Ohio Authorities Launched a Similar Crackdown of Sweepstakes Cafes in 2012
Authorities in California have begun cracking down on the Internet sweepstakes cafes which have sprung up across the state. Sheriff’s deputies in Sacramento have raided several businesses, closing down these illegal gambling operations. The Los Angeles city attorney launched a lawsuit to shut down such businesses. Another case is headed to the California Supreme Court, while state lawmakers are trying to write laws to shut down these cafes.
According to the American Gaming Association, such gaming locations take in about $10 billion every year. Little of that revenue is likely to be reported or taxed, since the gaming is illegal. Readers unfamiliar with this controversial new way to gamble might be wondering what these “sweepstakes cafes” are.
What Are Sweepstakes Cafes?
Sweepstakes cafes as the latest trend in the U.S. gambling culture. These unlicensed gaming venues appear to be everyday Internet cafes, operating to allow customers get online when they otherwise might not have online access. A sweepstakes cafe is different, because the computer screens offer access to electronic games set up for gambling purposes.
Conventional online cafes are popular with the college kids who might not have their own computer set-up, and might grow uncomfortable spending all their time in the campus’s computer lab. Internet cafes are also popular with teenagers who enjoy gaming, but might prefer to play computer games out at the strip mall. Adults frequent Internet cafes, too, often to make relatively cheap long distance phone calls. Some enjoy getting out of the house or apartment and surfing the net in public.
Anonymity Is Key
Such establishments are certain to have people sitting before computer screens, often enjoying one type of game or another. They spring up in strip malls and shopping centers, where a parent can drop off their teen while they shop. Their location in the midst of retail chains and restaurants make them blend.
The same can be said for sweepstakes cafes. In fact, most people passing by a strip mall sweepstakes cafe would assume it’s like any other Internet cafe. That’s what the operators hope. Law enforcement officials say they have trouble spotting such operations. They often need tips from local residents to perform a raid and shut down the operation. The American Gaming Association say at least 19 states now have Internet sweepstakes cafes, and they are beginning to criss-cross the United States.
Are Sweepstakes Games Legal?
Operators who run the sweepstakes cafes say their games are legal. These people and their lawywers say their games are no different than the sweepstakes games run by corporations as marketing tools. If McDonald’s can operate a sweepstakes with every combo meal ordered at their drive-thru window, why can’t a sweepstakes cafe do the same through their online portals?
Authorities take a different view of such gaming. They view the sweepstakes cafe, which offers games like “Luck of the Irish”, “Robin Hood,” and “Mr. Millionaire”, as gambling in a slightly different form. The games have much of the look and feel of online slot machines.
Officials are concerned because of the huge amount of untaxed profit. They are also concerned about the social problems caused by such operations. Problem gambling is a perenniel concern. The people who can least afford to lose money are often the ones losing cash on these online sweepstakes games.
Rudy Salas Cites Rampant Corruption
At least one California politician says the problem is far worse than unpaid taxes and lost rent. Assemblyman Rudy Salas, a Democrat from Bakersfield, says the online sweepstakes cafe becomes the center of vice and corruption in local communities.
When Rudy Salas was asked to explain his campaign to pass new laws, Salas said, “This is a prolific problem that we’re seeing in our neighborhoods up and down the state, where we’re seeing these illegal gaming sweepstakes cafes opening up with a myriad of problems and issues … of drugs, of prostitution, impacts to local legitimate businesses in these strip malls where these things are occurring.”
Anti-Sweepstakes Cafe Law AB1439
Salas is championing AB1439, which would seek to punish businesses who allow people to play casino-style games on their computers for cash or prizes. If AB1439 passes, the California state attorney general, local district attorneys, and city attorneys could sue such businesses in order to seek civil penalties for these violations.
State legislators believe new laws are needed to stem the rising wave of these gambling services. According to the California Bureau of Gambling Control, the number of sweepstakes cafes has doubled in one year’s time. In 2013, a study showed there were 42 such establishments in California. In 2014, there are not 81 such venues.
