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Northfield Park's new Hard Rock entertainment complex and racino is expected to be in action this fall. In the meantime, the Village of Northfield enjoys healthy taxes dollars from Internet cafes, which will be hurt by the track's video lottery machines.  

Northfield Village's three Internet cafes have been generating bags of cash for the small town, which is best known as home to Northfield Park harness track.

For more than two years, the village's largest cafe, Dusk-'Til-Dawn, has literally been delivering bags of it.

In a highly unusual ritual compared to other business practices, an employee from the cafe brings a bag of money to the village hall each month to settle the tax bill. There's so much money that a counting machine is needed to verify the stacks.

Under the village's rules, Internet cafes are required to pay a tax equal to five percent of their gross earnings.

When I first heard that a cafe was paying its tax bill in cash, I didn't believe it. The idea just seemed to play too easily into the hands of those who oppose Internet cafes. Ohio Attorney General Mike DeWine and law enforcement officials see Internet cafes as not only illegal gambling operations but as fronts for crime, such as money laundering.

My opposition centers on the fact that Internet cafe sweepstakes games feel too much like slot machine games, which makes them an end run around voters, who only approved slots play at casinos. (This is the result of casino operators and their lobbyists, who wrote the gambling amendment to the Ohio constitution that gives them a monopoly.)

I've seen Internet cafes first-hand and found them more akin to a noisy library than a backroom poker operation filled with smoke and rowdy players with stacks of cash. But DeWine and others insist the unseen aspects of the operation are the problem, which brings me back to the cash.

Paying taxes in cash each month hurts the image of the Internet cafes screaming to be treated as legitimate businesses. Most legitimate businesses don't pay bills with bundles of cash.

Bradric Bryan, Northfield Village's law director, said the village isn't thrilled to be handling the cash – which gets delivered to the bank via police escort -- but the town has to accept payment in that form. He said that when the cafes opened, the state and county offered no guidance on how to treat them and the village was in no position to sort it out.

"We didn't have the resources to be the guinea pig," he said.

Exactly how much Dusk-'Til-Dawn brings in each month is not a public record. But Finance Director Monica A. James says the three Internet cafes combined paid more than $300,000 last year. That's a critical chunk of money considering the village's total receipts for the year was around $2.7 million and it had little left over.)

James said all the cafes provide the paperwork to support their tax payments. She refused to identify the Dusk-'Til-Dawn by name, claiming doing so could lead to a robbery.

The cash stacks are so thick that sometimes the cafe gets a small refund – when the village or the bank discovers a $100 bill stuck to a smaller bill.

On Monday I reached Chad Price, who operates Dusk-'Til-Dawn.

"Most of my vendors get paid cash," he told me.

Price says paying in cash just simplifies his operations.

Doing so is also a tactical move against the likes of the state attorney general and county prosecutors.

Price says he wants to keep as much money out of the bank to avoid having it seized by the state during a legal battle. Authorities have frozen the assets of some cafe operations caught up in legal and criminal investigations.

Price would rather use his checking account, but he said the swirling debate about the legality of cafes has made doing business more difficult.

Price's comments were a hanging curve for Jay McDonald, president of the Ohio Fraternal Order of Police, who's been lobbying lawmakers to shut down Internet cafes.

"It fits in with my testimony that these cafes are unregulated, all-cash businesses that lend themselves to money laundering," he said, noting he's never heard of a Internet business paying taxes in cash. "This is the poster child for why we need strong regulation."

Such regulation remains in the hands of the Ohio Senate, which is reviewing the anti-Internet cafe legislation recently passed by the Ohio House.

The village will soon become home to Northfield Track's "racino" offering casino-style gambling on video lottery terminals. The racinos are also being challenged by anti-gambling forces and likely will cut into the profits of Internet cafes.

Until all this is sorted out, the best thing the village can do is keep counting its bags of cash.


Plain Dealer News Researcher Jo Ellen Corrigan contributed to this report.

