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Internet sweepstakes cafes say they will drop lawsuit against Hillsborough

TAMPA — A lawyer for four Internet sweepstakes cafes says his clients plan to drop a lawsuit challenging the constitutionality of a new Hillsborough County ordinance banning operation of simulated gambling devices used in their businesses.

"The plaintiffs that had been pursuing the suits have closed their operations, so they will not be pursuing the suit," said Lawrence Walters, a Longwood-based lawyer representing the cafes, declining further comment.

County officials say several other sweepstakes cafes also have closed their doors as code enforcement officers prepare to begin enforcing the law. Businesses that use the sweepstakes devices could soon be cited for code enforcement violations, subjecting them to fines of up to $1,000 a day for violations.

"I'm happy that they're gone," said County Commissioner Sandra Murman, who had pushed for the ordinance. "Quite frankly, we had too many of our elderly and disabled, and our veterans, that were going to these places. They've been spending their savings and pension checks. It wasn't good for anybody."

Dexter Barge, the county's director of code enforcement, said his officers likely will first go on an education campaign in coming weeks to inform remaining business operators about the law.

"A lot of them have already shut down," Barge said. "Just as we would do with any new ordinance, we want to make sure, with those places that are still open, that they understand we intend to enforce the ordinance … before we go in and start lowering the boom."

Sweepstakes cafes typically sell phone cards or Internet access, issuing the buyers sweepstakes entries with their purchase. The buyers can then use computers to play slot machine-type games and win cash.

Cafe owners in their lawsuit said they were selling a legitimate product — phone cards and Internet access — using the sweepstakes as a promotional tool. They likened it to McDonald's restaurants that give customers peel-off game pieces with purchases that allow them to win free or discounted Big Macs or fries.

The county contended in its lawsuit response that the sweepstakes were the focal point of the business, making them gambling operations.

The cafes began popping up at intersections and strip malls throughout Central Florida a couple of years ago. Governments around the region began taking notice and several passed ordinances to ban them or limit their operation.

Tampa City Council members in October approved a temporary, six-month ban on new Internet sweepstakes cafes as they consider crafting an ordinance.

In December 2011, county law enforcement officials estimated there were 30 sweepstakes cafes in unincorporated areas. That's when commissioners passed an ordinance banning use of the machines that were central to the businesses.

The initial county ordinance made offering "simulated gambling devices" a criminal offense. Four business owners filed the lawsuit saying the ordinance was a restriction on free speech and a violation of their equal protection due-process rights.

The companies that brought the suit are JWS Samuel, which ran Paradise Internet & Sweepstakes at 791 Cortaro Drive in Ruskin; H&W Enterprises, which ran Five Star Internet & Sweepstakes, at 430 W Brandon Blvd. in Brandon; Baystar Multimedia, which ran Happy Mouse Internet Cafe & Sweepstakes at 5537 Sheldon Road in Tampa; and Buckeye Telecom, which ran the Lucky Palms at 3710 W Waters Ave. in Tampa.

With the exception of H&W Enterprises, based in South Carolina, the others are Florida companies. Each used the same game software.

Hillsborough County commissioners recently amended their ordinance to make violations code enforcement offenses similar to an ordinance in Seminole County that has thus far withstood court challenge.

Times researcher John Martin contributed to this report. Bill Varian can be reached at varian@tampabay.com or (813) 226-3387.

Internet sweepstakes cafes say they will drop lawsuit against Hillsborough 11/12/12 [Last modified: Monday, November 12, 2012 11:26pm]
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