Saturday, July 26, 2014

Daniel Wallach Interviewed on Bloomberg Radio About Donald Sterling Controversy

Becker & Poliakoff shareholder Daniel Wallach was a guest on Bloomberg Radio earlier this week to break down the latest legal proceedings involving Donald Sterling, as the fate of the NBA's Los Angeles Clippers hangs in the balance. Mr. Wallach spoke with June Grasso and Mark Mills on Bloomberg Radio's "Bloomberg Law" to discuss how the resolution of the California probate court proceeding between Mr. Sterling and his wife could impact the ownership situation of the Clippers and Mr. Sterling's ongoing legal battle against the NBA. The rebroadcast of the interview is available here. Bloomberg Law is a nationally-syndicated radio program which examines all aspects of the legal profession and invites prominent attorneys and legal scholars on the program to analyze major issues and cases in the news.

Friday, July 11, 2014

Daniel Wallach Invited to Serve as Panelist on Donald Sterling Sports Law Roundtable at Boston Bar Association on August 8

I am honored to be joining Michael McCann, the legal analyst for Sports Illustrated and SI.com, on a panel addressing the Donald Sterling saga, to be held at the Boston Bar Association on Friday, August 8, 2014, between 12:00 PM and 1:30 PM. Joining us on the panel will be Robert Raiola, Warren K. Zola and Alan Milstein. We will be discussing the latest developments in the Donald Sterling controversy and the legal, business and ethical issues relating to his pending ouster from the NBA. The efforts to remove Mr. Sterling from the NBA touch upon many different areas of law, including the right to privacy, constitutional law, antitrust law, contract law, tax law, probate law, rules of evidence, and the extent to which the courts will review the decisions of private associations like the NBA. Please join us for a wide-ranging discussion of Donald Sterling and the many issues that his saga poses for the law, business and ethics of sports. This event, which is free (that's right, free!) is co-sponsored by the Boston Bar Association and the American Bar Association's Tort Trial and Insurance Practice Section.

Daniel Wallach Quoted in Sports Illustrated on Donald Sterling Controversy

Becker & Poliakoff shareholder, Daniel Wallach, ventured away from his Koz on Gaming duties for a brief moment this week to contribute appellate law insights to a series of columns (here and here) penned by Sports Illustrated's legal analyst Michael McCann about the probate court proceedings between Donald Sterling and Shelly Sterling, with the fate of the NBA's Los Angeles Clippers hanging in the balance. Mr. Wallach, a board-certified appellate lawyer, was interviewed about the prospects for an appeal by Donald Sterling should he lose the probate court trial on the issue of whether he was properly removed as trustee to the Sterling Family Trust. Specifically, Mr. Wallach offered insight about whether Section 1310(b) of the California Probate Code would allow the sale of the Clippers to proceed even while Mr. Sterling appealed an adverse probate court ruling. As Dan told SI, it is not a foregone conclusion that the probate court would invoke Section 1310(b). While Section 1310(b) is an exception to the general rule that probate court orders are automatically stayed during an appeal, Mr. Wallach added that this exception is narrowly construed by California courts. To successful invoke the exception, Shelly would have to make an affirmative showing that "extraordinary circumstances" exist involving a risk of "imminent injury or loss." Dan questioned whether Shelly would be able to satisfy this high threshold in light of rising NBA franchise values and the prospect of an even higher sale price at a later date. Mr. McCann concluded the article with this quote by Dan: "No evidence has been adduced that the franchise would sell for less at a later date," suggesting that Shelly faces an uphill battle in persuading the court to permit the pending sale of the Clippers to close while Donald pursues his appellate remedies.

