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Saturday, Apr 19, 2014
Politics

Former sweepstakes cafes struggle after ban

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TAMPA -

One Internet sweepstakes café is now a bingo hall.

Another became a beer bar that the owner is trying to sell.

Three weeks after Gov. Rick Scott signed a bill outlawing sweeps cafes, what was once a booming business in Hillsborough County has gone bust.

State lawmakers and elected officials say the ban has eradicated at least 1,000 establishments of illicit activity. Owners of the businesses say their livelihood evaporated practically overnight.

“It’s killed us,” Shawn Brown, a manager at Busch Bingo, said of the ban. “We’re struggling to pay the bills right now.”

Brown, 38, said the former Internet sweepstakes café at 4962 E. Busch Blvd. used to be bustling and filled with customers. On Friday, the game room, which has been converted into a bingo hall that offers electronic and traditional paper games, was nearly empty.

Tables had been set up in the middle of the room with cups of colored bingo chips on them.

A row of electronic bingo games sat by the tinted front windows. Only three customers were playing. Behind them, a large bingo board on the back wall kept track of winning numbers.

Brown said his business started as a bingo hall, then added Internet sweeps machines. A day after Scott approved the ban, those machines were packed up and sent out the door, Brown said.

“Now we’re going back to what we had before,” he said. “What we built up over the past year and a half, we now have to start over again.”

Two years ago, cafes like Busch Bingo sprung up across the state, offering patrons who bought Internet time a chance at cash prizes. Players saw a slot machine on a computer screen, but owners said the winning numbers were predetermined, much like scratch-off tickets used as a promotion in fast-food restaurants and stores.

Legislators and law enforcement officials said the cafes were operating illegal gambling machines.

Hillsborough County Commissioner Kevin Beckner said the cafes were rife with fraud and racketeering.

“When you have a business that I believe is a form of illegal gambling and it impacts your society, preys on veterans and targets the poor, then these aren’t the types of business I want in my community.”

Before the statewide ban, the county commission and the Tampa City Council each voted to outlaw Internet cafes within their jurisdictions.

But it was former Lt. Gov. Jennifer Carroll’s past involvement with the state’s biggest café operator that sealed the businesses’ fate across the state.

Carroll resigned March 13, saying her previous ties to the St. Augustine-based Allied Veterans of the World would distract from Scott’s administration. She had done public relations work for Allied Veterans, which operated four cafes in Hillsborough and 36 others across the state.

In March, authorities arrested Allied owners on racketeering and money laundering charges. The nonprofit’s operators, who said they used proceeds from its cafes to help veterans’ charities, were keeping most of the money for themselves, investigators said.

Scott signed the bill outlawing cafes a month later, making it a third degree felony for anyone found to own, operate or “oversee a house or other place for unlawful gaming or gambling,” according to the law.

About 1,000 cafes in Florida had to shut down because of the new law, Scott said in a statement.

“The Legislature did the right thing to crack down on illegal gaming operators,” Scott said.

County Attorney Chip Fletcher said he didn’t have exact numbers but that “the vast majority” of Internet cafes in Hillsborough have gone out of business.

“There are still a couple operating, still contesting the law or trying to comply,” Fletcher said.

Richard Ratcliff, the owner of Bit Bar in downtown Tampa, said he’s just trying to keep his business afloat.

Bit Bar, 514 N. Franklin St., opened in February 2012, before the city approved a ban on Internet cafes. A row of electronic sweepstakes machines were along one wall and a beer bar took up the rest of the space.

The machines are still there but are no longer used for sweepstakes games, Ratcliff said. The bar is open, but Ratcliff said he can’t turn a profit without the electronic games or a liquor license that he can’t afford.

“It was helping our new business grow,” Ratcliff said about the gaming machines. “Now that’s it’s been banned, we’re in dire financial straits.”

Bit Bar once had a “melting pot of people” come through its doors, and the sweepstakes machines set it apart from other businesses downtown, he said.

“It was a concept we were trying to grow,” Ratcliff said.

The Allied Veterans case gave lawmakers the perfect chance to target Internet cafes, he said.

“It was a very calculated reaction,” Ratcliff said. “They seized an opportunity. With a stroke of a pen, 1,000 small businesses were shut down.”

The ban also affected adult arcades, which have machines offering merchandise as prizes.

Michael Wolfe, the attorney for the Florida Arcade Association, said he has filed a lawsuit in Broward County contesting the ban.

Adult arcades across the state are also having financial problems because of the new law.

“It’s become a hardship,” Wolfe said. “There’s a lot of frustration. They’ve managed to deep-six a lot of businesses.”

Brown, the manager of Busch Bingo, said lawmakers had a knee-jerk reaction to the Allied Veterans case.

“We followed the law. We paid our taxes,” Brown said. “Now we’re just trying to get back to where we used to be.”

Ratcliff said he and his investors are all under the age of 30 and Bit Bar was their chance to start up a legitimate business and, prior to the ban, a possible franchise.

“Bit Bar is open. Bit Bar is also for sale,” he said. “All our livelihoods have been taken from us.”


rreyes@tampatrib.com

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