Senate bill that would shut down Internet cafes like Allied Veterans won’t pass this year
By Joe Crankshaw
A bill that would ban “Internet cafes” such as the one run by Allied Veterans of the World and Affiliates in Vero Beach is “dead in the Senate,” according to a key committee chair.
Although the Allied group says its operation raises money for veterans, the Florida Council on Compulsive Gambling says it is nothing more than a location for “convenience gambling.”
State Sen. Nancy Detert, R-Venice, chairwoman of the Commerce and Tourism Committee, said no action will be taken against the cafes this year, but that doesn’t mean the proposal will not be back in the next session.
Allied operates an Internet cafe in a storefront in Vero Beach. Scripps Treasure Coast Newspapers reported last month on drastically different financial figures reported by St. Augustine-based Allied Veterans 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.
Bills proposed by State Rep. Scott Plakon, R-Longwood, in the House and Sen. Steve Oelrich, R-Gainesville, in the Senate, would outlaw the use of simulated gambling devices like the machines used by Allied Veterans to run what it terms a “sweepstakes” contest in its Internet cafes in Florida. The bill has the backing of the Florida Sheriffs Association, the Florida Chiefs of Police and several other law enforcement organizations.
Detert said the bill is not being killed because it is a bad bill but because her committee has eight proposed changes to Florida law dealing with gambling. She said her committee staff has not calculated the impact of the several proposals on the state’s pari-mutuel industry and the compact with the Seminole Tribe.
“So, we aren’t doing any gambling bills in the Senate this year,” Detert said. “I have asked my staff to do a study over the summer, compare all the measures, examine the situation and make recommendations about a proper course of action.”
Oelrich and Plakon have both expressed dismay that their measure will not come to a vote during this session.
Allied Veterans of the World and Affiliates operates at least 39 Internet Cafes around the state. There are an estimated 500 similar operations in the state.
Usually located in storefronts in strip malls, each affiliate offers a number of computers displaying games of several sorts and allowing access to the Internet. Customers can be given 100 free minutes to use, after which they buy minutes. The minutes are recorded on a card that the customer uses in the computers to learn if they have won a prize of up to $5,000 in a sweepstakes.
Allied said it donates a portion of the money left after paying prize winners and operating expenses to veterans charities.
What amount actually goes to veteran and other projects is unclear from Allied records. According to its IRS form 990s, which are the income tax reports for nonprofits, in 2009, which is the last year they are available, Allied reported operating at a deficit but handed out some $2.5 million to various groups.
Kelly Mathis, Allied attorney and registered agent, said the organization has now given out some $5 million. But there is no evidence as to how much the organization took in through is Internet cafes.
Many law enforcement agencies contend that Allied and similar operations are really gambling. Allied cafes have been shut down in Pinellas and Manatee counties.
Authorities in Marion County have seized computers and arrested employees in about 20 locations in that county, including an Allied Veterans site. Seminole County has adopted an ordinance closing them down, but Allied went to federal court and secured a temporary injunction staying the action. The injunction was issued earlier this year but no hearing has been held on the matter.
Last year, Allied sought to get a statewide injunction but the Tallahassee court told them they had to sue in each county in which they have an affiliate.
Mathis said Allied’s games are legal, provide jobs, raise money for charities and should not be shut down.
Allied spokesmen did not return calls seeking for comment.
But the Senate action, while dooming the bills this session, does not mean there will not be change after the staff study ordered by Detert.
Detert said she does not know what recommendations will emerge from the study.
A study of the Internet cafes, adult amusement arcades and electronic game promotions for the state Senate in November 2008 concluded that patrons of the games and cafes could be cheated and that the laws needed to be amended to clarify what constitutes gambling. Several court rulings on the subject have also said the laws need to be amended.
Detert also said the adult arcades and Internet cafes might have become the new bingo parlors for the elderly in the state.
“I’m not sure what would happen if we closed them down, where would the elderly go?” Detert said.
Critics, including Plakon, point out the Internet cafes have created problems for communities where they are located and, because they sometimes have large amounts of cash on hand, become targets for criminals.
Last week, there was a shoot-out at the Allied Veterans Affiliate in Apopka. Three armed men entered the establishment, whose manager had testified before the Seminole County Commission that his business grossed $100,000 a week, and confronted a security guard with drawn guns. The security guard opened fire with his weapon, hitting one of the gunmen. They all fled, eventually throwing the body of the man who had been shot and killed onto the roadside.
It was the third attempted robbery of an Allied Veterans site this year, according to Plakon staffers.
Incidents like that have Plakon and others concerned. His bill is moving through the House committees, but without a companion Senate bill being passed, it will not become law.
That won’t be until at least next year. Still, Detert said she is familiar with Allied Veterans of the World and Affiliates.
“They are very wealthy and give only a little money to veterans,” she said. “I have told them to enjoy this year while we study the laws because they could be in danger of being out of business next year.”
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