Online and Chasing Lady Luck By March 14, 2013 at 12:30 am Since Nevada and New Jersey had their race to be the first to the Internet, there has been lots of activity on the subject elsewhere. Pennsylvania, Illinois, California and New York are mulling over the idea; each state sees a unique opportunity to take advantage of the moment and of course raise some much needed tax revenues. However, most of the legislators are quite vague on the details and the mechanisms by which online gambling would be legal. They have heard there are millions, maybe billions of dollars, lying loose out there and they want to grab them up. At the rate the states are lining up to join the online gambling parade, by the end of the year we should have a dozen or so states in the process of legalizing gambling online. Although, not everyone is in favor of the online gambling, Iowa and Hawaii have passed on the idea for the moment. A bill that would legalize Internet wagering in Pennsylvania is to be introduced next week by State Rep. Tina Davis… cited recent moves by New Jersey and Delaware as the reason Pennsylvania needed to get started on the issue. Suzette Parmley, Inquirer, 3-8-13 Illinois SB 1739 requires internet gambling companies to pay a $20 million licensing fee for internet gambling. Rockford register star, 3-13-13 Legislation that would legalize online gambling in the state of Illinois was approved by a state senate committee on Wednesday with a full Senate vote expected as soon as Thursday. Michael Gentile, Poker Fuse, 3-7-13 For the third time in as many years, Golden State lawmakers are considering bills that would allow online gaming in California. Senator Lou Correa (l.) has introduced a second bill into the state Senate. iGames, 3-11-13 Looking for a cash infusion, the New York State Senate Monday proposed legalizing online poker as New York’s budget fight began to take shape. Yancey Roy, Newsday, 3-13-13 If that was all of the Internet news, it would be significant as New York just joined the fray, and as we all know, New York is significant; one casino in New York City generated $57 million in slot revenue in February – that is more that 33 percent of the slot revenue generated by the 12 casinos in Atlantic City in February. However, that was not all of the Internet news. On the other side of the ledger, the illegal side or possibly in the gray area between the two, there has been much activity on the Internet café front. Now, the term Internet café is confusing and used differently in different places. It may or may not mean an illegal, online gambling operation. Often, a clever entrepreneur uses the term and the reality while trying to walk a thin line between what is legal and what is not legal. I have not seen statistics on the states with Internet cafes, but it would seem there are more than one might think. Just in a week, there have been stories from Ohio, California, Florida and Oklahoma concerning Internet cafes. Ohio has had an ongoing debate in the legislature and among law enforcement agencies on the subject for a while now; a reporter for the Cleveland Plain Dealer suggested that it might help the lawmakers understand the subject if they actually went into one; he did and found the games to be very much like a slot machine, at least in his mind. Some analysts have even said that the Internet cafes in Ohio were reducing gambling in the actual casinos and thereby hurting the state’s budget. In any case, the Ohio House has voted to crackdown on them. In Florida and California the same debate is taking place, except at the municipal level; several major communities in Florida, Palm Beach and Tampa among them, have voted to restrict Internet cafes as have some communities in California. In Florida at least, every time a community outlaws the cafes, they simply move around the corner and start over. It is rather like watching Guys and Dolls, Big Julie needs a place to hold his floating crap game and even the sewer is not out of bounds if you have enough guys with some dough – Luck Be A Lady Tonight! The Ohio House has voted overwhelmingly to approve a crackdown on storefront gambling-like operations known as Internet cafes. The measure passed 66-29 Wednesday afternoon and now goes to the Senate. A similar House-passed measure failed to gain traction in the Ohio Senate last session. The measure imposes operating restrictions, registration requirements and background checks on the more than 800 operations around the state. Associated Press, 3-13-13 Tampa City Council members plan to stop the spread of Internet cafes that offer patrons sweepstakes-style gambling. Council members Thursday proposed an ordinance banning new sweepstakes cafes in the city and setting out a raft of new rules for the existing ones. Kevin Wiatrowski, Tampa Tribune, 2-21-13 Rancho Cordova leaders are moving swiftly to quash what they say are mini-casinos disguised as Internet cafes. Last week, the City Council approved a 45-day moratorium that prevents such businesses from opening while officials explore an ordinance to ban them outright…Typically found in neighborhood strip malls, the cafes contain computers that run casino games…The Justice Department issued an advisory in December calling the businesses “illegal gambling operations,” but enforcement often falls under the jurisdiction of local governments. Richard Chang, Sacramento Bee, 3-11-13 And there it stood until March 12th, when as the saying goes, the “stuff” hit the fan. Over a two day period, nearly 60 people were arrested in Florida and the lieutenant governor, Jennifer Carroll has resigned. There were arrests in other states as well; in Oklahoma a couple was arrested for providing the games that were being played in Florida. There have been warrants issued in 23 counties in Florida and in the states of South Carolina, Georgia, Alabama, Nevada and Pennsylvania. That is just two days worth of news, but it reflects six years of investigation by federal authorities. It appears, that unlike the lawmakers and law enforcers who have ignored, debated or skirted the legal issues of Internet café-ing, the federal government has been quite clear in its thinking; if it smells like a duck and walks like a duck – it is a duck. Or in the case of the Internet café, if looks like a slot machine and plays like a slot machine – it is a slot machine. Florida’s lieutenant governor resigned and nearly 60 other people were charged in a widening scandal of a purported veterans charity that authorities said Wednesday was a $300 million front for illegal gambling. Lt. Gov. Jennifer Carroll’s resignation came a day after she was questioned in the investigation. Her public relations firm did work for the St. Augustine-based charity Allied Veterans of the World, but she has not been accused of wrongdoing. Authorities said the probe involved 57 arrest warrants and 54 search warrants issued at gambling operations in 23 Florida counties and five other states: South Carolina, Georgia, Alabama, Nevada and Pennsylvania. Mike Schneider, Associated Press, 3-13-13 An Anadarko business owner and his wife are in custody after federal agents say they were involved in an illegal multi-million dollar gambling operation. The company, International Internet Technologies, was raided early Tuesday morning by federal agents. According to a lengthy federal search warrant, the owner of the company, Chase Burns, supplied gambling software to internet casinos in Florida. Federal agents say those casinos were posing as fundraising centers for veteran charities. But the vast majority of the more than $290-million profit was pocketed…According to the130-page federal search warrant, non-profit organization, Allied Veterans of the World started the alleged fundraising centers in 2007. But, during the federal investigation, federal agents learned those centers were nothing more than Internet Casinos…Agents believe International Technologies was the hub of the operation helping to run at least 50 Internet casinos in Florida. At one point, News 9 was told the company had about 40 employees. KWTV-TV, 3-12-13 Six Brevard “Internet casinos” operated by Allied Veterans of the World, Inc., were named in a federal search warrant as a sites of an “illegal gambling business.”… WJXX-TV in Jacksonville reported that several people, including leaders of Jacksonville’s Fraternal Order of Police, are in custody in connection with the same investigation. Andrew Ford, Florida Today, 3-13-12 Just when Big Julie and the guys thought luck was being a lady, lady luck turned cold and Big Julie and the guys rolled a seven and crapped out.