Wednesday, July 2, 2014

Daniel Wallach to Give Opening Remarks at ABA Annual Meeting Program on Sports Betting Legal Controversy; Will Introduce Panel Featuring Theodore Olson and SI's Michael McCann

Becker & Poliakoff shareholder, Daniel Wallach, who has been one of the nation's leading voices on the emerging issue of state-regulated sports betting, will give the opening remarks at one of the most eagerly-awaited continuing legal education (CLE) programs at this year's American Bar Association Annual Meeting in Boston, Massachusetts. The 90-minute program, entitled Game-Changer: The States' Big Gamble on Legalized Sports Betting, will be presented on Sunday, August 10, 2014, at 10:30 am, at the Hynes Convention Center in Boston. Panelists include former U.S. Solicitor General Theodore B. Olson, Erin Murphy, Gabe Feldman, and West Virginia Solicitor General Elbert Lin. The program will be moderated by Michael McCann, the award-winning Legal Analyst and Writer for Sports Illustrated and SI.com. This CLE program, which was selected as one of the premier showcase events at this year's ABA Annual Meeting, is sponsored by the Appellate Advocacy Committee of the ABA's Tort Trial and Insurance Practice Section. Mr. Wallach, who conceived the program and prepared the written program materials, is Chair-Elect of the Appellate Advocacy Committee, and takes over as its Chair on August 10, 2014. The American Bar Association is one of the world's largest voluntary professional organizations, with nearly 400,000 members. The Tort Trial and Insurance Practice Section is one of the largest ABA entities, with over 26,000 members.

Monday, June 23, 2014

What's Next for New Jersey in the Wake of the Supreme Court's Denial of Certiorari in the NJ Sports Betting Case? An Analysis

The dream is over, at least for now. But is it? Earlier this morning, the United States Supreme Court declined to review New Jersey's challenge to the Third Circuit decision upholding the federal ban on state-regulated sports betting otherwise known as PASPA (an acronym for the federal statute entitled the Professional and Amateur Sports Protection Act of 1992). As disappointing as this judicial inaction is for proponents of state-sponsored sports betting, it was not unexpected. The Supreme Court grants certiorari in less than two percent of all cases--dismal odds, actually--and the scant few petitions that are granted invariably involve circuit splits, a feature which is lacking here.

But not all hope is lost. It bears emphasizing that the denial of certiorari is not a decision on the merits. It is simply the Supreme Court exercising its discretion not to hear the case. Thus, the Third Circuit's decision remains the highest-ranking decision on the constitutionality of PASPA, and the dissenting opinion from Judge Vanaskie (concluding that PASPA "violates principles of federalism") could be the catalyst that spurs other states (such as California and Minnesota) that have been closely monitoring New Jersey's efforts to enact their own sports wagering law similar to New Jersey's. They could then test the constitutionality of PASPA in a different federal circuit (such as the ultra-liberal Ninth Circuit, which covers California, or the Eighth Circuit, which includes Minnesota and which has occasionally proved to be unfriendly territory for the NFL). These states could use Judge Vanaskie's dissenting opinion (and the legal arguments raised by New Jersey) as a "playbook" for overturning PASPA. I do not foresee this as an immediate option, since it does not appear as if any other State (besides New Jersey and Delaware, which are both foreclosed by the Third Circuit's decision) has the appetite to withstand a heavy lobbying effort by the leagues, substantial legal costs (New Jersey's legal tab approached nearly $3 million -- hey, Ted Olson does not work cheap!), and a great deal of uncertainty in the years ahead just for the "puncher's chance" of overturning PASPA. It may be a few years before this mystery State reveals itself. California looked for awhile to be the best bet to emerge, but that was until Senator Roderick Wright, who had been pushing for such a law, ran into his own legal difficulties.

