St. Johns County and sweepstakes casinos

Classified as “Games or Devices” for business tax purposes by the St. Johns County Tax Collector’s Office, controversial “Internet Cafes” have quickly appeared in thirteen different locations around the county during the past year.

Counties to the north and counties to the south have tried to restrict the establishment of these so-called “sweepstakes” operators who have seemingly taken up residence in shopping centers and strip malls around the state.

Historic City News editor Michael Gold said today, “Like them or not, these businesses appear to be the next iteration of Vietnamese nail salons; that, at one point, looked like they were destined to have more locations than 7-Eleven”.

At issue locally are substantially two sets of laws that restrict or prohibit games of chance for money or other things of value — the Federal 2006 “Unlawful Internet Gambling Enforcement Act” and Florida’s gambling statutes found in Chapter 849.

St. Johns County Internet Cafés who have paid their business tax:

42163 Lucky Joes Sweepstakes LLC
Lucky Joes Sweepstakes LLC
525 SR-16
St Augustine FL 32084

42253 Atlantis Internet Cafe
SKMA LLC
1949 SR-A1A South
St Augustine FL 32080

45129 Cyberworld Bonus Club LLC
Cyberworld Bonus Club LLC
2469 US-1
St Augustine FL 32084

46289 Winners Internet Sweepstakes Cafe
Hiott John R Jr
2600 US-1 South
St Augustine FL 32086

47925 FLorida Sweepstakes Holdings 6 LLC
Florida Sweepstakes Holdings 6 LLC
445 SR-13
Fruit Cove FL 32259

48243 Prime Time Business Services
NHA Investments LLC
1956 US-1 South
St Augustine FL 32086

48343 FLorida Sweepstakes Holdings LLC
FLorida Sweepstakes Holdings LLC
445 SR-13
Fruit Cove FL 32259

48661 Lucky Joes III
Lucky Joes Sweepstakes LLC
4010 US-1 South
St Augustine FL 32086

49303 Lucky Louies Internet Cafe
Povlak Sharon
2548 US-1 South
St Augustine FL 32086

49529 Winners Circle Sweepstakes
Surprise 2010 LLC
6101 SR-A1A South
St Augustine FL 32080

49793 Atlantis Internet Cafe
SKMA LLC
292 Solana Rd
Ponte Vedra Beach FL 32082

49939 Internet Cafe
Florida Independent Charities Association Inc.
1050 SR-206 East
St Augustine FL 32086

50099 Atlantis Internet Cafe & Sweepstakes
SKMA LLC
3501 N Ponce De Leon Boulevard
St Augustine FL 32084

St. Johns County Sheriff’s spokesman, Sgt. Chuck Mulligan, told Historic City News this morning, “From my conversations with our Special Investigations Unit, the cafe’s in our jurisdiction have been operating legally, under the current law.”

There are many specific practices identified in the state as “no-go”. Lotteries and coin-operated gambling machines, for example are considered “games of chance”. There are exceptions, too, like games operated by qualified charitable organizations, games with certain low limits and “games of skill” where prizes are awarded; like bowling tournaments and, some are now arguing, poker.

However, Internet cafes advertise the chance for customers to win prizes; cash and merchandise awarded in ongoing “sweepstakes”.

The “sweepstakes” approach being used by the Internet cafes in our area appears to be holding up to close scrutiny. Florida Statute 849.094, Game promotion in connection with sale of consumer products or services, is comparatively clear and includes easy-to-understand guidelines that must be followed by the operator offer both small and large prizes (those over $5,000).

Florida allows companies, such as McDonald’s and Publisher’s Clearinghouse, to offer sweepstakes and drawings — with prizes as high as $1 million. The Internet cafe industry says they offer their own prizes; and, just like McDonald’s or PCH, players are not required to make a purchase. The café awards game chances with each purchase as a method of promotion. Anyone wanting to play free can request a chance in writing.

Generally, in Florida, the state operates a legal lottery and licenses pari-mutuel gambling at six jai alai frontons, horse and greyhound race tracks around the state, poker rooms and taxes the play at tribal gaming locations. A so-called “cruise to nowhere” can depart from Florida ports, so long as no gaming occurs until the vessel is in international waters, and, at one time, one could be boarded at the Vilano Beach pier in St. Augustine.

Seminole County Sheriff Donald F. Eslinger is not taking a “wait and see” approach — he has declared even existing Internet cafes in Seminole County “are illegal”. Eslinger has begun shutting the businesses down. Seminole County was promptly sued by Allied Veterans of the World Inc. Allied Veterans was denied an injunction against the ban. Although the court’s decision sounds immediately favorable to Seminole County, Allied Veterans has appealed the decision to the 11th Circuit in Atlanta.

Palm Coast Mayor Jon Netts, who was just re-elected last week and where 9 Internet cafes currently operate, does not want to wager on the legality of a ban before the legislature gives better direction. “All things being equal, I would just as soon the big boys hash this out,” Netts told reporters. “I would not want to create an ordinance at this point, absent some state indications as to what the legality is, and then put us on the hook for a lawsuit. Let Seminole County fight it out. They’ve got bigger, deeper pockets.”

Our southern neighbor in Flagler County put a moratorium on new applications for Internet cafes in May; in order to determine where the businesses should be legally zoned to operate. Tomorrow night the city council members will vote to decide if they should extend the current ban for another six months. City Attorney William Reischmann said that moratoriums are legally safe for up to one year.

Jacksonville is Florida’s largest city to try to regulate Internet cafes. Their ordinance limits the number of locations that can receive a permit. Those who are able to meet the permit requirements must also comply with sign restrictions and they are prohibited from selling alcohol on the premises.

Supporting tough restrictive regulations for Internet cafes in Jacksonville were the owners of the Jacksonville Greyhound Track. Pitted against them were attorneys for Allied Veterans of the World Inc. — who told reporters that, as far as Internet cafe operators go, in Florida, “there has not been a single successful prosecution”. Attempts in Florida to ban or regulate Internet cafes have fizzled. So far, legislation filed last spring to ban Internet cafes was killed in its first committee stop and another, to regulate Internet cafes, did not get one committee hearing.

Governor Rick Scott told reporters earlier this month that he thinks issues surrounding operation of Internet sweepstakes need to be discussed during the next legislative session. A spokesman for the Executive Office of Governor said “Scott hasn’t formed a position on the issue”.

Scott will have his way. When senators and state representatives return to Tallahassee in January, they will take up the issue again. One bill has already been filed to ban Internet cafés all together and another is expected in the coming week that would attempt to establish regulations for them.

Sheriff David B. Shoar, like the Governor, has not formed a position on the issue, Mulligan said. “If the legislature amends the laws dealing with these issues, we will be bound to investigate cases where the law may be violated.”