By Jonathan Mattise
TALLAHASSEE — A House proposal to ban Internet cafes from running what opponents consider storefront gambling trudged through a favorable committee vote Tuesday, following ample debate and reference to one operation in Vero Beach.
House Bill 217 by Rep. Scott Plakon, R-Longwood, would crack down on the booming statewide growth of Internet cafes — a market that includes about 500 to 600 locations, and could be worth more than $1 billion, according to Plakon. Many of the same establishments tout their contributions to different charities and veterans’ causes, including one Allied Veterans of the World Inc. location in Vero Beach.
Scripps Treasure Coast Newspapers reported last week about the Vero Beach Internet cafe, citing drastically different figures involving Allied Veterans, based in St. Augustine, in the past two years — from a $4,331 deficit reported to the Internal Revenue Service in 2009 to more than $1 million donated to veterans causes in fall 2010.
“There’s a wide disparity in those figures,” Plakon said. “And in previous places where they’ve testified in county council, they’ve refused to answer questions about their finances. That article was pretty alarming.”
The Florida Department of Agriculture and Consumer Services “Gift Giver’s Guide” also estimated Allied Veterans donated only 1 percent of money spent in 2009 to veterans and first-responder causes.
At the cafes, customers pay for Internet access, receive a sweepstakes number and can play casino-style games to determine if they’ve won cash prizes. Plakon’s bill would close a legal loophole that allows the cafes to operate, he said. However, it wouldn’t affect other types of sweepstakes, such as the Monopoly game promotions at McDonald’s. Neither would it limit anything involving previous deals with Seminole gaming, or arcade gaming establishments.
“Some cities, counties and law enforcement agencies have tried to deal with it on their own, but have been sued because of a lack of clarity in our state law,” Plakon said.
Allied Veterans operates Internet cafes at 39 sites around the state, and donated more than $2.5 million to veteran and other causes. In Pinellas, Jackson, Marion and Seminole counties, however, law enforcement sought to shut down operations and accused the group of illegal gambling, and a slew of legal battles have surfaced over the issue.
The group has filed a federal lawsuit in the Seminole County case, and a ruling should be made on it by the end of the month, said Nicholas Iarossi, a lobbyist representing Allied Veterans.
Four court cases in Marion County have ruled in favor of the cafes, and no judges have said the entertainment they offer is illegal gambling, Iarossi said.
“Legal businesses operating in the state of Florida today, people who have invested tens of thousands of dollars to operate and open these establishments, it wipes them out overnight,” Iarossi said.
There’s no reason to think legal issues would stop there, either — whether a bill passes or not, Plakon said.
“I’m going to take a stab at it — this is more than a billion-dollars-a-year industry this has grown into,” Plakon said. “If we pass a law that affects that business model, why not bring more lawsuits? Even if it’s a couple more years you’ve got to operate.”
Critics of the bill also questioned why Plakon yanked arcade gaming from the bill’s current version. Earlier drafts cracked down on both Internet cafe and arcade gaming, and some committee members weren’t convinced the two differed.
The bill has been referred to three more House committees, and its Senate version, SB 576, hasn’t made it on a committee agenda yet.