Looking more to the short-term, what other options exist for New Jersey and other states? One potential option is for Congress to amend PASPA to allow other States, such as New Jersey, an opportunity to license and regulate sports betting, similar to the one-year window that had been provided to New Jersey in 1993 under one of the exemptions to PASPA. As John Brennan reported earlier today, several New Jersey congressmen have already begun "imploring" their congressional colleagues to pass a new federal law allowing sports betting in New Jersey. I just don't see that happening. For one thing, gambling remains a very divisive issue, unlikely to find common ground on both sides of the political aisle. Indeed, if anything, Congress has remained hostile to gambling as of late, as evidenced by recent legislative efforts to reinvigorate the Wire Act so as to prevent States from authorizing and regulating online casino games and online poker. And, as long Harry Reid (D.-Nev.) remains Senate Majority leader, there is simply no way that he will allow Nevada to lose its "federal-blessed" sports betting monopoly.

Which brings us to the "Nuclear" option. Over the last few weeks, New Jersey State Senator Raymond J. Lesniak has made rumblings about repealing (or loosening) New Jersey's criminal prohibition against sports betting. Today, in the wake of the Supreme Court's denial of certiorari, Senator Lesniak quickly introduced legislation in New Jersey that proposes to eliminate the New Jersey statutory criminal prohibitions against sports wagering, but only with respect to the conduct of such activity at racetracks and casinos in New Jersey. It applies to no one else. In other words, today's bill is the mirror image of New Jersey's now-defeated Sports Wagering Law, which sought to "legalize" that activity at racetracks and casinos in New Jersey. Instead of "legalizing" it at those venues, Senator Lesniak now proposes to "decriminalize" it, but only at those two types of venues. Is there really a difference between the two statutory regimes, other than the absence of state regulatory oversight. Can New Jersey really succeed with this "end-run" around PASPA by repealing or modifying its criminal laws prohibiting sports betting, thereby paving the way for the opening of sports books without any regulatory oversight?

Technically, this would not be a violation of PASPA because the criminal prohibition against private persons (under Section 3702(2) of PASPA) is entirely derivative of a state's violation of Section 3702(1) for wrongfully issuing a sports betting license. Thus, if there is no "state-issued" license, then private entities would not run afoul of PASPA if they were to open up unregulated sports books in New Jersey. But this sure seems like a blatant "end-run" around PASPA, especially since the proposed legislation, rather than proposing a complete decriminalization of sports betting in New Jersey (as Senator Lesniak had hinted at), simply loosens the restrictions for only two classes--casinos and racetracks--that were the sole intended licensees under New Jersey's now-defeated sports wagering law. Such a measure will surely lead to the leagues and the NCAA running to federal court to seek an injunction against the implementation of such a law.

Nonetheless, this bizarre legal strategy appears to find support in both the Third Circuit's written opinion and in recent statements made by federal government officials. The Third Circuit majority opinion states that "we do not read PASPA to prohibit New Jersey from repealing its ban on sports wagering." As the majority further explained, "under PASPA, on the one hand, a state may repeal its sports betting ban, a move that will result in the expenditure of no resources or effort by any official. On the other hand, a state may choose to keep a complete ban on sports gambling, but it is left up to each state to decide how much of a law enforcement priority it wants to make of sports gambling, or what the exact contours of the prohibition will be. We agree that these are not easy choices. And it is perhaps true (although there is no textual or other support for the idea) that Congress may have suspected that most states would choose to keep an actual prohibition on sports gambling on the books, rather than permit that activity to go on unregulated. But the fact that Congress gave states a hard or tempting choice does not mean that they were given no choice at all, or that the choices or otherwise unconstitutional."

In briefing before the Supreme Court, the U.S. Solicitor General also stated that this legal maneuver--even if it were to result in a complete repeal of New Jersey's criminal prohibition against sports betting--would nonetheless not violate PASPA. As Senator Lesniak's proposed legislation notes, "on page 11 of his brief, the Solicitor General states that the Professional and Amateur Sports Protection Act (PASPA), 28 U.S.C. 3701 et seq. 'does not even obligate New Jersey to leave in place the state-law prohibitions against sports gambling that it had chosen to adopt prior to PASPA's enactment. To the contrary, New Jersey is free to repeal those prohibitions in whole or in part.'"

