Gulfstream Park says it is the “victim” in the fraudulent use of free spin cards by casino employees in 2007 and will “vigorously” fight the $800,000 fine levied by the state as both “excessive” and unfair.

Late Friday (Aug. 21), the state Department of Business and Professional Regulation’s Division of Pari-Mutuel Wagering announced the fine after a two-year investigation of the misuse of test cards by employees. It concluded Gulfstream was lax in overseeing the use of the cards. The cards, normally loaded with $5 in slot play, had been loaded with hundreds of dollars which employees then used to ‘win’ over $200,000. The state says Gulfstream had no system in place to control the use of the test cards.

“The facts are simple. It was the company’s diligence that brought this matter to the attention of state regulators,” said Marc W. Dunbar, Gulfstream Park’s attorney.  “Unscrupulous employees gamed the system -- a system, which the Division of Pari-mutuel Wagering had affirmatively endorsed as evidenced by its approval of Gulfstream’s internal controls, its organizational chart, its licensing of the unscrupulous individuals despite criminal histories which were unknown to Gulfstream, and authorizing the system of free play and the procedures for its use.”

“Gulfstream Park was the whistleblower here,” Dunbar added.

A slots technician pleaded guilty to fraud and is serving 30 months’ probation. Other employees were fired or suspended.  And a slot player who was part of the scheme pleaded guilty to theft and served a year of probation.

The state’s proposed fine is $100,000 on each of eight counts.

“A proposed fine of this nature is excessive and unprecedented in this state or any other casino jurisdiction in the country,” Dunbar said, indicating fine of $5,000 to $10,000 are more common.

The next step is an administrative hearing.

The fines were part of a bad run of news for Gulfstream.

Separately, the state’s Department of Law Enforcement found Gulfstream owes $144,000 in back taxes.

And Gulfstream’s parent, Magna Entertainment, is mired in a bankruptcy proceeding that involves charges of inappropriate financial dealings between Magna and its parent, MI Developments, aimed at sheltering assets from creditors. An auction of some Magna assets, so far not including Gulfstream, is planned for September.