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PolitiFact Florida | St. Petersburg Times
Sorting out the truth in state politics

PolitiFact: Internet sweepstakes cafes not found to be completely legal

State Rep. Peter Nehr is at odds with Pinellas County Sheriff Jim Coats over whether an Internet sweepstakes cafe the lawmaker has opened is against the law.

Nehr's business, Fun City Sweepstakes, sells phone cards.

But as the St. Petersburg Times reported Wednesday, for every $1 a person spends on a card, he or she also gets 100 sweepstakes points to use at one of the business' 45 desktop computers. The computers can simulate the spinning images of a casino slot machine. You spin, and win, or lose. If you win, you can collect the winnings from the cashier.

Coats says he believes the sweepstakes businesses constitute gambling.

But Nehr, a Republican who represents northern Pinellas and a sliver of Pasco counties, disagrees.

"This is a legitimate business that has been vetted and found to be completely legal in the state," he told the Times. "I'm entitled like anyone else to open a legal business to earn money for my family."

Nehr sounded so sure about his business — saying that it "has been vetted and found to be completely legal" — that we wanted to check it out.

Our analysis concludes the law is murkier than Nehr lets on.

Loophole or illegal?

Gambling is currently illegal in Florida except in places where it is specifically permitted — dog and horse tracks and on American Indian land. Nehr's business, and others like it across the state, operate not as gambling businesses but instead offer promotions for purchasing a service.

Nehr says it's like McDonald's restaurants that sell sodas with a scratch-off, or Monopoly tickets.

But in the case of Fun City Sweepstakes, Nehr gives customers who purchase a phone card an opportunity to win a casino-style sweepstakes game.

In 2007, the police chief of Cedar Grove, near Panama City, wrote to then-Attorney General Bill McCollum about a similar sweepstakes parlor to ask whether the business was violating state gambling laws as set out in state statutes.

McCollum responded, basically, that it's not clear.

McCollum wrote that the computer could constitute a gambling device and be illegal, or businesses may be illegally disguising gambling as legal "game promotion."

"However, this office recognizes that the ultimate determination of whether Florida's gambling laws may have been violated must be made by local law enforcement agencies," McCollum wrote.

The ambiguity has left law enforcement and prosecutors in a tough spot.

The fundamental question: Is it worth the time and effort and resources to prosecute a business that may or may not be breaking the law?

No convictions

So members of the Florida Legislature are considering legislation that would ban the type of business altogether.

Rep. Scott Plakon, R-Longwood, has sponsored HB 217 to prohibit the use of simulated gaming for promotional purposes. The legislative analysis of the bill says there are questions over the legality of the sweepstakes games, and that different counties have handled them differently.

There have been just a few cases involving Internet sweepstakes cafes brought to court. So far, no one has been found guilty of gambling charges.

In Marion County, the owners of an Internet sweepstakes cafe like Nehr's were found not guilty on gambling charges in October 2010, the Ocala Star-Banner reported Oct. 18.

"We're going to see if the state attorney gets the message," said Kelly Mathis, the Jacksonville attorney who represented the sweepstakes cafe owner. "They (prosecutors) put on their best case, and they still can't show there was a violation of criminal law."

Other cases in Marion, Brevard and Sumter counties were either dismissed or the business owners reached an agreement with prosecutors that did not include a gambling conviction. No case has been reviewed by an appellate judge.

Where does this leave us?

Yes, it's true that no one has been found guilty of a crime for running a business like Nehr's, and some in the Legislature are trying to make the games explicitly illegal. But that doesn't mean the games themselves have been found to be completely legal.

It's a stretch for Nehr to say the operation has been vetted and is completely legal. So we rate this statement Half True.

The statement

An Internet sweepstakes cafe is "a legitimate business that has been vetted and found to be completely legal in the state."

State Rep. Peter Nehr, R-Tarpon Springs, in comments to the St. Petersburg Times

The ruling

No one has been found guilty of a crime for running a business like Nehr's, and some in the Legislature are trying to make the games explicitly illegal. But that doesn't mean the games have been found to be "completely legal." We rate this statement Half True.

PolitiFact: Internet sweepstakes cafes not found to be completely legal 04/24/11 [Last modified: Sunday, April 24, 2011 10:15pm]
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