PHIL C. FROUG, APPELLANT,
v.
CARNIVAL LEISURE INDUSTRIES, LTD., APPELLEE
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A Florida appellate court reversed a judgment enforcing a $50,000 casino gambling debt, holding that Florida Statutes Section 849.26 renders all gambling debts unenforceable in Florida courts regardless of where the gambling occurred or whether it was legal there.
The court held that gambling debts are unenforceable in Florida courts under Section 849.26, regardless of whether the gambling was legal in the jurisdiction where it occurred. The adoption of a state lottery did not change Florida's public policy against gambling debts because the electorate expressly rejected casino gambling while approving the lottery.
[1] Gambling debts incurred in foreign jurisdictions are unenforceable in Florida if they are contrary to Florida law and public policy.
[2] Florida Statutes Section 849.26 renders void and of no effect contracts, notes, or other securities where the consideration is money won or lost in a gambling transaction…
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Join FLexlaw to unlock all legal intelligence“All promises, agreements, notes, bills, bonds or other contracts, mortgages or other securities, when the whole or part of the consideration if for money or other valuable thing won or lost, laid, staked, betted or wagered in any gambling transaction whatsoever, regardless of its name or nature, whether heretofore prohibited or not, or for the repayment of money lent or advanced at the time of a gambling transaction for the purpose of being laid, betted, staked or wagered, are void and of no effect”
This is the statutory text of Section 849.26 that renders gambling debts void and unenforceable.
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Join FLexlaw to unlock all legal intelligencePhil Froug borrowed $50,000 from Carnival Leisure Industries to gamble at the Crystal Palace Casino in the Bahamas. Froug lost the entire amount and f…
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LEVY, Judge.
A debtor appeals an adverse final judgment for the collection of a gambling debt. We reverse because the underlying gambling debt is unenforceable in Florida as a matter of law.
Phil Froug borrowed $50,000 from Carnival Leisure Industries, Limited, with which to gamble at Carnival’s Crystal Palace Casino in the Bahamas. Froug lost all $50,000 gambling, but failed to repay the loan. Carnival sought to collect the debt by filing suit against Froug in Dade Circuit Court. In defending the suit, Froug relied on Florida Statutes, Section 849.26 (1991), which states:
All promises, agreements, notes, bills, bonds or other contracts, mortgages or other securities, when the whole or part of the consideration if for money or other valuable thing won or lost, laid, staked, betted or wagered in any gambling transaction whatsoever, regardless of its name or nature, whether heretofore prohibited or not, or for the repayment of money lent or advanced at the time of a gambling transaction for the purpose of being laid, betted, staked or wagered, are void and of no effect; provided, that this act shall not apply to wagering on parimutuels or any gambling transaction expressly authorized by law.
Carnival was allowed to recover the amount of the debt plus interest. Froug now appeals, and this case presents for our consideration, once again, the issue of whether a creditor can recover legally incurred casino gambling debts in Florida courts, or whether such a recovery is barred because of Section 849.26.
In interpreting Section 849.26, “Florida courts have consistently held that gambling obligations, even if valid in the state in which they were undertaken, are unenforceable in Florida as contrary to law and public policy.” Barquin v. Flores, 459 So. 2d 436, 436-37 (Fla. 3d DCA 1984). See § 849.26, Fla.Stat. (1991); Carp v. Florida Beal Estate Commission, 211 So. 2d 240, 241 (Fla. 3d DCA 1968), writ discharged as improvidently issued, 219 So. 2d 427 (Fla.1969); Dorado Beach Hotel Corp. v. Jernigan, 202 So. 2d 830, 831 (Fla. 1st DCA 1967), appeal dismissed, 209 So. 2d 669 (Fla.1968); Young v. Sands, Inc., 122 So. 2d 618, 619 (Fla. 3d DCA 1960). These authorities compel reversal of the judgment obtained below.
Despite this, Carnival argues that in the time since Barquín was decided, the electorate of Florida has adopted a state lottery, which demonstrates a change in the public policy of this state in favor of gambling. Carnival claims this change requires us to allow recovery of debts, such as the one at issue here, which are incurred in the course of legalized gambling. In making this argument, however, Carnival fails to acknowledge the many fundamental differences between a state run lottery and a privately operated casino. Moreover, Carnival overlooks the fact that the electorate expressly rejected casino gambling by a two-to-one margin on the very same ballot which approved the state lottery. See Proposed Constitutional Amendment No. 2, Official Ballot, General Election, November 4, 1986 (rejecting casino gambling 2,237,555 to 1,036,250). Consequently, we do not recognize any change in public policy which would lead us to recede from the language contained in Barquín.
Additionally, we note that the majority of American jurisdictions follow a protective policy, similar to that of Section 849.26. See Annotation, Law of Forum Against Wagering Transactions as Precluding Enforcement of Claim Based on Gambling Transactions Valid Under Applicable Foreign Law, 71 A.L.R.3d 178 (1976). Even the Bahamas protects its own citizens, by making it illegal for them to enter a casino. See Ch. 351, § 49, Statute Law of The Bahamas (Rev.Ed. 1988).
Reversed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Carnival Leisure Indus. Ltd. v. Arviv, 655 So. 2d 177 (Fla. 3d DCA 1995)…btor, Phil C. Froug, to collect on a similar Crystal Palace gambling debt.1 In the Froug case the circuit court ruled that section 849.26, Florida Statutes, did not bar the collection of the gambling debt. See Froug v. Carnival Leisure Indus., Ltd., 627 So. 2d 538 (Fla. 3d DCA 1993). The court entered judgment in favor of Carnival, and Froug appealed. Meanwhile, Carnival’s suit against Arviv remained pending. Because the interpretation of section 849.26 was the dispositive issue in both cases, the trial cour…
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Carnival Leisure Indus., Ltd. v. Holzman, 660 So. 2d 410 (Fla. 4th DCA 1995)…ant action, two of the prior suits reached the appellate courts and this court and the Third District issued opinions in Carnival Leisure Industries, Ltd. v. Herman, 629 So. 2d 882 (Fla. 4th DCA 1993), and Froug v. Carnival Leisure Industries, Ltd., 627 So. 2d 538 (Fla. 3d DCA 1993), respectively. In both Froug and Herman, the courts reiterated the well established rule that foreign gambling obligations, although valid where created, are unenforceable in Florida pursuant to section 849.26, Florida Statutes (1…1 / 2
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Manshum v. Carnival Cruise Lines, Inc., 721 So. 2d 448 (Fla. 3d DCA 1998)
Authorities Cited
- Huey T. Young v. Sands, Inc., 122 So. 2d 618 (Fla. 3d DCA 1960)
- Dorado Beach Hotel Corp. v. Jernigan, 202 So. 2d 830 (Fla. 1st DCA 1967)
- Carp v. The Fla. Real Est. Comm'n & Cornelius L. Reagan, 211 So. 2d 240 (Fla. 3d DCA 1968)
- Barquin v. Orestes Flores and Jose Flores, 459 So. 2d 436 (Fla. 3d DCA 1984)
- Hanks v. Wainwright, 209 So. 2d 669 (Fla. 1968)
- Rewis v. State, 209 So. 2d 669 (Fla. 1968)
- Carp v. The Fla. Real Est. Comm'n & Cornelius L. Reagan, 219 So. 2d 427 (Fla. 1969)
- THE Florida BAR v. Pitts, 219 So. 2d 427 (Fla. 1969)