comscore In Florida, worries about 'convenience casinos'
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In Florida, worries about ‘convenience casinos’

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APOPKA, Fla. » A drab strip mall in this city north of Orlando includes the usual fixtures: a pharmacy and a payday loans store, as well as an Internet cafe with a sign on the door that reads "Copy-Fax-Print, Surf the Web."

That these cafes are cash machines — and take in as much as $100,000 a week — is no secret to robbers.

And so, at 1 a.m. on April 19, three armed men tried to rob the place at a time when more than three dozen people were playing slot machine-type games on the cafe’s computer terminals. A security guard shot and killed one of the men; the other two fled and were being sought. A woman hiding in the cafe bathroom told a 911 operator that the robbery was happening in "the casino, in Apopka."

The shooting death in a place that some customers call a casino has brought fresh scrutiny to Florida’s quickly multiplying "Internet sweepstakes cafes," which now total nearly 1,000 statewide and are estimated to gross more than $1 billion this year, according to industry analysts, state legislators and their aides and lawyers in the gambling industry.

It has also renewed calls by several county sheriffs for a statewide ban on the cafes’ games. They say the businesses are magnets for crime because they usually have large sums of cash on hand. Since nine sweepstakes cafes have opened in Seminole County, crimes at those addresses have increased 14 percent, according to data compiled by the sheriff’s office.

A bill was brought before the state Legislature this session that would have prohibited the games. Its proponents cite a host of concerns — worries about crime, compulsive gambling and morality. But the bill was rejected after a lobbying campaign by the companies that franchise some of the cafes. It did not help, industry critics say, that two state legislators own Internet sweepstakes cafes themselves.

Labeled by critics as "convenience casinos," the cafes offer computerized "sweepstakes" games to customers who buy Internet time or phone cards. "Points" can be redeemed for cash, and jackpots are as high as $15,000, employees said. Lawyers for the owners have likened the slot-like and video poker games, with names like Cobra Cash and Fruit Paradise, to the Monopoly prize cards offered by McDonald’s restaurants.

The cafes operate in a legal gray zone in Florida and a dozen other states. Several Florida sheriffs have raided the cafes, arguing that the computer games, operated via the Web, are nothing more than a vaguely disguised form of illegal gambling.

In January, the Seminole County Commission passed a law banning the Internet cafes, but a federal judge issued a temporary order that stopped the county from enforcing the law while its constitutionality was considered.

"I just want clarity," said Sheriff Jim Coats of Pinellas County, whose department has written to cafes ordering them to shut down within 30 days or face prosecution. "The Legislature ought to make the law clear. If someone goes in there and utilizes these machines and pays by cash, where does that cash go? No one knows. We need regulation."

In the capital, Tallahassee, several legislators introduced bills to ban the games, but none passed during the two-month session, which ends this week. State Rep. Scott Plakon — who is from Seminole County, where the armed robbery occurred at the Allied Veterans Internet Cafe No. 67 — introduced one of the bills.

"Owners say people use these places to check their emails, but everyone is gambling," Plakon said. "These places are making a huge amount of money."

April Kirsheman, the general counsel of the Seminole County Sheriff’s Office, said: "It’s just a facade that this is something other than gambling. As far as we are concerned, these are illegal, and we welcome the opportunity to try to prosecute these places."

The cafes’ owners and their lawyers and lobbyists insist the games are legal under a 1971 state law that allows businesses to offer sweepstakes in exchange for the purchase of products.

"The images that are used on the computer look like a slot machine, so some people mistakenly call it a casino," said Kelly B. Mathis, a Jacksonville lawyer for Allied Veterans’ 37 cafes in Florida. "But it’s not a casino, and it’s not illegal gambling. It’s not gambling at all — it’s a sweepstakes."

The legal distinction is that sweepstakes winners are predetermined and not decided in a game of chance like those played with a roulette wheel or a roll of the dice.

Around the country, legislatures and the police are wrestling with the games’ legality. Virginia’s Legislature recently outlawed them. Similar moves have been made in statehouses in North Carolina and Massachusetts.

In Florida, the high-margin games have lured several lawmakers into the business. Peter Nehr, a Republican state representative, has opened his own sweepstakes cafe, Fun City Sweepstakes, on Route 19 in Palm Harbor, northwest of Tampa.

Early on a recent morning, the cafe, sandwiched between a billiards hall and a massage parlor, was catering to 10 elderly patrons who sat grimly in front of terminals, playing slots and poker games. A large red sign on a back wall says, "Attention Customers: Please be advised this is not a gambling establishment."

Nehr had intended to introduce a bill this session that would allow the games but establish statewide regulations. But then he decided against it, choosing instead to go into the business in November.

Nehr did not respond to several phone messages. But last month, he told The St. Petersburg Times, which first reported on his new venture, that his cafe was a "legitimate business" and was "completely legal."

In an interview, Coats said he was considering sending Nehr a letter demanding that he shut down his Internet cafe within 30 days, saying the games are a form of illegal gambling. In June 2009, Pinellas County sheriff’s deputies raided a sweepstakes cafe at the same address as Nehr’s Fun City Sweepstakes, confiscating 40 computer terminals and $1,500 in cash.

Mike Bennett, a Republican state senator from Bradenton, has also entered the business. He is part-owner of the Ellenton Ice and Sports Complex in Ellenton, which includes a sweepstakes cafe. An employee who declined to give his name said a new room with 15 computer terminals would soon allow players to buy phone cards, which they use for computer time, and try to win points redeemable for cash.

Bennett said he was not sure if he owned the cafe, although he confirmed being a part-owner of the complex in which it was housed.

"I know I haven’t made any money on it," he said with a laugh. In any event, he added, "I don’t see this kind of cafe as any kind of expansion of gambling. There is already so much gambling in this state. I can go to the local Catholic church tonight and play bingo and win cash. It’s everywhere."

Sheriffs said they were frustrated that no one had been convicted of offering the sweepstakes games. In Ocala in 2009, a criminal court judge dismissed the trial of an Internet cafe owner, concluding that prosecutors had failed to prove that the sweepstakes games were illegal.

"The judge threw out the case and apologized to the jury for having to sit through it," said Mathis, the Allied Veterans lawyer.

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