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Hillsborough bans machines at heart of Internet sweepstakes cafe industry

TAMPA — Seeking to stem a proliferation of Internet sweepstakes cafes, Hillsborough County commissioners voted Wednesday to outlaw machines used to reveal customers' winnings.

Commissioners voted 5-2 to ban "simulated gambling devices," which they say function much like slot machines and are at the center of a quickly spreading form of business in Florida.

In doing so, they sided with elected officials in other counties, such as Pinellas and Seminole, that have recently moved to crack down on the businesses.

Board members who favored the action say they could not wait for a Legislature consumed with resort-style gaming in South Florida to clarify rules about sweepstakes and sweepstakes cafes. They said they were obligated to act to halt what some estimated has fast become a $1 billion industry in Florida largely by preying on the elderly and the poor.

"I think it just boils down to what's good for our community," said Republican Sandra Murman, who with Democrat Kevin Beckner pushed for the ban. "They are predatory organizations that are unregulated and untaxed."

The vote came after a measure favored by the industry — a moratorium on new cafes until the Legislature acts or courts rule on their legality — failed 3-4.

Dozens of owners of sweepstakes cafes, their employees and attorneys turned out for the meeting, many wearing yellow T-shirts that read: "Don't shut down our Internet cafes." They waved signs reading: "Keep sweepstakes. Keep Jobs."

The meeting also featured testimony from an undercover deputy, wearing a black hood to shield his identity, who said he has visited many of the establishments.

The deputy told commissioners that employees of sweepstakes cafes unabashedly refer to their business as gambling operations. Their customers are invariably elderly, often lured by free food. He said he was even recruited to attend Wednesday's meeting in support of owners with the offer of a free ride and pizza.

The business typically work like this: Customers are sold phone cards or Internet access. They slide the cards into a computer terminal, with the screen showing what looks like a slot machine revealing whether they won money.

Owners say these are legitimate sweepstakes used to promote a legitimate product — phone cards or Internet access — the same way McDonald's restaurants issue game pieces to sell fries. Their attorneys told commissioners they had no right under state law to ban them.

"You've been given the wrong facts," said Kelly Mathis, an attorney for Allied Veterans, one of the largest groups in the sweepstakes cafe industry in Florida.

Employees of the businesses repeatedly said any move to ban the equipment would cost them their jobs in a perilous economy. They urged commissioners to stand up for small businesses.

"That means my family could be homeless," said Tonya Sipes, an Allied Veterans cafe employee, speaking to commissioners of the proposed ban. "What is your plan for helping us?"

But Paul Johnston, a senior assistant county attorney, told commissioners that many of the speakers were undermining their own cause with that line of reasoning. State law does allow sweepstakes if they are used to promote a legitimate product. They can't be the product that drives the business, he said.

"They're telling us they're going to go out of business if we ban these machines," Johnston said. "That wouldn't affect their business if their business was really to sell these phone cards."

Still, some commissioners expressed concern that the majority was acting prematurely. The cafes are the subject of litigation across the state, with one owner suing in Pinellas saying a crackdown by Sheriff Jim Coats against one business violated free speech rights.

"It's not our decision to make," said Republican Victor Crist, who along with Democrat Les Miller voted against the ban. "It's the courts' decision."

Also in attendance were about a dozen church leaders and activists, encouraged to attend by the socially conservative Community Issues Council. They talked of the ravages of gambling addictions and praised the vote afterward.

Hillsborough bans machines at heart of Internet sweepstakes cafe industry 12/07/11 [Last modified: Wednesday, December 7, 2011 11:51pm]
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