Gulfstream Park Racing v. Tampa Bay Downs

• Decision Date: 21 September 2006
• Docket Number: No. SC05-251.,SC05-251.
• Citation: 948 So.2d 599
• Parties: GULFSTREAM PARK RACING ASSOCIATION, INC., etc., Appellant, v. TAMPA BAY DOWNS, INC., etc., et al., Appellees.
• Court: Florida Supreme Court

948 So.2d 599

GULFSTREAM PARK RACING ASSOCIATION, INC., etc., Appellant, v. TAMPA BAY DOWNS, INC., etc., et al., Appellees.

No. SC05-251.

Supreme Court of Florida.

September 21, 2006.

Keith E. Rounsaville of Akerman Senterfitt, Orlando, FL, for Appellant/Cross-Appellee Gulfstream Park Racing Association, Inc.

James M. Landis and Jon P. Tasso of Foley & Lardner LLP, Tampa, FL, for Appellees Jacksonville Greyhound Racing, Inc., Florida Jai-Alai, Inc., and Investment Corporation of Palm Beach.

Harold F.X. Purnell of Rutledge, Ecenia, Purnell & Hoffman, P.A., Tallahassee, FL, for Appellees Daytona Beach Kennel Club, Inc., Sports Palace, Inc., Hartman-Tyner, Inc., West Flagler Associates, Ltd., Southwest Florida Enterprises, Inc., St. Petersburg Kennel Club, Inc. and Associated Outdoor Clubs, Inc., Sanford-Orlando Kennel Club, Inc., Washington County Kennel Club, Inc., and Sarasota Kennel Club, Inc.

David T. Knight, Marie A. Borland and Lara J. Tibbals of Hill Ward & Henderson, P.A., Tampa, FL, for Appellee/Cross-Appellant Tampa Bay Downs, Inc.

LEWIS, C.J.

We have for review the following question of Florida law certified by the United States Court of Appeals for the Eleventh Circuit that is determinative of a cause pending in that court and for which there appears to be no controlling precedent from this Court:

DOES THE FLORIDA PARI-MUTUEL WAGERING ACT PROHIBIT AN AGREEMENT BETWEEN A FLORIDA THOROUGHBRED RACETRACK AND AN OUT-OF-STATE RACETRACK THAT GRANTS THE FLORIDA RACETRACK THE EXCLUSIVE RIGHT TO DISSEMINATE THE OUT-OF-STATE TRACK'S SIMULCAST SIGNAL TO OTHER FLORIDA WAGERING SITES PERMITTED TO RECEIVE THEM?

Gulfstream Park Racing Ass'n, Inc. v. Tampa Bay Downs, Inc., 399 F.3d 1276, 1279 (11th Cir.2005). We have jurisdiction. See art. V, § 3(b)(6), Fla. Const. In order to fully address the issues presented for consideration, we answer the certified question in two steps: (1) whether Florida law permits an agreement which restricts a Florida thoroughbred track which receives out-of-state simulcast signals from disseminating those signals to other Florida pari-mutuel venues; and (2) whether Florida law permits an agreement that would restrict a Florida non-thoroughbred track from conducting intertrack wagering on those signals.

FACTS AND PROCEDURAL HISTORY

This is a dispute between competing pari-mutuel venues. Florida has an extensive pari-mutuel industry, consisting of a variety of venues, including thoroughbred racetracks, harness racetracks, jai alai frontons, and greyhound tracks. Chapter 550 of the Florida Statutes, Florida's Pari-mutuel Wagering Act ("Wagering Act"), regulates most aspects of the pari-mutuel wagering industry in this state. See ch. 550, Fla. Stat. (2005).

The specific aspect of the pari-mutuel industry at issue in the instant matter is a type of wagering known as "intertrack wagering." An individual who visits a pari-mutuel venue may place bets at that location both on races occurring live at that venue and also on races occurring at other venues which are broadcast live at the wagering location.¹ These off-site races occur live either at other in-state venues or at out-of-state venues. Wagers on any race not occurring live at the venue accepting the wager are known as "intertrack wagers." Signals of live races occurring at out-of-state venues transmitted to Florida pari-mutuel venues, as well as signals of live races occurring at in-state venues transmitted to out-of-state venues, are known as "simulcast signals." In addition to Florida's Wagering Act, wagering on simulcast signals with interstate implications is also impacted by the federal Interstate Horseracing Act, 15 U.S.C. §§ 3001-3007 (2000) ("IHA").

Florida's Wagering Act dictates that a simulcast signal from an out-of-state thoroughbred racetrack can only be directly received by an in-state thoroughbred racetrack which is conducting live races. See § 550.3551(5), Fla. Stat. (2005). Currently, there are only four thoroughbred racetracks in Florida that qualify to receive these simulcast signals directly from out-of-state thoroughbred tracks. The remaining pari-mutuel venues (e.g., greyhound tracks and jai alai frontons) must contract with one of these four thoroughbred tracks to receive² and conduct wagering on these thoroughbred races occurring live at out-of-state locations. It is the competition with regard to disseminating these simulcast signals to the non-thoroughbred Florida pari-mutuel venues and the correlating revenue such agreements generate that drive the issue in the instant matter.

