Lawmakers need to make a decision to either ban or regulate Internet sweepstakes cafes, or storefront casinos, an interim report from the Senate Regulated Industries Committee released this week states.
The confusion in the law has led to uneven enforcement across the state, as some counties choose to arrest operators and shut down the stores that offer Internet time for sweepstakes cards that are played out on computers featuring casino games. Others choose to regulate them and impose large fees and taxes.
"Based upon the findings in this report, Senate professional staff recommends that the Legislature not maintain the status quo. Local governments are passing inconsistent ordinances and law enforcement is similarly handling these businesses differently across the state," the report states.
Florida statute allows for businesses to conduct game promotions to help sell their service or product, but the law was written in 1971, before the prevalence of electronic devices and the Internet. The Internet sweepstakes cafes began cropping up across the state in 2006, and the number of stores in Florida is now estimated at 450 to 1,000.
Because the cafes sell Internet time along with the sweepstakes offer, the operators claim they are not breaking the law. Some law enforcement officials and other detractors of the stores, however, note that the “game promotion” is the main factor driving in customers – without the sweepstakes and casinolike games (even though the outcomes are predetermined and one’s skill in playing makes no difference to whether or not they win), no one would buy the Internet time.
There is no license required to operate the cafes, but those offering total prize packages of $5,000 or more are required to register with Department of Agriculture and Consumer Affairs. According to the report, the department has eight Internet sweepstakes cafes registered there, and the department does not visit or investigate the stores for compliance with regulations on game promotions.
“This really gets to the heart with what’s wrong with the existing law and why it needs to be fixed. There are some who have registered with our department as a charity and I guess all have to register as a sweepstakes,” said DACS Commissioner Adam Putnam, who joined Attorney General Pam Bondi last week to decry a proposed casino resorts bill, as well as the Internet sweepstakes cafes.
Putnam spokesman Sterling Ivey noted that operators who register are running numerous sweepstakes facilities. That, along with the $5,000 threshold, and the fact that non-profit organizations are not required to register their sweepstakes operations with the state, likely makes up for the difference between the amount of sweepstake cafes registered with the state and the estimated total number in operation, he said.
Like at the local level, the response of state lawmakers to the Internet sweepstakes cafes has been mixed. Some want to ban the stores outright, while others want to go the regulation route.
Sen. Miguel Diaz De la Portilla, R-Miami, has filed SB 380 to regulate the cafes, and Rep. Scott Plakon, R-Longwood, is sponsoring HB 3, to ban them altogether. Neither bill has received a committee hearing, though, and the issue is more likely to be taken up in the destination casino resort bill.
"I think it's irresponsible of the Legislature to allow this to go on without doing anything about it," Plakon said.
Sen. Ellyn Bogdanoff, R-Fort Lauderdale, sponsor of SB 710 to bring casino resorts to South Florida, said she will include an Internet sweepstakes café ban in a strike-all amendment, to be released next week. She said the ban will exempt businesses that legitimately use the game promotion statute, like McDonald’s perennial Monopoly promotion.
“In the initial strike-all I’m going to ban it because that’s my preference,” Bogdanoff said.
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