Follow me on Twitter: @marknaymik

You can reach me at 216-999-4849, or at mnaymik@plaind.com

Michelle Quesada <!-- -->

JACKSONVILLE, Fla. --The Florida Senate Gaming Committee is set to review a proposal that would ban Internet cafes across the state. Owners of these establishments on the First Coast are worried lawmakers are just reacting to arrests in a statewide racketeering scandal.

"We don't think that's fair and we don't think that's justice and give us a chance, let us fight it. Let's find out what we can do to fix the problem instead of just like shut them down," said Elia Hawara, owner of Royal Times Sweepstakes in Regency.

A proposal to ban all Florida Internet cafes swept through the Florida House Select Gaming Committee with a 15-to-1 vote Friday, now the Senate Gaming Committee is set to review Senate Bill 1030 which also proposes to prohibit the establishments. These bills are causing worries among Internet café owners and employees. 

"I have not really for the last two days. I have not had any sleep, not night not day, just thinking what's going on why is this happening," said Hawara.

For over five years, Elia Hawara says he's operated a legit Internet café in Jacksonville. 

"We show everything, we don't have anything to hide, good relations with the customers, as you can tell clean operation," said Hawara.  

Under Florida Statute 849.094, electronic game promotions in connection to sale of products or services are allowed and are not considered gambling. But advocates for the bill say the sweepstakes machines resemble slot machines and computer online gambling.

Internet café owners pay annual fees, fees per machines along with permits from the county. They have to abide by county regulations and zoning and all sweepstakes machines have to be certified by the state.

After the Allied Veterans of the World Internet cafes alleged illegal gambling and racketeering charges, these Internet cafes are at risk of being shut down altogether.

"What Allied did has nothing to do with a legit Internet café that's trying to make business and it also bring job opportunities for people that are looking for work," said Ramon Acevedo, an employee of Winners Sweepstakes.

Acevedo just started working at Winners Sweepstakes last year and says he already had another job, but got this part time job to help with bills. There are over 50 listed Internet cafes on the First Coast and on average they each may have up to ten employees. That would mean hundreds without jobs just in Northeast Florida.

The Florida Senate Gaming Committee will review the bill at 10 a.m. Monday.

First Coast News

Article source: http://www.firstcoastnews.com/topstories/article/304228/483/Internet-cafes-worried-about-bill-to-ban-gaming-establishments

Michelle Quesada <!-- -->

JACKSONVILLE, Fla. --The Florida Senate Gaming Committee is set to review a proposal that would ban Internet cafes across the state. Owners of these establishments on the First Coast are worried lawmakers are just reacting to arrests in a statewide racketeering scandal.

"We don't think that's fair and we don't think that's justice and give us a chance, let us fight it. Let's find out what we can do to fix the problem instead of just like shut them down," said Elia Hawara, owner of Royal Times Sweepstakes in Regency.

A proposal to ban all Florida Internet cafes swept through the Florida House Select Gaming Committee with a 15-to-1 vote Friday, now the Senate Gaming Committee is set to review Senate Bill 1030 which also proposes to prohibit the establishments. These bills are causing worries among Internet café owners and employees. 

"I have not really for the last two days. I have not had any sleep, not night not day, just thinking what's going on why is this happening," said Hawara.

For over five years, Elia Hawara says he's operated a legit Internet café in Jacksonville. 

"We show everything, we don't have anything to hide, good relations with the customers, as you can tell clean operation," said Hawara.  

Under Florida Statute 849.094, electronic game promotions in connection to sale of products or services are allowed and are not considered gambling. But advocates for the bill say the sweepstakes machines resemble slot machines and computer online gambling.

Internet café owners pay annual fees, fees per machines along with permits from the county. They have to abide by county regulations and zoning and all sweepstakes machines have to be certified by the state.

After the Allied Veterans of the World Internet cafes alleged illegal gambling and racketeering charges, these Internet cafes are at risk of being shut down altogether.

"What Allied did has nothing to do with a legit Internet café that's trying to make business and it also bring job opportunities for people that are looking for work," said Ramon Acevedo, an employee of Winners Sweepstakes.