Likewise, at the June 26, 2013 oral argument before the Third Circuit, Paul Fishman (the United States Attorney for the District of New Jersey) actually conceded that New Jersey could repeal its prohibition against sports betting without violating PASPA:
MR. FISHMAN:  Mr. Olson [counsel for Governor Christie] said they can't change the law, they have to enforce the law on the books, they have to keep it illegal. None of that is true. . . . It is up to the State of New Jersey to determine for itself the extent to which it will or will not enforce that law. . . . 
THE COURT:  So New Jersey could repeal its ban on wagering on sporting events?
MR. FISHMAN:  As a matter of law it could. It would be incredibly irresponsible. 
THE COURT:  It would not violate PASPA?   
MR. FISHMAN:  No. But the reason it hasn't been done for 20 years or a hundred years is not because of PASPA. It hasn't been done because it's a really, really, really bad idea. It's irresponsible, it would be bad policy to just allow gambling to go unfettered. . . .
(Transcript, at pp. 66-68)

So, there you have it. If New Jersey desires to "repeal" its criminal prohibition against sports betting, it has the blessing of the United States Solicitor General, the United States Court of Appeals of the Third Circuit, and the United States Attorney for the District of New Jersey. That's a pretty powerful blessing. The problem, however, is that Senator Lesniak is not attempting to repeal the criminal prohibition in toto; rather, he is just simply trying to release only New Jersey's casinos and racetracks from the law's clutches. Such a law too closely mimics the now-vanquished New Jersey Sports Wagering Law in that both laws would permit only New Jersey's casinos and racetracks to conduct sports wagering. Rather than double-down on the federal government's offer, Senator Lesniak has taken only a "half-measure" (to quote the late Mike Ehrmantraut from "Breaking Bad" fame), or, more, accurately, a "1/100th measure." By limiting the repeal of New Jersey's sports betting prohibition to racetracks and casinos, Senator Lesniak's proposed bill--if passed by the Legislature--would likely be struck down by the federal courts, bringing us back to square one. Is such a gambit really worth the time, knowing the likely result?

Senator Lesniak's bill faces additional obstacles as well. First, he must get it through the divisive New Jersey Legislature. After spending nearly $3 million in an unsuccessful effort to overturn PASPA, New Jersey legislators may not have the stomach for another costly legal battle, particularly to defend a law that does not go nearly as far as the Third Circuit's and DOJ's suggestion. Further, it remains to be seen whether Governor Christie--who harbors presidential ambitions and has had his own problems of late--would sign such controversial legislation despite championing New Jersey's efforts to topple PASPA. Having had his fill of recent controversies, I suspect that Governor Christie--who is frequently at odds with Senator Lesniak--would not sign that legislation into law.

Finally, and most importantly, it is highly unlikely that the owners and operators of New Jersey's casinos and racetracks (many of whom are licensed in other jurisdictions, such as Nevada) would jeopardize their valuable out-of-state licenses by opening up sports books solely in reliance on New Jersey's limited repeal of its sports betting prohibition. The gaming commissions in other states would not look too kindly on this "end-around" by New Jersey, and could rescind the gaming licenses of any operator that is found to have engaged in sports-based wagering in New Jersey, notwithstanding any limited repeal of that law. At a minimum, those operators will first wait to see if Senator Lesniak's legislation--assuming it is passed by the Legislature and signed into law--withstands judicial scrutiny. And, even then, a careful operator might be wise to seek an advisory opinion from the out-of-state gaming commission. Thus, even if Senator Lesniak's gambit succeeds, it may be a several years before we see the first sports book in New Jersey.

