When most people think of Internet cafes, they imagine a business like Starbucks -- where, for a fee and usually by the hour or minute, they can access a computer. These days, however, some Internet cafes look less like a bookstore or a coffee shop than they do the Palace Station Casino in Las Vegas.
What are they doing and how did they get they get that way? Should they be regulated or shut down?
Internet cafes have quietly become one of the most controversial issues in Florida today. In recent years they have emerged and spread throughout Florida, often in strip malls, in low-income areas and wherever a large number of senior citizens live, from the Panhandle to south Miami.
But this new, popular trend is causing much confusion and concern for many Floridians.
Police chiefs, state attorneys and county sheriffs' deputies are all pleading to ban Internet cafes, insisting they are nothing more than illegal gambling areas that draw a criminal element into whatever neighborhood they set up shop.
Researchers and lawmakers are also looking into Internet cafes as a possible emerging revenue source, a trust fund that might be established for struggling school districts. In North Carolina, for instance, William Thevaos, president of an association representing Internet sweepstakes centers in the state, says regulated Internet sweepstakes could generate $500 million a year for the state. For that reason, the North Carolina governor has gone from urging their demise to considering them an exciting, new cottage industry.
Nobody yet in the Florida Legislature is proposing Internet cafes as a revenue source.
For now, the battle in the Sunshine State is whether the hundreds of Internet cafes now operating are providing a legal service to customers, or opportunities for illegal gambling.
Here's how they work: In order to take in more patrons, a proprietor offers a kind of online sweepstakes. He or she gives, say, 100 chances for every hour of Internet time purchased. Customers could see if they won by playing video slot machines online and redeem winning chances for cash prizes of $10, $25 or $100.
Does that sound legal? Authorities in some cities and counties say no, it looks a lot like gambling. But the proprietors get themselves lawyers and fight back. And all of a sudden the ball is back in the state's court.
Most recently, Neptune Beach and Baker County adopted ordinances banning Internet cafes.
In the last couple of weeks in Pinellas County, sheriff's deputies raided three Internet sweepstakes cafes, seizing about $20,000 and around 200 computers.
State and city officials in North Carolina, Utah, California and other states are dealing with the same issues pertaining to Internet cafes.
Florida law allows business owners of Internet cafes to offer a service that lets customers pay for Internet use, and an accompanying gaming contest that provides prizes.
According to Section 849.094 of the Florida Statutes, a game promotion is a contest, game of chance, or gift enterprise. Game promotions are also conducted in connection with the sale of consumer products or services, and have the element of chance and prize. Bingo games, raffles and lotteries are not game promotions.
When the bill was passed, Internet gambling devices were not even considered, said Marc Dunbar, a Florida lawyer whose practice focuses on gaming and governmental law.
Clarification is needed, said Adam Putnam, Florida commissioner for the Department of Agriculture and Consumer Services, who also handles the issue of Internet cafes in Florida. There is no question in my mind that there is an ambiguity in the law itself, which is leading to uneven enforcement. And thats unhealthy, regardless of who the impact parties are. You cant have a rule of law that is subject to an individual sheriff or state attorneys interpretation. So even the Internet cafes would say that there is an ambiguity. And so the short answer is, yes, it needs to be clarified.
Dunbar agrees. Clarification is needed, because the current law that was amended during the 1980s does not acknowledge Internet cafes. The state of Florida needs to step up and pass ordinances to regulate these Internet cafes in Florida.
"These Internet cafes are taking revenue away from the Florida lottery and slot machine devices," which, he claims, benefits education in Florida. "Remove lottery revenue, for instance, and education 'enhancement' revenue drops."
(Dunbar, however, does have a dog in the Internet cafe hunt. As an attorney, his gaming practice is Floridas largest, encompassing both lobbying and litigation for casinos, gaming suppliers, pari-mutuels, Indian tribes, sweepstakes and charities. He is the first to admit that it is not in the interest of any of his clients to allow Internet cafes to continue as they are.)
In 1986 voters amended Florida's Constitution to allow the state to operate the lottery and use the proceeds to enhance education in Florida.
In 2009-10, $24.1 million was deemed unclaimed in online games, and $19.7 million was unclaimed in instant games, which created a total of $43.8 million in unclaimed funds.
The lottery proceeds transfer to the Educational Enhancement Trust Fund each year and are used for maintenance or repair of schools and Bright Futures scholarships. The big worry, say Internet cafe critics, is that the cafes are offering devices very similar to the lottery, siphoning off the trust fund's annual "take."Currently in Florida, thousands of dollars are going into gambling devices in Internet cafes, butzero dollars of the money go to help education.
"Internet cafes in Florida are deceptive, not presented as what they really are," says state Rep. Scott Plakon, R-Longwood. "These places are gambling establishments. This should have never happened. Legislation never anticipated this type of outburst of problems.
Plakon has filed House Bill 3 for the 2012 Florida legislative session which, if passed, would prohibit simulated gambling devices and also create a "Simulated Gambling Prohibition and Community Protection Act."
I am all for those establishments that allow for individuals to surf the web and check e-mails, said Plakon. I have used Internet cafes overseas before to go online, but these places in Florida are for gambling.
Plakon had filed HB 217 attempting to ban the cafes during the 2011 session, but the bill was heard by one committee in the House and got no further.
"The state of Florida needs to step up and pass ordinances to regulate these Internet cafes in Florida, said Dunbar.
(To see Adam Putnam, commissioner of agriculture and consumer services, discuss Internet cafes, click on Sunshine State News' SNAP.)
Marcus Joseph, an intern at Sunshine State News, can be reached at marcus@sunshinestatenews, or at (850) 727-0859. Nancy Smith contributed to this story.
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