Acevedo just started working at Winners Sweepstakes last year and says he already had another job, but got this part time job to help with bills. There are over 50 listed Internet cafes on the First Coast and on average they each may have up to ten employees. That would mean hundreds without jobs just in Northeast Florida.

The Florida Senate Gaming Committee will review the bill at 10 a.m. Monday.

First Coast News

Article source: http://www.firstcoastnews.com/topstories/article/304228/483/Internet-cafes-worried-about-bill-to-ban-gaming-establishments

Florida legislators dithered for four years while city and county officials pleaded for a ban on Internet sweepstakes cafes.

That procrastination is no more. The arrests of 57 people and Wednesday's resignation of Lt. Gov. Jennifer Carroll in the midst of a federal investigation of fraud allegations against a purported veterans charity have led to a near-frenzy in the Legislature to ban the cafes.

"I certainly hope they're done," Agriculture Commissioner Adam Putnam said Thursday of the cafes. Putnam's charitable solicitation office regulates only eight of the hundreds of sweepstakes operations in Florida. "We've always been for banning them, and I'm hopeful that when the Senate takes up that bill … it will include a total ban."

A House committee on gambling is scheduled to take up legislation to ban the cafes today. The Senate Gaming Committee has a meeting Monday and probably will rework a bill that seeks a moratorium on cafes to include an outright ban.

"Even the Internet cafes that are operating with the best of intentions are operating within a gray area of the law," Putnam said. "That should be resolved and, given the widespread nature of the corruption, I think it's best for the state of Florida to err on the side of a total elimination."

Carroll, 53, has not been accused of any criminal offense. Her public relations firm represented the embattled Internet sweepstakes cafe operator, Allied Veterans of the World, in 2009 and 2010, when she was a member of the Florida House from Jacksonville. She resigned Tuesday after being questioned by the Florida Department of Law Enforcement.

Gov. Rick Scott ordered a review of his campaign-finance records to see if his re-election effort received any donations from companies involved in the investigation. Any monies received will be contributed to charities, Scott said.

On Thursday, Republican Party of Florida Chairman Lenny Curry took a similar step.

"In light of recent developments," Curry said, "RPOF is examining financial contributions that may be connected to any entities affiliated with the investigation and we are reviewing the most appropriate options."

House Speaker Will Weatherford, R-Wesley Chapel, announced Wednesday that the House Select Committee on Gaming will consider the bill that seeks to ban sweepstakes cafes today. Weatherford noted that the House has voted against Internet casinos in past sessions, but the Senate has not acted.

The sweepstakes cafes sell internet access at locations offering "sweepstakes" games. Players can go online and play poker or electronic slot machines, with winnings and losses recorded on magnetic cards that can be cashed out when they leave a cafe.

Weatherford said the investigation "has expedited something that has been a House position for quite some time, which is these machines and these Internet cafes need to be closed down."

The scandal left the Internet cafes with few defenders in the Capitol. At least nine lobbyists and public relations advisers have withdrawn from representing International Internet Techologies, a firm investigators said provided computer systems to run the online gaming for the cafes.

Article source: http://www2.tbo.com/news/news/2013/mar/15/internet-cafe-probe-spurs-action-in-tally-ar-658791/

Owners of dozens of Internet gambling centers in Florida were arrested Wednesday as part of a three-year investigation into Jacksonville-based Allied Veterans of the World, a purported charity group that, authorities say, collected millions of dollars for itself and little money for veterans.

The probe led to the arrest of 55 individuals in Florida and five other states and prompted the resignation of Lt. Gov. Jennifer Carroll. Two suspects remained at large Wednesday.

It is the “first wave” of Operation Reveal the Deal, which targets illicit slot machine operators who exploited a loophole in the state’s sweepstakes laws, Gerald Bailey, commissioner of the Florida Department of Law Enforcement said at a news conference in Orlando.

