Florida Fails Its Counties

Those little mini-casinos, which continue to inhabit more and more strip malls throughout Manatee County and the rest of Florida, got yet another reprieve this week when Manatee County Commissioners gave a cold shoulder to Sheriff Brad Steube's pleas for legislative assistance. Often called “internet cafés,” these businesses operate within a shady legal loophole that every member of the Florida Legislature with an IQ above 70 understands is being knowingly abused. The state's outright refusal to act has nothing to do with the validity of Steube's concerns and everything to do with a tangled web of special interests.

They're marketed as “internet cafés,” which is code for all but perhaps a few unsuspecting foreigners that they are what would be better described as loophole casinos. To be clear, I'm not advocating for or against them. I'm addressing the ridiculous and legislatively irresponsible manner in which they currently operate. Were they to conduct their business in a straight-forward manner – pay to play games, have a chance to win money – they would, however, be illegal under current Florida law. Instead, these operations masquerade as businesses which sell internet connection time and offer “promotional sweepstakes” in which the customer can participate.

The statute that such operations use to shield themselves was designed to address businesses like car dealerships, McDonald's franchises and other merchants that routinely use scratch offs, coupon games and raffle drawings to attract customers to buy the actual products they sell, be it hamburgers, pick-up trucks, home appliances, etc. These casinos purport to sell phone cards which can be used to purchase the Internet time, that can then be used to participate in these “promotional games.” A less common model, often dubbed "adult arcades," uses slot machines which pay off in gift certificates.

The clear difference is that the sweepstake promotions in the businesses which the statute intends to cover are not the primary business they're engaged in – not even close. Everyone knows that no one is coming into these “cafés” to buy phone cards, which have been rendered all but obsolete in the age of unlimited cell phone minutes, and even unlimited international phone calls through online companies like Magic Jack and Vonage, not to mention technologies like Skype. And no one is going to what used to be called an Internet café, those coffee shop-type lounges where a bank of computers allowed travelers and curious seniors to check email when there wasn't a local library nearby. In the age of smart phones, they too have become relics in the dustbin of history.

Nonetheless, these businesses say that as the law is written, they are covered, and it seems they are correct. They sell something of value, give away sweepstakes entries, and customers participate in the sweepstakes, which involve chance, with the possibility of prizes from a finite pool. Plain and simple, someone found a loophole to exploit and once they were successful, more than a thousand such businesses have joined them in our state, dotting the strip mall landscape all across Florida, and they're growing faster than ever. Meanwhile, local law enforcement agencies, burdened by spikes in crime and civil complaints, have been asking for the same kind of help Sheriff Steube was in search of this week almost from the get go. And while some have successfully petitioned local governments to attempt to address the issue, it's become clear that only a state remedy will do. 

Now, typically this sort of thing is quickly resolved by the legislature with a bill amending a statue that's being exploited for something other than its intended use, especially when it's allowing someone to profit through an activity that is otherwise illegal. But this is Florida, where the legislature has never met a special interest it didn't like. Gambling was a cornerstone of the 2012 legislative session, where the state was widely expected to expand Vegas-style gambling, though a strong last-minute push by the Disney empire successfully contained those ambitions. But during all of the excitement, Internet cafés were tossed into the mix.

Several Florida Sheriffs and municipalities expected the state to address an issue that they saw as a simple case of closing an unintended loophole which was enabling illegal activity. Things looked even worse for this contingent when both the mega-casino lobby and the pari-mutuels began to pile on, accusing the operations of siphoning potential business without having to submit to the same regulations. But, this is Florida, where there's always room for one more pipe to drop cash into the trough. Internet cafés got organized and began to lobby for their interests in just the same way.

Many of the operators claim that they want the state to devise common sense regulations in order to weed out businesses that aren't above the board, tainting the reputation of the more scrupled establishments. But the Seminole Indian Tribe warns that legally recognizing these Internet cafés would violate their compact with the state and leave Tallahassee vulnerable to an enormous lawsuit. The triangular position gives the legislature an excuse to do what it does best – sit on its hands and collect money from lobbyists hoping to influence the delayed outcome (better known as kicking the can down the road in political parlance.)

Meanwhile, local law enforcement is taxed by the additional resources that small, largely unsecured, cash-heavy businesses run during late-night hours in otherwise empty shopping plazas tend to demand. Local governments are caught between tax-paying businesses, which are often springing up in otherwise vacant commercial properties, and the ridiculousness of wink-nodding toward something we all know is, in essence, illegal. And none of the parties can do much of anything until the industry's fate is decided, which doesn't seem likely to even be taken up until 2014.

I'm not one for regulating vice, especially in victimless crimes. I don't gamble, but I accept it as something in which prohibition simply does not work, driving it up the road or out of state when available, and further underground where it spawns even more crime without the tax revenue when it's not. But if these businesses are going to exist, they need to be clearly defined by statute and subject to the same sort of reasonable regulation as their counterparts. We're either a nation of laws or we're not. It's that simple. This sort of legal farce only further discredits a state that can scarcely afford to be taken any less seriously.

Dennis Maley's column appears every Thursday and Sunday in The Bradenton Times. He can be reached at dennis.maley@thebradentontimes.com. Click here to visit his column archive. You can also follow Dennis on Facebook. Sign up for a free email subscription and get The Bradenton Times' Thursday Weekly Recap and Sunday Edition delivered to your email box each week at no cost.