Sunday, June 1, 2014

NJ Legislators File Reply Brief with SCOTUS; Argue that Sports Betting Ban "Subverts Fundamental Principles of Federalism"

Within a matter of a weeks, we will learn whether the United States Supreme Court will grant the State of New Jersey's petition to review the constitutionality of the federal ban on state-sponsored sports wagering. All of the legal briefing is nearly complete, and court officials have confirmed that the briefs will be "distributed" to the Justices on June 3, 2014, with the Justices deciding the fate of the petition at the June 19, 2014 Conference. In these last few days before the briefs are distributed, we expect all three of the New Jersey petitioners (Governor Christie, the New Jersey Thoroughbred Horsemen's Association, and New Jersey Senate President Stephen M. Sweeney) to file reply briefs with the Court. The purpose of a reply brief is to counter the arguments made by the respondents in opposition to the petitions for writ of certiorari. It is essentially the final word on the issue before the Supreme Court decides whether or not to take the case.

The first reply brief was filed late Friday afternoon by Senator Sweeney. His reply brief makes three main points. First, it effectively counters the leagues' and DOJ's attempts to downplay this case as being limited to "a single federal statute about sports wagering" by pointing to the far-reaching consequences of the Third Circuit's decision upholding PASPA and asserting that it threatens the constitutional balance of power between the States and the federal government. Pretty strong stuff. Here are some of the best points:
The Third Circuit's decision in this case subverts the fundamental principles of federalism and this Court's precedents by permitting Congress to command the States not to regulate an activity that Congress has not undertaken to regulate itself. This decision imperils state sovereignty and should not be left unreviewed by this Court. . . .

Respondents attempt to portray the constitutional issue here as limited to a single federal statute about sports wagering, the Professional and Amateur Sports Protection Act ("PASPA"). In reality, however, the Third Circuit's decision upholding PASPA raises far greater concerns: It allows Congress to evade the anti-commandeering doctrine and override the express will of the people and the legislature of a State by directing how the State must regulate its citizens in any areas, provided the direction is artfully phrased to avoid requiring any 'affirmative action.' This Court's precedents neither invite nor support this semantic limitation on the anti-commandeering doctrine and that limitation threatens the doctrine's very efficacy. Thus, this case is about no less than saving a critical barrier against federal overreaching into sovereign state functions.

[T]his case is not simply a dispute about sports wagering in New Jersey -- an important issue in its own right -- but rather one which raises an important question about state sovereignty that warrants this Court's immediate review.
(Reply Brief, at pp. 1-4)

Second, it underscores the very important point that PASPA "stands alone" among federal statutes purporting to regulate the States under the Commerce Clause in that it does not seek to protect any underlying federal regulatory or deregulatory scheme. This distinction, Senator Sweeney emphasizes, sets it apart from the host of other federal statutes (cited in the leagues' and DOJ's response) which preempt conflicting state law because they are part of an extensive federal regulatory regime. In other words, the point that Senator is making here (and echoing the arguments of the other petitioners and the amici states) is that there is no "free-standing law of preemption" that automatically elevates a federal law over a conflicting state law when there is no federal regulatory or deregulatory scheme to protect. And PASPA does not seek to protect any federal regulatory or deregulatory scheme.  For this reason, the Senator argues, PASPA does not preempt state law via the Supremacy Clause. Some highlights from the brief:
PASPA is not, as the Leagues contend, 'like any . . . express preemption clause. . . . The key difference is that, unlike such statutes, PASPA does not set forth and protect any federal regulations of private sports wagering activity with which state law might conflict, and to which state law might be subordinated.

For a federal law to preempt state law via the Supremacy Clause, there must be some federal regulatory scheme in place that directly governs individuals and displaces conflicting state regulation. . . . Indeed, each of the express preemption provisions cited by respondents is found within an extensive federal regulatory scheme that directly governs individuals, whether it be a scheme of tight federal control or of reliance on market forces.  In that context, Congress preempts the States from imposing any regulations that would conflict with the federal scheme.

