County continues to grapple with ‘recent phenomenon’ of Internet-gambling cafes By Raheem F. Hosseini 12.13.12. News and Review

You are such a slot.

Such was the message Sacramento County supervisors delivered last week to a minimart hoping to separate itself from a raft of internet-cafe gambling fronts ka-chinging throughout the state.

Earlier this year, when the county rejected Town & Country Mini Mart’s bid for a business license, it was because owner Paul Avery neglected to mention his Fulton Avenue shop’s primary source of income: rows of computer terminals that allow customers to play “sweepstakes” games like keno and poker. All customers need to do to is purchase Internet time.

According to the county, this is enough to make the computer terminals de facto slot machines, which are prohibited under state law. (Unless they are on recognized American Indian lands, of course.)

Avery and his attorney, Kathleen Finnerty, argued that customers could use the purchased computer time to conduct other business, and that the games met the legal definition of electronic sweepstakes similar to ones offered by McDonald’s and Visa.

“Although these sweepstakes games can resemble gambling, so too do any sweepstakes games,” Finnerty contended. “The fact that they’re conducted electronically doesn’t change the nature of the lawful sweepstakes.”

Despite this being their first brush with this phenomenon, county supervisors didn’t spend much time parsing the legal differences between gambling devices and electronic sweepstakes. The latter are permitted under the county’s business and professions code, said deputy county counsel John E. Reed.

Following the board’s unanimous decision, Finnerty said Avery closed his business and laid off a handful of employees, rather than invite the possibility of fines and criminal charges.

But Avery’s wasn’t the only ambiguous gaming business around these parts.

According to law enforcement, Sacramento has experienced a “recent phenomenon” of so-called Internet-cafe businesses operating as fronts for gambling, especially in poorer neighborhoods.

Within the last month, the sheriff’s department’s Special Investigations Intelligence Bureau conducted an enforcement operation on a number of these businesses, said spokesman Deputy Jason Ramos.

But defining the scope of this “phenomenon” remains difficult. There are no firm numbers describing how many Internet cafes and copy shops may be running electronic gambling machines in Sacramento or elsewhere. That’s because law enforcement only really learned of the problem a few years ago, said Aaron Wong, acting special agent in charge of the Department of Justice’s Bureau of Gambling Control’s Northern California compliance and enforcement section. The DOJ’s first encounter with these kinds of businesses was in Stockton, roughly four years ago.

“It sounds legitimate,” he told SN&R of these pseudo Internet cafes. “But these things usually open up in poverty-stricken neighborhoods. They draw from folks who don’t have the means to get themselves to a casino. It’s a shame because these are the same folks who probably can’t afford to lose the 30, 40 bucks.”

These plain-sight gambling halls have been easier to spot since Internet cafes went the way of pagers and silk shirts. And once inside, the businesses’ true purpose is usually evident, Wong said. There are rows of computer terminals with video slot-style games pinging and ringing throughout the main entryway.

All of which should make them easier to shut down. But the argument that they’re offering sweepstakes games makes them harder to kill.

Finnerty told SN&R that supervisors ignored the legal nuances that distinguish gambling from sweepstakes.

“I believe an appeal is well-founded to obtain a proper legal view of these issues, but no decision has been made on that yet,” she said.