The Federal IHA removes competition with regard to many of these non-thoroughbred venues by requiring that a pari-mutuel venue within sixty miles of a thoroughbred track must obtain the approval of that particular thoroughbred track before accepting wagers on any simulcast signals of thoroughbred races. See 15 U.S.C. § 3004(b)(1)(A) (2000). This federal statutory requirement, coupled with the Florida Wagering Act's dictate that non-thoroughbred venues must contract with only thoroughbred venues to receive simulcast signals from out-of-state thoroughbred tracks, creates a situation in which a thoroughbred track within sixty miles of a non-thoroughbred pari-mutuel facility can require the non-thoroughbred venue to contract with only it, and not another Florida thoroughbred track, to receive simulcast signals of thoroughbred races occurring live at out-of-state venues. Twelve of the twenty-six non-thoroughbred pari-mutuel venues in Florida are located within sixty miles of one of the four thoroughbred tracks. Thus, those twelve venues must contract with this single nearest thoroughbred track which is conducting live races to receive and conduct wagering on simulcast signals of out-of-state thoroughbred races. The remaining fourteen non-thoroughbred pari-mutuel venues, however, are free to contract with any Florida thoroughbred track for access to these simulcast signals.

Originally, the Florida Wagering Act restricted wagering on simulcast signals. In 1996, however, the Florida Legislature amended the Wagering Act to allow "full-card" (unlimited) simulcasting. See ch. 96-364, § 11, at 2085, Laws of Fla. After the Wagering Act was amended, Gulfstream Park Racing Association, a thoroughbred track located in South Florida and appellant in the instant action, began to enter into exclusive dissemination agreements with out-of-state thoroughbred tracks for these signals. Language in these exclusive agreements obligated the out-of-state track, in exchange for Gulfstream agreeing to receive and disseminate the simulcast signals from these out-of-state facilities in the lucrative South Florida market, to restrict the dissemination rights it granted any other Florida thoroughbred track receiving the same out-of-state simulcast signal to pari-mutuel venues within sixty miles of that track. In other words, the agreements were designed to grant Gulfstream the exclusive rights to contract with the fourteen non-thoroughbred pari-mutuel venues that are not within sixty miles of any thoroughbred track for delivery of and access to the simulcast signals of these out-of-state thoroughbred tracks. Once these exclusive agreements were in place, Tampa Bay Downs ("TBD"), a thoroughbred track and appellee in the instant action, was accordingly restricted by provisions included in its contracts with these out-of-state thoroughbred tracks, in conformity with the out-of-state track's obligations under its own contract with Gulfstream, from disseminating the simulcast signals it received from these out-of-state tracks to any non-thoroughbred pari-mutuel venues outside a sixty-mile radius of TBD.

In May of 2002, TBD filed a petition with the Florida Division of Pari-Mutuel Wagering ("DPW") seeking a determination of whether these exclusive dissemination agreements with Gulfstream violated Florida law. On September 14, 2002, the DPW issued a declaratory statement finding that the exclusive agreements did violate Florida law. The declaratory statement indicated that the exclusive agreements violated the clear dictates of section 550.6305(9)(g)(1), relating to simulcast signals, but specifically stated that "[n]othing in this declaratory statement should be construed as a statement by the Division that Gulfstream Park has, in fact, violated section 550.615(3) [relating to intertrack wagering in general]." Gulfstream Park Racing Ass'n v. Tampa Bay Downs, Inc., 294 F.Supp.2d 1291, 1298 (M.D.Fla.2003) (quoting declaratory statement).

After the DPW issued its declaratory statement, TBD began contracting with non-thoroughbred pari-mutuel venues beyond the sixty-mile radius of TBD to disseminate simulcast signals of thoroughbred races occurring live out-of-state to these non-thoroughbred facilities, contrary to the exclusivity agreements held by Gulfstream. These agreements included venues for which Gulfstream would have otherwise had exclusive dissemination rights under the contracts with the out-of-state tracks. In response, Gulfstream sued TBD in federal district court seeking a declaratory judgment that Gulfstream's exclusive dissemination agreements with the out-of-state tracks were valid and enforceable under state law. Gulfstream, 399 F.3d at 1278. TBD filed a motion for summary judgment, asserting that sections 550.615(3) and 550.6305(9)(g)(1) of the Florida Wagering Act prohibited such agreements. Id. Although no state court had decided whether such exclusive agreements violated the Wagering Act, the federal district court held that the plain language of the Wagering Act did prohibit such agreements and, therefore, entered summary final judgment in favor of TBD. Id. Gulfstream sought review of the summary judgment in the United States Court of Appeals for the Eleventh Circuit, and this certified question has followed.

ANALYSIS

Restrictions on Dissemination

Section 550.6305(9)(g)(1) of the Florida Statutes requires:

Any thoroughbred permitholder...