Targeted in the crackdown were owners and operators of 49 gambling centers affiliated with Allied Veterans of the World, an organization registered as a charity but which gave only 2 percent of its profits over three years to charitable causes. None were in Broward or Miami-Dade counties; three were in Monroe. Carroll’s consulting company had represented Allied Veterans until she became lieutenant governor in 2011. Police would not say whether Carroll received payments from the group while serving lieutenant governor.

“Their premise of charity is a lie — a lie to our citizens and a lie to our veterans,” Bailey said. “Our investigators believe that the reality is that each gambling center is operated by the owners of for-profit agencies that funnel the bulk of the money back to themselves.”

He said charges would be forthcoming next week against those in custody on suspicion of illegal gambling, racketeering and money laundering. He emphasized that there would be additional probes into other Internet cafes not affiliated with Allied Veterans.

The games operate by giving customers a prepaid card to play a “sweepstakes” game on a computer that offers a game with the look and feel of a slot machine. Winners of games with names such as “Captain Cash,” “Lucky Shamrocks” and “Money Bunny” rack up winnings and then go to a cashier to cash out their winnings.

Seminole County Sheriff Donald Eslinger, who launched the investigations that sparked the dragnet, said the operations of other gaming centers are believed to be “contrary to the law” but police “have delayed the pursuit of criminal charges against them so as not to jeopardize this investigation.”

Asked whether any other elected officials would be implicated in the probe, Bailey said: “That is one of the issues that is going to be taken up in the second wave of the operation.”

Meanwhile, the investigations prompted Senate President Don Gaetz, R-Niceville, and Gaming Committee Chairman Garrett Richter, R-Naples, to introduce legislation next Monday that would ban Internet cafes in Florida. The Florida House last year passed legislation that would ban the gaming centers, but the Senate, concerned about the impact on jobs, refused to go along.

Richter said the Senate leadership had been supportive of imposing a moratorium opening new Internet cafes until the Legislature took a comprehensive look at gambling laws next year. But the revelations this week, he said, have “expedited the thinking going forward.”

Article source: http://www.miamiherald.com/2013/03/13/3284531/internet-cafe-probe-snags-dozens.html

RANCHO CORDOVA, Calif. (AP) — Rancho Cordova city officials have approved a moratorium on new businesses that they say are casinos disguised as Internet cafes.

The Sacramento Bee reports the City Council recently passed the 45-day moratorium to prevent similar operations from opening their doors. The moratorium will give city officials time to explore an ordinance to ban the businesses outright.

State officials say the cafes have computers that run casino games. Customers buy a card to play the games and can cash out the winnings at the store.

The Justice Department has issued an advisory calling the businesses illegal gambling operations, but enforcement often falls under the jurisdiction of local governments.

Operators and their vendors contend the businesses are legitimate and operate within the confines of the law.

Copyright 2013 The Associated Press.


 Rancho Cordova Seeks To Stop Internet Cafe Casinos

Article source: http://sacramento.cbslocal.com/2013/03/11/rancho-cordova-seeks-to-stop-internet-cafe-casinos/

As if opponents of Ohio’s seedy network of 800 Internet cafes did not already have enough ammunition in their arsenals to fire at state legislators, along comes an investigation that should seal the deal of doom on these unconstitutional sweepstakes parlors.

An Ohio newspaper probe revealed last week that most Ohio Internet cafes provided incomplete information to the state secretary of state’s office, and many of the businesses’ operators who could be identified have spotty financial backgrounds or criminal histories.

Now that regulations that some say would force Internet cafes out of business are likely for a vote in the Ohio House as early as this week, the new revelations should spur legislators to act quickly and decisively in support of House Bill 7. The bill, sponsored by Rep. Matt Huffman, a Lima Republican, would limit prize payouts at the sweepstakes parlors to $10 a day, a provision essentially intended to drive them out of business.

MORE REASONS FOR REGULATION

A moratorium on new Internet cafes in Ohio expires June 30. Therefore it’s incumbent on the General Assembly to act expeditiously. Just in case anyone has forgotten, numerous other logical reasons explain why such extreme regulation is needed and needed now:

Internet cafes lack all consumer protections that regulated gambling offers. Cafe owners and employees are not subject to background checks, games aren’t checked for integrity and fairness, and there are no gaming taxes .

