The Current Legal Landmine in Florida’s Adult Arcade Industry

Many business entrepreneurs ask about legalities of opening an Adult Arcade. An Adult Arcade is a facility which houses gaming machines which have elements of luck and sometimes, elements of skill which award points which may be converted to prizes and gift certificates. Many Counties and local government agencies have attempted to regulate and legalize Adult Arcades through ordinances and referendums. However, most recently, the Supreme Court of Florida, in GRETNA RACING, LLC, Petitioner, v. FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, etc., Respondent. (Fla 2017) held that laws governing Adult Arcade are Constitutionally authorized to be promulgated solely by the State Legislature, and thereby voided all the County ordinances and other referendums enacted by the local agencies or local vote by the electorate.

 

As such, Florida Statutes § 849.08 and § 849.16 which makes it a crime to play or engage in any game of chance, at any place, by any device whatever, for money or other thing of value is still in full force as a third degree felony across the State. Further, Florida Statute 849.16 defines illegal slot machines as machine-based games that contain “any element of chance or any other outcome unpredictable by the user.” The implication of this Supreme Court ruling is that even if a business receives its County and City occupational and business licenses to operate the adult arcade business, the business and the responsible owner may still be held criminally liable under Florida State law.

 

But the story does not end there. Very few of these businesses and owners have been criminally prosecuted. In August 2006 a Broward County Jury awarded a not guilty verdict to an Adult Arcade owner. The jury verdict has no precedence value; however, it has given confidence to many Adult Arcade owners to open their doors. Some Counties, at the discretion of the State Attorneys, have turned to confiscating the machines and forcing closure outside of the criminal court system. Using the criminal statutes, select State Attorneys have employed the civil court system to permit the confiscation of the machines and close the businesses down. For instance, in Let’s of Ocala II, LLC v. Brad King et al., No. 15:2648-CA-G (Fla. Cir. Ct. July 13, 2016) the Court found that the Adult arcade was an illegal operation and sided with the City of Ocala that the Adult Arcade business could be shot down and denied the Adult Arcade’s petition for injunctive relief. The end result was that the business was shot down and the owner lost his investment in about 50 machines.

 

Experienced attorneys inform our Adult Arcade clients that the adult arcade business is a high risk business. The Law still makes it a crime to operate Adult Arcades (Excluding of course, locales such as Chuck E. Cheese and Dave and Busters). Indeed, at least one jury has acquitted a defendant and, under the current legal and political climates, State Attorneys have not recently been prosecuting these cases under the criminal court system.

 

Attorneys have successfully won in Court to shot down the business and confiscate the machines. Businesses should be mindful that every situation and process is different not only from an operational perspective, but even under the current political climate or political motivation of each individual State Attorney for each judicial circuit. Experienced attorneys, such as the Business Lawyers Melbourne FL locals turn to, work with client’s current status of the law and what is happening in their particular county. However, businesses will have fluctuating risks, and they need to properly evaluate before committing their money and time. A business attorney familiar with Adult Arcades and the political climate of the County in which the business seeks to operate, should be employed.

 
Screen Shot 2018-02-01 at 3.38.42 PM  Thanks to authors at Arcadier, Biggie & Wood, PLLC for insight into Business Law.

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