Off to the Horse Races

Preemption issues can take many forms. A March 5th opinion by the Eleventh Circuit in Gulfstream Park Racing Association, Inc. v. Tampa Bay Downs, Inc., 2007 WL 641973 (11th Cir.), presents an unusual one: a Florida state law prohibits exclusive licenses for the simulcast in-state of out-of-state live horse races where betting occurs within Florida.

In 2003, the district court held that Section 301 of the Copyright Act did not preempt the state law, the argument being apparently that the state law interfered with the federal right to grant exclusive licenses. The district court held that the state law reached only the manner in which betting occurred and did not per se regulate the simulcast itself. 294 F. Supp.2d 1291 (M.D. Fla. 2003). After appeal to the Eleventh Circuit, that court referred the following question to the Florida Supreme Court:

"Does the Florida Pari-Mutual 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 to other Florida wagering sites permitted to receive them?"

Phrased that way, it is not a stretch to see why preemption could be an issue. The Florida Supreme Court answered the question in the affirmative - meaning that the agreement was void, 2006 WL 2690152 (Fla. Sept. 21, 2006). The Eleventh Circuit then affirmed the district court, noting briefly in a footnote (#3) that there was no conflict.

If the state law was directed solely toward the taking of bets within the state and not a transmission by itself, the decision is correct.