Internet cafes divert money from churches and fraternal organizations that operate bingo and other forms of legal gambling. These groups are strictly regulated and are required to give part of their proceeds to charity.

The operation of Internet cafes violates the Ohio Constitution, which specifically prohibits gambling except for those that are state-regulated, such as the Ohio Lottery, casinos and racinos.

Ohio Attorney General Mike DeWine, a longtime foe of storefront gambling, likens Internet cafe shenanigans to “The Wild, Wild West.” The Ohio General Assembly can best tame this out-of-control beast that preys on the poorest of Ohio’s population by adopting Huffman’s responsible legislation by the Easter recess.

Article source: http://www.vindy.com/news/2013/mar/10/death-knell-for-internet-cafes/?newswatch

An Internet business cafe has been shut down by Matthews police after authorities said they determined it was not complying with state sweepstakes gaming laws.

Matthews police say officers seized computer equipment last Thursday from Cyber One, a business in the 11200 block of East Independence Boulevard, near Interstate 485.

Corp. Lori Valdes, a spokeswoman for Matthews police, said authorities gave written notification in early February to Cyber One’s owners that the business would need to change its gaming software in order to comply with state laws. Valdes said Cyber One closed for a short time after that.

When the business re-opened later in February, Matthews police executed a search warrant last week. Valdes said police closed the business, claiming it was violating North Carolina sweepstakes laws.

She said the investigation is continuing into Cyber One’s operations, and criminal charges are possible.

A number of Internet operations in the Charlotte region closed earlier this year after new state laws limiting sweepstakes operations went into effect.

Article source: http://www.charlotteobserver.com/2013/03/07/3899132/matthews-police-close-internet.html

internet cafes.jpg Customers were able to choose among several dozen sweepstakes games in September at the Infinity Cafe.  

COLUMBUS, Ohio - More than 30 witnesses lined up to testify Tuesday before a committee considering House Bill 7, which would force most of Ohio's 800 or so Internet cafes to shut down.

In the legislation's third hearing, opponents responded to allegations from Ohio Attorney General Mike DeWine and law-enforcement agencies that sweepstakes parlors are fronts for criminal activity, including money laundering and human trafficking.

Luther Liggett, an attorney representing a coalition of cafe owners and operators, told the committee the bill is unconstitutional and part of a smear campaign fueled by big-game operations, such as casinos, to snuff out the sweepstakes industry.

"It has nothing to do with prostitution or anything like that," Liggett said. "It's about putting the competition out of business."

He said the bill's passage would be no different than lawmakers outlawing laundromats because they compete with washer-and-dryer retailers.

The sweepstakes business has had a target on its back since June 2012, with opponents asserting the parlors are fronts for illegal gambling that drain money from charitable organizations and casinos. Internet cafes sell Internet and phone time with cash-prize contests thrown in as a bonus.

With little statewide regulation, some have said cafes have the potential to foster serious crimes. Lawmakers shelved a similar bill last year after it passed the House.

A representative of the Portage County Tea Party told the committee HB 7 undermines capitalism and needlessly sacks Ohio jobs. Tom Zawitowski, the group's executive director, said his organization opposed casino expansion, but Internet cafes have had a positive effect on communities and promote prosperity in hard economic times.

"We are not gambling proponents," Zawitowski told the committee. "However, when we looked at this issue, it just seemed to us that the law said sweepstakes are legal."

Liggett said state lawmakers already put a moratorium on sweepstakes cafes last year, meaning no new parlors can plant roots in Ohio until June 30, 2013. That same law defines sweepstakes as separate from gambling, and legislators are violating the statute by playing favorites with what businesses can and cannot participate in cash-prize contests, he said.

"It legalized gambling at every bar in Ohio. All you had to do was give a cut to a charity," he said. "So this business about legalizing gambling on every street corner. Come on, that race horse is out of the barn."