In stark contrast to these statutes, PASPA does not establish or protect any federal regulatory scheme directly governing sports wagering, let alone one that conflicts with New Jersey's Sports Wagering Law." (p. 7)

Respondents have been unable to identify even a single federal statute in existence that is similar to PASPA in this regard.
(Reply Brief, pp. 5-8)

Third, it reinforces the "accountability" concerns that are at the heart of the anti-commandeering doctrine, cautioning that the States would be "reduced to mere puppets of Congress" if the Supremacy Clause were viewed as giving Congress the authority to command the States not to license and regulate an activity that Congress has not undertaken to regulate itself.  If that were the case, the Senator adds, the possibilities for Congress to escape electoral accountability would be "endless." Here is the full quote:
If respondents were correct that the Supremacy Clause permits Congress to command the States not to license and authorize an activity that Congress has not undertaken to regulate itself, the sovereign States could readily be reduced to mere puppets of Congress.  For whenever Congress wanted to escape accountability for prohibiting a certain activity, it could simply prohibit the States from licensing or authorizing that activity.  For example, if Congress wanted to ban the sale of assault weapons but feared it would be unpopular, Congress would not itself need to directly prohibit individuals from selling assault weapons; rather, it could simply prohibit the States from enacting legislation licensing or authorizing individuals to seek assault weapons and let the States take any ensuing blame.  The possibilities for Congress to escape electoral accountability would be endless.
(Reply Brief, at pp. 8-9)

We now await the reply briefs from Governor Christie and the New Jersey Thoroughbred Horseman's Association. I have it on good authority that both briefs will be filed Monday. Check back here in a few days (if not sooner) for a complete analysis of those filings.

Thursday, May 29, 2014

Court Ruling Allows Limited Gambling Expansion in Florida

In a ruling that will undoubtedly lead to limited gambling expansion in Florida, the First District Court of Appeal has reversed the Department of Business and Professional Regulation's denial of a "summer jai alai" permit for West Flagler Associates, Ltd. ("West Flagler"). West Flagler, the parent company of Magic City Casino (located in Miami-Dade County), sought to exploit a loophole in Section 550.0745(1), Florida Statutes, which allows the owner or operator of certain underperforming pari-mutuel permits to convert the underperforming pari-mutuel permit to a "permit to conduct a summer jai-alai fronton in such county during the summer season." But that's not the loophole that was exploited here. The statute goes on to state that if an eligible permittee declines to convert to a summer jai alai permit, "a new permit" is "hereby made available" to conduct summer jai alai games. Thus, the failure of an eligible permit holder to convert its underperforming permit to a summer jai alai permit opens the door for an additional gaming permit to be issued. This "new" permit can become an extremely valuable asset, as it would enable the holder thereof to open a lucrative poker room (with no-limit wagering and poker tournaments) and potentially become eligible to conduct slot machine gaming, all while not being burdened with the requirement of staging as many games or races as the other pari-mutuel permit holders.

In an ironic twist, West Flagler was not the "underperforming" pari-mutuel permit holder. That distinction belonged to Hialeah Park, the fabled South Florida racetrack that now operates quarter-horse racing. In the 2010-11 and 2011-12 fiscal years, Hialeah Park had the lowest handle among the qualifying permit holders in Miami-Dade County. This triggered Section 550.0745(1), which allows the pari-mutuel permit holder that has the lowest handle for two consecutive years to convert its permit to a summer jai alai permit. But if that underperforming permit holder does not apply for conversion of its permit, the statute further provides that "a new permit" is made available and other facilities can then seek that new permit. And that is exactly what happened here, after Hialeah Park opted not to convert its quarter-horse permit to a summer jai alai permit despite having the lowest handle among all qualifying Miami-Dade County permit holders during the two preceding years. West Flagler then stepped in and applied for a "new permit," pointing to language in Section 550.0745(1), which provides that if the eligible permit holder declines the option to convert to a summer jai alai permit, "a new permit" is then made available.

