Wednesday, January 17, 2018
Business

Gov. Rick Scott signs Internet cafe ban into law

CLEARWATER — John Shaa sat in his office Wednesday, waiting for the call from his friend in Tallahassee. Shaa, owner of That Great Place Internet Cafe in Clearwater, couldn't bear to watch the news. He was afraid it might tell him he had to close his cafe, his primary source of income, and lay off 12 people.

Shaa's fears were realized when Gov. Rick Scott signed a bill that bans Internet sweepstakes cafes in Florida.

"My employees have families to feed. Many are over 50, making it hard for them to find work in this economy," Shaa said. "One man was looking for a job for four years before I hired him And just like that, they're all out of jobs."

With no fanfare, the governor signed HB 155 in the privacy of his Capitol office. The law was effective immediately, giving law enforcement new definitions on illegal gambling machines.

The legislation came in response to a three-year federal and state investigation into illegal gambling at Internet cafes affiliated with Allied Veterans of the World, a St. Augustine-based organization. The arrest of 57 owners and operators associated with Allied Veterans put pressure on Florida legislators to move with record speed to outlaw the gaming machines.

Authorities allege that Allied Veterans and its affiliates collected $300 million in revenue but donated only $6 million to charity. Former Lt. Gov. Jennifer Carroll resigned in the wake of the investigation. She had once worked as a consultant for Allied Veterans and resigned, she said, to avoid becoming a distraction to the governor.

"I think the House and Senate did the right thing to crack down on illegal gaming, especially in light of the Allied Veterans multi-state criminal conspiracy,'' Scott told reporters Wednesday.

Scott would not respond to questions about the 14,000 people who are expected to be put out of work because of the law. "I have a jobs agenda,'' he said, urging the Legislature to pass his proposal for eliminating the sales tax on manufacturing equipment, one of his two priorities this session.

The Florida Arcade Association fought the Legislature's attempt to include its arcade devices in the crackdown.

"With the stroke of the governor's pen, thousands of jobs were lost today," said Gale Fontaine, the association president. "With all the effort that is put into this state to create jobs, it is unconscionable that the state is acting to put people in the unemployment line."

Arcade machine manufacturers say they will challenge the law and are seeking ways to retrofit the machines.

For the past three weeks, owners of Internet cafes and adult arcades have been dismantling equipment and laying off workers in anticipation of the bill signing. Florida has an estimated 1,000 Internet cafes and more than 200 adult arcades.

Shaa and other Tampa Bay owners rallied patrons to write Scott letters and jam his email in-box in a futile effort to save the cafes, which are especially popular with retirees. Customers buy Internet time that gives them access to sweepstakes games, with winnings paid in cash. While played on a computer screen, the games resemble casino slot machines.

"We come to relax and meet people," said Gayla Larkin, 72, playing a game of "Safari" Wednesday at That Great Place. "We're not drinking. We're not smoking marijuana. This is a social community. Clean fun."

Larkin said government should regulate, not eliminate, her favorite hangout, where Coke and brownies are often served free. She wrote the governor an email asking, "Don't you have bigger fish to fry?"

Pam Schmelzer, the cafe cashier, said the business is not affiliated with Allied Veterans. No customer has been scammed, she said, and no charity has been cheated.

"They gave us a bad name, but I believe all we do is help people," she said. "One customer told me the Internet cafe is better than therapy. She can break away from reality for a while, spend about $20 and return to her family refreshed. Now, tell me, how is this hurting anyone?"

The duty of enforcing the law lies with local law enforcement.

A spokesperson for the Hillsborough County Sheriff's Office said deputies will give warnings before arresting anyone. The Clearwater Police Department will inspect any open cafes and tell owners what's legal before making any arrests.

Phyllis Andrew, a cashier at Busch Sweeps in Tampa, said her location may reopen by switching from sweepstakes to bingo.

"A lot of people will lose their jobs," Andrew, 43, said, "and a lot of people won't have places to go for extracurricular activities."

At Lucky Charmz on Florida Avenue in Tampa on Wednesday, owner Adam Keeble said he has been in touch with the Tampa Police Department and hopes there will be a grace period before cafes are forced to close down.

"It's just a sad day," he said.

After learning the governor had signed the bill, Shaa called employees at his cafes in Clearwater and Largo.

"We have to do it," he said. "We have to shut down. I don't want to go to jail."

He told the staff to hang "closed" signs on the doors. He said to let patrons finish one last game.

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