Condo casino! Gambling law and the Florida community association.

• Author: Randazza, Marc John

"It can be argued that man's instinct to gamble is the only reason he is still not a monkey up in the trees."--Mario Puzo (1)

Speaking before the British House of Commons in 1780, Edmund Burke said, "Gambling is a principle inherent in nature." Americans have proved Mr. Burke correct to such an extent that by 1996, one author claimed: "Judged by the dollars spent, gambling is now more popular in America than baseball, the movies, and Disneyland combined." (2) Most commentators agree that Americans spend more annually on gambling than they spend on movie tickets, theme parks, spectator sports, and video games together. (3)

With such a nationwide love of wheel, card, and table, it is no surprise that condominiums, co-ops, and homeowners associations frequently seek to bring gambling home to their community clubhouses. (4) But when they do, the associations are often breaking the law and exposing themselves to unnecessary risks, which can be managed with a little bit of education on the state of the law.

Florida is considered a "fairly strict state in prohibiting gambling." (5) As such, Florida community associations and their attorneys are well-advised to educate themselves on gambling laws and how they operate in the context of common-ownership communities. Most associations consider their gambling activities to be nothing more than "having a little fun" or a creative way to raise money for a community project. Unfortunately, without the proper planning and controls in place, a "little fun" could land a community in big trouble. (6)

While this article is not intended to be a complete study of gaming law in Florida, its purpose is to educate the reader about the legal issues surrounding gambling activity in Florida condominium, co-op, and homeowners associations. To a lesser extent, this article may also serve to educate the reader regarding issues surrounding gambling in other multi-unit housing environments such as apartment buildings, college dormitories, and fraternity/sorority houses, but it is not intended to evaluate the law with respect to such entities.

Gambling Generally

"A dollar picked up in the road is more satisfaction to you than the ninety-and-nine which you had to work for, and money won at faro or in stocks snuggles into your heart in the same way."--Mark Twain (7)

In Florida, gambling is governed by F. S. [section] 849.01, et seq., (2004). Despite any use of semantic camouflage, a person engaged in illegal gambling will not escape prosecution under the statute by using a creative title for the activity. (8) Whether it is called a "fifty-fifty raffle," a "casino night," or any other name, the law will call it the same thing--gambling. (9) The Florida Supreme Court has stated that "gambling," as used in the statute, and "gaming" are synonymous, and are "defined as an agreement between two or more to risk money on a contest of chance of any kind, where one must be the loser and the other the gainer." (10) The legal definition of gambling is broad enough that almost any wagering activity falls under this general term. If it looks like "gambling," then it probably is.

Association Liability

It is important for community associations to understand that conducting or allowing prohibited gambling activities could subject the association to significant liability. The Florida gambling statute specifically prohibits maintaining a "gambling house." If an association improperly permits the use of the community's common elements (11) for illegal gambling operations, the association might be in violation of [section] 849.01 (2004), which prohibits the keeping of a "gambling house." (12)

F. S. [section] 849.01. Keeping gambling houses, etc.

Whoever by herself or himself, her or his servant, clerk or agent, or in any other manner has, keeps, exercises or maintains a gaming table or room, or gaming implements or apparatus, or house, booth, tent, shelter or other place for the purpose of gaming or gambling or in any place of which she or he may directly or indirectly have charge, control or management, either exclusively or with others, procures, suffers or permits any person to play for money or other valuable thing at any game whatever, whether heretofore prohibited or not, shall be guilty of a felony of the third degree, punishable as provided in [section] 775.082, [section] 775.083, or [section] 775.084.

Note that [section] 849.02 (2004) provides for liability for agents and employees of a keeper of a gambling house. Permitting such activity thus exposes the association, its employees, and even board members (and the association manager) to potential criminal liability. Accordingly, community associations and association counsel should understand the particular nuances of gaming law as it applies to these entities and what the coastlines of the "safe harbors" in the law look like. To that end, the next section of this study will discuss some of the more common gaming activities held in community associations.

Lotteries and Raffles

"A lottery is a salutary instrument and a tax ... laid on the willing only, that is to say, on those who can risk the price of a ticket without sensible injury, for the possibility of a higher prize."--Thomas Jefferson (13)

Many community associations and social groups attempt to raise money by conducting friendly lotteries. Often these lotteries take the form of a "fifty-fifty raffle" whereby half of the money goes to the association and half of the money goes to the winner. Regardless of nobility of the purpose or the seemingly harmless nature of the game, these lotteries are unlawful.

At common law, even in Florida, lotteries were permitted as long as they did not constitute a public nuisance. (14) In 1986, lotteries came into full favor when Florida voters amended the Florida Constitution to allow state-run lotteries. Still, the law does not extend the approval of lotteries to allow community associations to run their own numbers games.

In order for an activity to constitute a "lottery," it only needs to have three elements: 1) a prize; 2) the prize must be bestowed as a matter of chance; and 3) consideration...