Thus, West Flagler was seeking a "new" summer-alai permit rather than the conversion of an existing one. Not so fast said the DBPR, which denied West Flagler's application, in part, because it had been issued a summer jai alai permit the previous year based on data from the 2009-10 and 2010-11 state fiscal years (Hialeah Park had the lowest handle for these two years but declined to convert). The DBPR contended that data from the same fiscal year -- 2010-11 -- could not be used to grant both new permits. In denying West Flagler's application for a new permit, the DBPR explained that once a fiscal year's data is used to grant a summer jai alai permit, the same fiscal year data may not be used in granting another summer jai alai permit. In essence, the DBPR read Section 550.0745 as allowing one new summer jai alai permit to be made available at most every two years.

The First District Court of Appeal rejected the DBPR's interpretation as contrary to the plain language of Section 550.0745(1). Citing the dictionary definition of the word "consecutive" (the key word from the statute), First DCA Judge Scott Makar explained:
The statute plainly provides that the permit holder with the lowest handle for "the 2 consecutive years next prior to filing an application" may apply for a summer jai alai permit, and if it declines to do so, a "new permit" is made available. . . . This statutory language envisions a two-year rolling period rather than the at-most-every-other-year approach the Division urges. The word "consecutive" typically means "following continuously" or "following one's or its predecessor in uninterrupted sequence." The New Shorter Oxford English Dictionary, 484 (1993). The Division's interpretation would create a discontinuity or interruption in the otherwise "consecutive years" approach that the statute establishes. We would have to interpret "consecutive" other than by its ordinary and plain meaning to reach this result, effectively rewriting it.
Opinion, at pp. 5-6.

The Court acknowledged the DBPR's concern that allowing a new summer jai alai permit to be issued each year based on a rolling two-consecutive years approach "would lead to a proliferation of summer jai alai permits," but stated that it would be up to the Florida Legislature (rather than the courts) to address that problem:
If the legislature intended to allow a new permit, at most, every other year it could have written the statute to say so. And if it deems it a good policy to have this limitation, it can implement it legislatively; but we cannot interpret the language of the existing statute to achieve this result."
(Opinion, at p. 7).

Concluding that the DBPR's interpretation of Section 550.0745(1) "is not supportable" under a plain reading of the statute, the First DCA reversed the DBPR's final order with instructions to reinstate West Flagler's application for a "new" summer jai alai permit.

The DBPR has 15 days (or until June 1, 2014) to decide whether it will seek rehearing or rehearing en banc of the First DCA's decision. It also has 30 days to decide whether seek discretionary review by the Florida Supreme Court. Unless it is able to obtain further appellate review, the DBPR will have to process and grant West Flagler's application. Once this occurs, West Flagler will be the holder of two valuable summer jai alai permits.

The First DCA's decision, assuming it remains intact, will result in expanded gaming in Florida without any need for legislative action. In a year where the Legislature was mired in gridlock on the controversial issue of gambling expansion, this decision reveals a unique new point of entry for prospective pari-mutuel permit holders. This statutory loophole could potentially be exploited in other Florida counties (such as Broward) where there are more than five pari-mutuel permits issued. West Flagler's effective use of this statute has created an additional gaming entitlement authorized by Florida law as interpreted by the Third DCA in a state in where such entitlements are very scarce. Prior to this decision, West Flagler had just one summer jai alai permit, in addition to a greyhound racing permit and a jai alai permit that it utilizes at the Miami Jai Alai site. Now it will have an additional summer jai alai permit that could be used at a new location, which is very unique under Florida law. And with that comes the right to operate a lucrative poker room, and, possibly later on, slot machines. According to media reports, West Flagler has announced that it intends to build a new jai alai facility and poker room in Florida City (near Homestead) once it receives that coveted new summer jai alai permit. And who knows, under existing Florida law as interpreted by Florida courts, they may even also qualify for an additional slot machine gaming license at the new location.