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Issue Date: Vol. 51, No. 5, May 2011, Posted On: 4/19/2011

Sweeps Video Crackdowns Reach Utah, Texas

Marcus Webb
sweepstakes video game, electronic sweepstakes game, gambling, U.S. Attorney John M. Bales, Mark Shurtlef, Internet cafe, amusement machine, video gambling, Internet gaming, Blue Sky Entertainment

After more than a year of police raids on sweepstakes videogames with cash prizes from Maine to Florida and in the Midwest, the pattern is spreading west, according to reports in USA Today and other sources.

In Utah, raids took place in March on Internet cafés in Salt Lake City and Ogden. One operator, Blue Sky Entertainment, has filed a lawsuit challenging the state's "fringe gambling" law, which was cited to justify the policy action.

Blue Sky owns bingo parlors; some of its electronic bingo machines are equipped with sweepstakes promotions. The lawsuit, which targets the state of Utah and its attorney general, Mark Shurtleff, as well as the city of Riverdale, argues that Utah's gambling statute is unconstitutionally vague.

Also in March, a federal judge in Beaumont, TX, sentenced the first of three sweepstakes operators to a year in federal prison following the group's conviction on felony gambling charges in the Eastern District of Texas, said U.S. Attorney John M. Bales. The other two defendants have yet to be sentenced.

The defendants were charged with operating an illegal, multimillion-dollar gambling enterprise, and two counts each for illegal gambling and money laundering operations, said Bales.

U.S. District Judge Thad Heartfield also ordered the forfeiture of a money judgment of $300,000 in gambling proceeds, as well as bank accounts containing about $80,000 cash and vehicles.

In court, prosecutors said the operators used sweepstakes "to attract patrons under the guise of Internet cafés and e-business centers" in the cities of Port Arthur, Beaumont, Nederland and Henderson.

The Texas case demonstrates the range of law enforcement resources that can be brought to bear against sweepstakes operators. It was investigated by the offices of the Texas Attorney General, Jefferson County Sheriff and Rusk County District Attorney, along with the police departments of Port Arthur, Nederland, Henderson and Dallas. The FBI was also involved.

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