Why Flagler Beach Blocked Disabled Veterans’ Request For a Penny-Ante Gambling Hall

On Thursday, the Flagler Beach City Commission turned down a request by its local chapter of the Disabled American Veterans to allow it to open a pseudo-gambling hall in its facility on South 6^th Street. The decision potentially accelerates the chapter’s demise. It was an emotional hour. The commission didn’t actually vote on the matter. It merely let an existing zoning ordinance speak for them: city zoning forbids commercial activities such as these “penny arcades” from being conducted in residential areas.

Commissioners took heat for their non-decision, most of it unfair: It wasn’t as simple a story as a noble enterprise butting up against bureaucratic rules. The issue went beyond the scope the DAV was willing to peer through.

Penny Arcades are big in Florida. Just like slots, they feature video machines with spinning icons that gamers try to stop to make matching sets. They bet (or “pay”) pennies at a try. If they win, they don’t get a bunch of coins jangling into a metal bucket, but they do get money slightly disguised as gift cards to local merchants. It’s small-stakes gambling, with bets and pay-outs, though the Florida Arcade Association works extremely—and exploitatively—hard to compare the gaming to children’s arcades like Chuck E. Cheese, even though, as in a casino, no one under 18 is allowed into “penny arcade” gambling halls.

And the Florida Legislature has worked just as hard to play along with the deception, saying the games are allowable as long as they rely on skill, not chance. Whether they do or not is vastly open to question, since they wouldn’t be profitable if they relied exclusively on skill. Of course chance is involved. But some skill is involved, too, however slight the degree of skill is programmed into the machine. Between the Legislature and the Florida Arcade Association, the Chuck E. Cheese loophole has enabled these pseudo-gambling halls to flourish.

They have. Their names, as listed even by the Florida Arcade Association, dispel the myth that they’re not gambling halls: Kings Club Casino, Casino Royale, Little Vegas, Illusion Arcade, JackPots Arcade, Pharaoh’s, Viva Las Vegas, the Lucky Duck, The Spin Depot, Gold Rush Arcade, and so on. But these things operate in commercial zones, especially in strip malls, and from time to time they attract the state attorney’s attention to ensure that they are within the loophole.

When Flagler Beach’s Disabled American Veterans came before the city commission to ask permission to put in one of those halls in its facility at 208 South 6^th Street, the organization was well prepared—not only to make its pitch, but to pull on commissioners’ emotional strings, and to play the disabled veterans card: these are the men, after all, who’ve risked their lives and left parts of themselves on battlefields in their nation’s name. Disabled American veterans chapters, established by an act of Congress, provide a good service to communities, shuttling veterans to doctors’ appointments, running a food pantry and providing free lunches on Wednesdays. The 435-member organization in Flagler Beach started in 1976. It’s one of 70 such organizations around the state—down from 133 a quarter century ago. Just 30 of those chapters have homes of their own, such as the one in Flagler Beach.

The chapters are closing down fast because membership is down despite the recent wars, as World War II, Korea and Vietnam War veterans have been dying, the economy is bad, and bingo just isn’t making the money it used to. To stay open, chapters have turned to opening up penny arcades, and the Florida Arcade Association has jumped to attention, fighting the DAVs’ fight: fighting for veterans is good publicity.

Flagler Beach’s DAV came armed with the best in the business: Frank Mirabella, who’s not only a DAV member himself, but a lobbyist for the Florida Arcade Association, and a principal in the for-profit form Florida Gamco Inc., which runs those pseudo-gambling halls and takes 6 percent of all revenue. So Mirabella was wearing many different hats, one of them potentially very profitable, when he appeared before commissioners to plead the case of the disabled veterans.

“We’re here today with our hat in our hand, asking you for some special help,” Mirabella said. “We’re in the business since 2006, we have chapters that are in financial difficulty, and nothing else works, and they’re heading for receivership. We come in and we do a survey. We see if the demographics might possibly work if you put in an arcade amusement center. Arcade amusement centers have been authorized by Florida law since 1984. They’ve been authorized for truck stop arcades since 1987. Most of you might be familiar with them if you’ve been to a Chuck E Cheese or a Dave and Busters.” Mirabella was not speaking as a man too familiar with Flagler Beach, which tends to avoid the truck-stop feel. But he stressed: “It’s not gambling,” nothing that “nobody’s going to lose a bunch of money, nobody’s going to win a bunch of money in this activity”—except, of course, Florida Gamco.

