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Horse breeders can challenge divvying up of award money, court says

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Horse breeders have legal standing to “challenge the annual plan for distribution of owners’ and breeders’ awards,” according to a unanimous appeals court decision Monday.

In a case ultimately about who controls the money and how much goes back to horsemen and breeders, Southern Cross Farm (SCF) had appealed a ruling from state gambling regulators.

The Department of Business and Professional Regulation said the Ocala horse breeder couldn’t challenge the doling out of money from a pool managed by the nonprofit Florida Thoroughbred Breeders’ & Owners’ Association (FTBOA), “specifically designated by the Legislature in 1977 to collect and distribute wagering prize monies as awards.”

That was in part because the farm had let its membership in FTBOA lapse.

But Monday’s opinion concluded “the very persons the statutory framework was designed to benefit—breeders of Florida thoroughbred racehorses—(cannot) be excluded from administratively challenging a plan that, by statute, is intended to benefit them; and we are disinclined to do so absent clearer legislative direction.”

“The Department is currently reviewing the opinion,” DBPR spokeswoman Kathleen Keenan said in an email. Requests for comment also have been sent to farm owners Belinda M. Kitos and Robert J. Kitos and the FTBOA.

Horse racing overall is “big business” in Florida: It “ranks only behind Texas and California with respect to the total number of horses—500,000 (and all) equine activities generate approximately $5 billion for Florida’s economy,” according to the opinion.

“People from all walks of life are involved in Florida’s total equine industry, from the wealthiest families (e.g., the Bloomberg, Steinbrenner, Gates and Onassis families) to your regular Joe farmers, horse trainers, children and retirees,” it said, quoting a bar journal article.

During fiscal year 2015-16, “the FTBOA paid out $5,786,595 in Breeders’ Awards and $2,378,047 through the Florida-bred Stakes Program,” the Division of Pari-Mutuel Wagering’s annual report says.

“A recurrent theme in FTBOA’s history,” however, “is the tension between the association’s economic interests and those of the breeders and owners, each seeking a share of the pool,” the opinion said.

Southern Cross Farm, whose website boasts a history of winning thoroughbreds, “earned $17,405 in breeders’ awards in 2015 (four different horses) and intended to race these same horses in 2016,” the judges said.

The farm challenged FTBOA’s setting of award amounts, but an administrative law judge ruled “its substantial interests were not affected” by the divvying-up plan and found it “much too speculative” that the farm “would again receive awards that might be diminished by FTBOA’s actions.”

First, it had to prove it could sue, “an important issue that is likely to recur and over which we have jurisdiction despite it being moot as to the 2016 plan,” according to the court.

Yes, the three-judge panel said, because “the statutory framework was set up to provide economic inducements for Florida breeders like SCF to operate successful equestrian programs in-state.”

The 14-page decision was by Judges Scott Makar, Allen Winsor and Associate Judge John Brown. Brown, a 1st Circuit judge, normally sits in Okaloosa County.

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Before joining Florida Politics, journalist and attorney James Rosica was state government reporter for The Tampa Tribune. He attended journalism school in Washington, D.C., working at dailies and weekly papers in Philadelphia after graduation. Rosica joined the Tallahassee Democrat in 1997, later moving to the courts beat, where he reported on the 2000 presidential recount. In 2005, Rosica left journalism to attend law school in Philadelphia, afterwards working part time for a public-interest law firm. Returning to writing, he covered three legislative sessions in Tallahassee for The Associated Press, before joining the Tribune’s re-opened Tallahassee bureau in 2013. He can be reached at jim@floridapolitics.com.

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