Did Florida Regulator Lie in Federal Court over Blackjack Games?

A federal court case revolving around player-designated blackjack games at Florida’s pari-mutuel racing facilities heated up yesterday when a high-ranking state regulator swept all of the blame onto a lower-ranking employee. That testimony contradicted existing claims by that same employee in a sworn deposition for an unrelated trial.

The trial, which began Tuesday, was instigated by the Seminole Tribe, who’ve accused the state of violating a compact that gave them “exclusive” rights to offer banked card games like blackjack in Florida. There is controversy surrounding how regulators gave permission to state-licensed pari-mutuels to operate designated-player blackjack games, and whether those games actually violate the compact.

Daytona Beach Kennel Club is just one of over two dozen tracks in Florida that proffer designated-player blackjack games, which seem to narrowly avoid the state’s definition of “banked games… in which the house is a participant in the game, taking on players, paying winners, and collecting from losers or in which the cardroom establishes a bank against which participants play.”

$100k Buy-in for Designated Players

Instead of being house banked, designated-player games at Daytona Beach Kennel Club (DBKC) require the “designated player” to buy-in for a minimum of $100,000. The legality of such rules is a major question in the trial, but perhaps even more so, who gave the pari-mutuel authorization to impose such rules.

According to testimony on Tuesday from Jonathan Zachem, Deputy Secretary for the Department of Business and Professional Regulation, and former Director of that department’s Division of Pari-Mutuel Wagering, the responsibility lies solely upon the shoulders of one of the division’s auditors, Lisa Helms.

Zachem told US District Judge Robert Hinkle that Helms never sought input from any higher-ups in the department before signing off on the request, giving DBKC authority to impose $100k buy-ins for designated players in blackjack games.

Zachem Throws Helms Under the Bus

“It was surprising to me. I don’t know that we could have allowed it to go through,” stated Zachem, admitting that the rules are a probable violation of state law – the exact claims made by the Seminole, who argue the games violate the State Tribal Gaming Compact of 2010.

“Right down the hallway is our legal department,” Zachem told the judge. “She never asked any questions … to see if this was something she should do.”

He went on to say he wouldn’t normally put someone so “close to the bus”; a comment that drew an acerbic reply from Hinkle.

“I think you threw her directly into it,” the judge shot back.

Someone’s Pants are On Fire…

Zachem’s statements were a direct contradiction to a sworn deposition back in May during an unrelated case. In that document, Lisa Helms told attorneys for Jacksonville Kennel Club, Inc., that she received affirmative guidance from an unnamed official of higher ranking in the department before signing off on the $100k designated-player buy-in terms.

Following Tuesdays hearing, Zachem was approached by the press regarding the contradiction, but he refused to answer any questions due to the ongoing trial. Closing arguments in the case are expected to conclude today.

In the 2010 compact, the Seminole agreed to pay the state $1 billion over 5 years for exclusive rights to offer banked card games. If Judge Hinkle rules in favor of the tribe, they will continue to have exclusive rights to blackjack games, while no longer having to pay any form of revenue sharing to the state.