Florida Senate committee approves ban on Internet cafes

TALLAHASSEE — The owners of Internet cafes and adult arcades who operate electronic sweepstakes machines were dealt another blow Monday as a Florida Senate committee followed the House lead and passed legislation to effectively ban them.

The move comes less than a week after a federal and state investigation led to the arrest of 57 individuals in Florida and five other states on racketeering and corruptions charges linked to gaming centers run by the Allied Veterans of the World, a purported charity that gave only 2 percent of its proceeds to veterans.

The fallout prompted the resignation of Lt. Gov. Jennifer Carroll, who as a state representative also ran a public relations consulting company that represented Allied Veterans, and has increased scrutiny on the chairman of the Senate Select Committee on Gaming, Garrett Richter, R-Naples.

Richter, a retired banker and investor, had never served on a gaming committee before he had taken the post, but he acknowledged Monday that he is good friends with Dave Ramba, the lead lobbyist for one of the Internet cafe chains, and last year flew to the Kentucky Derby with Ramba on a plane provided by Ramba's client, D. Bradly Olah.

Richter said that he has never spoken to Olah for "more than 60 minutes" and while he considers Ramba a friend "not once has David Ramba ever come to me and said anything about any gaming legislation."

Richter's committee unanimously passed the bill that clarifies the law to outlaw the electronic sweepstakes machines used by Internet cafes. The vote came after more than a dozen owners and patrons of the popular centers pleaded with lawmakers to regulate, not ban the machines. They warned that an estimated 13,000 people employed by the industry could lose their jobs.

"Game rooms help our operations,'' said the Rev. Bob Caudill, a Catholic priest who runs the soup kitchen at the All Saints Catholic Mission in Oakland Park. "We don't take government money — aren't you happy we don't take your money — but we do need the revenues from our bingo operations."

Richter emphasized that the goal of the legislation was not to shut down legal games, but that advances in technology had led these operators to shift from traditional bingo and sweepstakes games to electronic ones that, police say, now operate like online slot machines.

"The events last week made two things very clear,'' he said. "One, that we could not wait another year to address Internet cafes. Two, instead of a moratorium we need an outright ban."

He said the current bill clarifies that "gambling is illegal in Florida unless it's legal." Also affected by the new language will be the online slot machine software used in adult arcades and maquinitas.

But owners of adult arcades urged the Senate committee to carve out a clearer exception for them. Under the bill, the so-called adult arcade may only offer games of skill and may not give patrons rewards valued at more than 75 cents, changes that they said would force them to close their doors.

"We never were operating as a gambling hall,'' said Jason Fischer, of Play it Again Arcade in Davie. "We pay our taxes and operate legitimately under the law."

The requirement that people will have to cash in after every game, and no longer accumulate credits, will hurt their customers, he said. "A 90-year-old woman will not understand this concept,'' Fischer said.

Several members of the American Legion and Veterans of Foreign Wars, whose organizations have benefitted from the charitable donations from the for-profit gaming operators, urged the committee to leave the loophole that allows the games to escape regulation if they operate on behalf of a nonprofit.

But senators were clear they saw abuses.

"We are not attempting to close down any of these legitimate business models,'' Richter said. "We are attempting to close down illegitimate businesses that operate and sound like a gambling operation. If it's a duck, we're calling it a duck. They are illegal."

Sen. Maria Sachs, D-Delray Beach, said she will attempt to refine the bill when it comes up before another committee to shield the adult arcades from the bill. The House measure is expected to come to a floor vote on Wednesday. The Senate plans to review it for at least another week.

Meanwhile, investigators said Monday they have seized $583,507 in cash from the suspects, located more than $100 million in their bank accounts, obtained 400 computers, and 59 vessels and vehicles.

Law enforcement said the crackdown on Allied Veterans is the "first wave" of Operation Reveal the Deal, which targets illicit slot machine operators who exploited a loophole in the state's sweepstakes laws.

The Allied Veterans affiliates contributed huge sums of money to elected officials, estimated at close to $1.3 million, and elected officials are attempting to distance themselves from the money.

Rep. Steve Crisafulli, R-Merritt Island, announced Monday that he would be returning the cash he and his political committees have received and urged his colleagues to do the same.