He was asked why state law requires such facilities to have a minimum of 50 machines. “They didn’t want the machines on the corner grocery stores, in the 7-Elevens and that sort of thing. They wanted them confined,” Morabella answered revealingly: they wanted them confined for a reason. These aren’t candy stores. They’re slot machines with a twist.

Mirabella persisted. “If we can’t get some special help,” he said, “we’re going to  have to go into receivership and lose this facility and this community is going to lose these vital services. If somebody’s got a better idea than a penny arcade, they need to tell us. But you’re the last hope we have.”

The DAV wasn’t asking for a small favor, but for a full exemption from the city’s zoning ordinance, to operate the “arcade” from 9 a.m. to midnight, and even to use a city parking lot as part of its parking spaces (it has just 30). The way Mirabella put it was that Flagler Beach’s zoning ordinance is just too harsh, and goes beyond state rules.

Flagler Beach’s city attorney didn’t buy it. “That is a home rule issue not a state issue. The state has its hands off with zoning,” Virginia Cassady said, speaking to commissioners. “The state regulates restaurants, schools, attorneys—I’m regulated by the Florida Bar—doctors, etc. But it’s the local governments that regulate zoning, as you know. Here, you have chosen to put adult arcades amusement centers into general commercial zoning as a special exception. So in order to legally allow the arcade in its current address, “you would have to amend your entire code,”  as well as eliminating other regulations, including the prohibition on an arcade within 1,000 feet of a residential area, and the prohibition of operating it past 9 p.m. “Of course you have to look at it globally rather than just for the DAV, because that is the way the law works. It’s the law for everyone, and not just for one.”

That’s the issue commissioners seized on: what gave veterans a status that other concerns, including businesses, couldn’t exploit down the road?

Commission Chairman John Feind said he supported the veterans group, but also that he was the one who two years ago requested that the zoning ordinance be revised to be more restrictive. “And now I’m put in a position of, as much as I would like to, I can’t really say well, I’m going to just change my mind for the DAV. As much as I would really like to, I can’t do that,” he said. That would mean any building in a medium density residential area could open a commercial or arcade venture. “I don’t think that would be acceptable,” Feind said.

Ron Vath said: “To me, I supported the ordinance very strongly when it was brought up. The type of community we live in, I just don’t see how we can hammer this square peg into a round hole. The folks in the neighborhood, they’re single family, two family houses, you’re going to have traffic all hours of the night up until 12 o’clock, clattering clanging, fine you could use our lot, but that may defeat the reason we purchased it—to have a lot of visitors, tourists using it. That would be another downside. I just don’t see how we can make an exception just for you folks.” Vath added:  “I really think this would be a mistake to grant this, although it does hurt me. I know you guys desperately need the help but I don’t think in the global sense, for the whole city, would be something that would be welcomed.”

Commissioner Jane Mealy, speaking as the treasurer of the Flagler Women’s Club—the only other organization in the city with a non-profit exemption to operate in a residential area—said her organization is constantly struggling to stay afloat, but that it runs three fund-raisers a month to do so. It would not think of being in such a thing as a penny arcade to make ends meet, in deference to the neighborhood (which, Mealy said, has its share of complaints about the traffic around the club’s property).

It was clear, when Feind opened the floor to the public, that the commission wouldn’t go for the exception.

Dennis Hughes, a combat veteran, said the resistance to the DAV’s request was politically motivated.  He was among several veterans who spoke bitterly of the commission’s position. When you send somebody into combat, they don’t say no no no,” Hughes said. “We had a medal of honor winner. He didn’t say no no no. He went and did his job. There’s no such thing as no.” But Flagler Beach is not Afghanistan, and South 6^th Street is not the Korengal Valley (where Army Sgt. Salvatore Giunta’s valor earned him the medal President Obama awarded him his week). It’s a residential area, presumably terrorist-free, that commissioners have been elected to represent and protect based on the ordinances they passed.