Thursday, December 14, 2017
Business

A year after restrictions imposed, some Internet cafes have adjusted, held on

SPRING HILL — Up and down U.S. 19, the signs serve as reminders of just how popular Internet cafes were at one time in Hernando County. Sunrise Internet Lounge, K&K Sweeps, Win City — all were busy destinations for seniors looking for cheap daytime entertainment and a chance to pocket a few bucks, just for sitting in front of a computer and pressing buttons.

More than a year after Gov. Rick Scott signed into law a bill that imposed new restrictions on Internet games and limited prize payouts, nearly all of the cafes remain shuttered, their equipment sold off by owners who had only a few days' notice before the law went into effect. However, a few have hung on in the hope that a new operating model will still bring in enough revenue to keep the doors open.

Terry Kasberg, owner of Spinners, an Internet cafe located in a half-abandoned strip mall on U.S. 19, said that since reopening a year ago he's managed to do better than expected. Nearly all of his original customers returned. Others, whose favorite game rooms are no longer open, have been coming in, as well.

Customers can still purchase Internet time to play games on computer terminals, and gain additional time depending on the number of points they accrue. Like before, they are offered complimentary food, soft drinks and coffee — and sometimes entertainment.

And while business is not as robust as it was when Kasberg was paying out cash prizes, customers like Mabel Bowen, 90, say they simply enjoy having somewhere to go where they feel pampered and welcome.

"Terry's very good to us here," Bowen said as she worked a game at one of Spinners' four dozen terminals while soft oldies music played in the background. "He treats everyone like they're his family."

In the weeks leading up to the ban, Kasberg emerged as a vocal advocate of sweepstakes cafes and led a petition rally outside his business to drum up public support to reverse the ban. When the law went into effect, he, like other operators, chose to shut down and wait to see what legal options were available.

Although Kasberg has dialed back his activist role, he still believes that Tallahassee is out of touch, saying that allowing a well-regulated adult sweepstakes industry would create not only good jobs, but also a lot of tax revenue for the state.

"I don't think any of the owners would object to being regulated," Kasberg said. "But we've never had our voices heard. The (lawmakers) simply decided to ignore us."

Ed Walls, owner of the New Treasure Chest at U.S. 19 and County Line Road, said that the lack of interest in regulating the cafes allowed them to proliferate and invite unsavory operators such as Allied Veterans of the World, a St. Augustine-based charity organization that used its cafes to raise money. The business was at the center of a three-year federal and state investigation that alleged it bilked customers and donated only $6 million of the $300 million in revenue it collected.

"We all got lumped in with them, and we all got punished," Wall said.

The bill signed by Gov. Scott addressed a gray area in state gambling laws that allowed the sale of Internet access to patrons to play virtual "arcade" games for prizes. Internet cafe owners called them "sweepstakes" games, but many law enforcement officials considered them the equivalent of illegal slot machines.

State Sen. Wilton Simpson, R-Trilby, who voted for the ban, said it seemed at the time to be the best way to gain control over a nonregulated industry that had become rampant with fraud and abuse. But while he welcomes more dialogue on gaming issues, he doesn't believe much action will occur until the Scott administration works out a new compact with the Seminole Tribe, which has exclusive rights to the state's casino interests.

Simpson said that establishing a state gaming commission to oversee casino gambling, parimutuel gaming and the lottery would be preferable to leaving gaming solely in the hands of lawmakers.

"There needs to be a way to take the politics out of it and have experts who know all the ins and outs of it," Simpson said.

While not a fan of Internet cafes, he believes that owners such as Kasberg and Walls should have their voices heard when it comes to regulating their industry.

Kasberg, however, said he has yet to see evidence that lawmakers are ready to overhaul gaming laws. In November, he attended a legislative workshop in Tallahassee that was part of the state's $400,000 gambling impact study. Among those invited to speak were representatives from dog and horse racing concerns, law enforcement, as well as experts who spoke of social concerns surrounding gambling. Only he and one other person spoke about Internet cafes.

In his 10-minute presentation, Kasberg said that allowing the gaming industry to be dictated by large interests such as the Seminole Tribe and corporate casino interests created an uneven playing field that totally shuts out smaller operations. If the state were willing to give a little, he said, it would get a lot in return.

"My customers aren't going to the Hard Rock (Casino) because it's too far for them to drive," Kasberg said. "But some will take a bus to Biloxi to gamble, and every time they do, the state loses out on that revenue. It doesn't make sense to me."

Kasberg has ideas of his own that he would like to propose to lawmakers, including giving Internet game players the chance to win Florida lottery tickets through the points they accrue while playing. Doing so, he said, perhaps would bring a legitimacy to the cafes.

"It would be highly regulated, and the state would be getting revenue from it," he said. "I don't see that being anything but a win-win for everyone."

Logan Neill can be reached at (352) 848-1435 or [email protected]

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