Florida Governor Signs Anti-Sweeps Café Law, Possibly Outlawing Standard Features Of Legitimate Amusements

Posted On: 4/17/2013

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TAGS: Florida Legislature, Gov. Rick Scot, storefront online gambling, Internet cafe, sweepstakes cafés, HB 155, Allied Veterans of the World, electronic sweepstakes, coin-op games, bill acceptor ban, prize limit, prize-awarding machines, Florida adult arcade, café gaming centers, cashless card system, Dave & Buster's, Golden Tee Golf, Phil Juckem, All Brands Vending Co. Inc., jukebox operator

Unintended consequences impact arcade games; bans card, bill acceptance on some machines; limits redemption prize options

TALLAHASSEE, FL -- When the Florida Legislature is in session, a whole industry can be turned upside down in less than 30 days. On April 10, Gov. Rick Scott signed a law aimed at closing storefront online gambling operations known as Internet or sweepstakes cafés across Florida. That law, HB 155, was fast-tracked through the Legislature following the March 13 bust of Allied Veterans of the World, a Jacksonville-based gambling racket involved in electronic sweepstakes.

The measure is a reaction to the federal and state investigation into Allied Veterans that has led to 57 arrests for illegal gambling, money laundering and racketeering. Police allege that that the pseudo veterans group made $300 million in profits by operating illegal machines, but donated only 2% of its proceeds to charity. The investigation brought about the resignation of Lieutenant Gov. Jennifer Carroll, whose public relations firm worked for Allied Veterans.

Florida's House on March 22 approved HB 155, which passed the Senate on April 4. The bill alters the language used to describe slot machines and other gaming devices that players can use to win money. By changing the definition of a slot, lawmakers sought to close a loophole that has allowed Internet cafés operate and prosper in Florida. However, the measure also -- unintentionally and significantly -- impacts the legitimate amusement sector.

The bill states that prize-awarding machines cannot accept bills or smart cards, nor can they award gift cards or prizes deemed greater than 75¢ in value. In addition to legitimate amusements, these new rules affect "adult arcade" businesses, popular with retirees in many towns. (There are only about 220 adult arcades, sources tell VT, which have been legal in Florida since 1984 and peaked at about 350. But there are an estimated 1,000+ storefront Internet café gaming centers in the state.)

Of particular concern are multifunction cashless card systems used by Dave & Buster's and independent family entertainment centers in Florida. According to the letter of the law, redemption equipment would no longer be allowed to use card readers.

The bill could also affect amusement-only games like video and pinball by limiting the amount of free credits allowed. As soon as the governor's signature went on the bill, Incredible Technologies disabled certain features on its networked videogames, including Hole-In-Win on Golden Tee and Prize Play on Silver Strike. The videogame company, which has been offering skill-based contests on its ITNet system in Florida since 1996 without any legal or technical issues, is seeking clarification on the new law.

According to unconfirmed but reliable reports, the massive media coverage of the new law in various Florida communities has prompted some anxious location owners to ask their vendors to remove their equipment.

"It passed, it has been signed and it's now the law," said Phil Juckem of All Brands Vending Co. Inc., a music and games vending operation based in Tampa. "I'm comfortable with the legislative intent to eliminate sweepstakes cafés, but we'll have to wait and see how it might impact legitimate amusements." He observed that he'll need to determine how the new law will affect his products, and remains confident that it can be amended over the next year. "For starters, I no longer will be putting $15 movie passes in my Stackers."