Rep. Matt Huffman, a Lima Republican sponsoring the bill, said Internet cafes differ from typical sweepstakes games because they're year-round businesses. Contests like those offered by McDonald's and Verizon Wireless are marketing gimmicks with an expiration date. Plus, he said, nobody binge-buys hamburgers just for the possibility of a prize.

Liggett, who was reprimanded by the committee for his tone, disagreed, saying people do, in fact, buy McDonald's food just for that reason. In addition, Publisher's Clearing House is a year-round sweepstakes industry, he said.

Dozens more cafe owners, operators and employees were scheduled to testify to the House committee. Marvin Carroll, manager of Buckeye Internet Cafe, tearfully told the committee it had no proof of wrongdoing and begged it to regulate his industry.

"Regulate us and get your answers," he said. "Do not take our jobs. Do not take my life . . . Do not take my life as I know it."

Carroll added there are bad people in every profession, but it is unfair to judge him based on others' crimes or government officials' "guesswork and opinions."

The overflow crowd loudly applauded Carroll, leading to a warning from the committee that those who exhibited raucous behavior would be thrown out.

Jim Del Torto, owner of Game On Business and Sweepstakes Center in Twinsburg, said his cafe is not a den of criminal activity, and it offends him that his family-friendly business is frequently portrayed in such a light.

"We have created an atmosphere … that is safe, welcoming and family-like," he said.

Liggett testified that politics has fueled testimony from police and other prominent officials.

He said he welcomes the punishment of sex trafficking, racketeering, money laundering and illegal gambling and the closure of cafes not registered with the Attorney General's Office -- but lawmakers have to prove their claims first.

"Why don't you go arrest them?" he said. "If they're so confident criminal activity is going on, why aren't they out there doing their duty? The fact is there isn't any criminal activity going on."

Rex Santus is a Kent State University journalism student and a fellow in The E.W. Scripps School of Journalism Statehouse News Bureau at Ohio University.

RANCHO CORDOVA (CBS13) - Game over for Internet cafes? One city is considering cracking down on the cafes over worries they’re being used for illegal Internet gambling.

City leaders have scheduled an urgent vote Monday to ban all Internet cafes in the city of Rancho Cordova in an effort to fight crime before it happens.

Police raided an Internet cafe in south Sacramento for illegal online gambling recently. It’s something the city of Rancho Cordova is trying to avoid.

“If it brings trouble then kick them out, but if there is no valid reason to ban them, then there is no reason to ban them,” said Rancho Cordova resident Harold Lind.

The city is scheduled to vote tomorrow night to temporarily pull the plug on the cafes because some are concerned these businesses are bad for the neighborhood and are a hot spot for crime.

“What these establishments usually bring in is a lot of drugs, prostitution and a lot of problems and complaints from other business owners and residents,” said Sacramento County Sheriff’s Department Sgt. Ray Duncan.

There are currently no Internet cafes in city limits; however, one cafe has applied for a business permit, which city officials say is prompting the review.

“Business is business; everybody has to work,” said Lind.

But one attorney who represents Internet cafes says Internet cafes are no different than a sweepstakes at McDonald’s.

It’s really hard to discern under the law — under anybody’s interpretation of the current laws of California or other states whether this is gambling or not,” said attorney Mark Reichel.

“I think there are legitimate reasons to be at an Internet cafe,” said resident Herbert Lum.

People who live in Rancho Cordova are on both sides of the fence.

“There are other places that offer free wifi,” said resident Alex Slaughter.

“A lot of people check their email, send business correspondence — those people are gonna have to pay the price for every other illegal activity that goes on there,” said Lum.

If passed, the moratorium will last 45 days while the city studies whether to permanently ban Internet cafes all together.

Several east bay cities, including Antioch and Pittsburg, have already set similar moratoriums.


 Citing Crime Reports, City Of Rancho Cordova Considers Banning Internet Cafes

Article source: http://sacramento.cbslocal.com/2013/03/03/citing-crime-reports-city-of-rancho-cordova-considers-banning-internet-cafes/