature that the
      Division of Pari-mutuel Wagering should be empowered to
      receive and to grant the application of a permittee in such county
      whose pari-mutuel play for 2 consecutive years next prior to such
      application has had the smallest mutuel play of any pari-mutuel
      permittee within said county to conduct without further elections
      a jai alai fronton during the summer season as herein fixed and
      determined at a location within such county during the summer tourist
      season commencing May 1 and ending on November 30 of each year,
      and that this may greatly enhance the tax revenue derived by the
      state and counties and will not endanger the general welfare of the
      public, and
             WHEREAS, it is the further finding of the Legislature that in
      those counties in which harness horse racing has not provided a major


                                         11
source of local entertainment, has added little to tourism, has failed to
generate local interest, and has provided a relatively small amount of
pari-mutuel tax revenue; the permitholder and the state would
probably gain in revenues if such harness horse racing permit
were converted into a permit to conduct dog racing, NOW
THEREFORE,
Be It Enacted by the Legislature of the State of Florida:
       Section 1. (1) The owners or operators of pari-mutuel permits
which are authorized by the Division of Pari-mutuel Wagering of the
Department of Business Regulation to conduct pari-mutuel pools on
exhibition sports in any county having five or more such pari-mutuel
permits, whose mutuel play from the operation of such pari-
mutuel pools for the 2 consecutive years next prior to filing an
application under this section, has had the smallest play or total
pool within the county, may apply to the Division to convert its
permit to a permit to conduct a summer jai alai fronton in such county
during the summer season commencing on May 1 and ending on
November 30 of each year on such dates as may be selected by such
permittee for the same number of days and performances as are
allowed and granted to winter jai alai frontons within such county;
providing that if a permittee who is eligible under this section to
convert a permit declines to convert, then a new permit is hereby
made available in that permittee’s county to conduct summer jai alai
games as provided by this section, notwithstanding mileage and
permit ratification requirements and providing that in the event that a
permittee converts a quarterhorse permit pursuant to this section,
nothing herein shall prohibit the permittee from obtaining another
quarterhorse permit; however, no permit which is converted to a jai
alai permit may be authorized to conduct afternoon or matinee
performances unless the permit, as it existed prior to the conversion,
had conducted afternoon or matinee performances prior to the
conversion of the permit. Such permittee shall pay the same taxes as
are fixed and required to be paid from the pari-mutuel pools of winter
jai alai permittees and shall be bound by all of the regulations and
provisions of chapters 550 and 551, Florida Statutes, which are
applicable to the operation of winter jai alai frontons. Such permittee
shall only be permitted to operate a jai alai fronton after its application
has been submitted to the division and its license has been issued
pursuant to the application. The license shall be renewable from year
to year as provided by law.


                                    12
Ch. 80-88, § 4, at 283-84 Laws of Fla. (emphasis added).

      Clearly, the language in the enacted 1980 statute is substantially identical to

the language of the current version of section 550.0745, and thus, if ambiguous,

“smallest play or total pool within the county” was just as ambiguous in 1980.

However, the “whereas clause” preceding the enactment clarifies in transparent

fashion that “within the county” is in reference to the pari-mutuel permittees in the

county, not the wagers or pools within the county. The Legislature stated in the

fourth whereas clause, in relevant part: “the Division of Pari-mutuel Wagering

should be empowered to receive and to grant the application of a permittee in such

county whose pari-mutuel play for 2 consecutive years next prior to such

application has had the smallest mutuel play of any pari-mutuel permittee

within said county to conduct without further elections a jai alai fronton during

the summer season . . . .” Ch. 80-88, §4 at 283, Laws of Fla. (emphasis added).

Based on this language, it is clear that the Florida Legislature did not intend the

statute to limit the total pool calculation to physical in-county betting. It meant to

limit the universe of pari-mutuel permittees with which to compare the summer jai

alai applicant.

      Additionally, from a more practical standpoint, the technology for remote or

intertrack bidding did not exist in 1980 when the above statute was passed with the

exact same currently disputed language. Therefore, the Florida Legislature in 1980


                                         13
could not possibly have intended to exclude intertrack wagers by that language

because it was not aware that intertrack wagers would exist, and, although the

statute has been amended since 1980, the language has not changed.

      Lastly, the whereas clauses in the 1980 enactment evince a legislative intent

to allow a struggling entity to remain in business during the summer, thereby

increasing tax revenues and tourism. The Florida Supreme Court has agreed that

the legislative intent behind chapter 550 is largely to generate tax revenue. See

Dep’t of Legal Affairs v. Sanford-Orlando Kennel Club, Inc., 434 So. 2d 879, 882

(Fla. 1983) (explaining that the purpose of section 550.078, Fla. Stat. (1981),

which allowed a permittee to convert its permit for harness racing to a permit for

dog racing, was to allow an ailing enterprise with the least tax revenue to convert

to a more lucrative form of business, thereby generating tax revenue for the state);

Hialeah Race Course, Inc. v. Gulfstream Park Racing Ass’n, 245 So. 2d 625, 629

(Fla. 1971) (“Unquestionably, state revenue is one of the prime factors for

permission of pari-mutuel wagering in this state . . . .”). This intent is fostered best

by allowing the pari-mutuel permittee that is struggling the most to convert its

permit to a more lucrative form of business; it matters not whether the income is

from in-county or out-of-county.

      Thus, the Division’s interpretation of section 550.0745(1) limiting the “total

pool within the county” to wagers placed physically within that county is clearly



                                          14
erroneous and deviates from the common meaning of the statute. Because SFRA

had “the smallest play or total pool within the county” for the two years

immediately prior to its application, the Division erred by denying SFRA’s

application on that basis.

      Reversed.




                                    15
