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Legislature again defers action to shut illegal arcades

STORY BY EILEEN KELLEY, (Week of March 8, 2012)

A self-described crusader – who wants to abolish what he calls illegal gambling halls inside dark storefronts that claim to offer internet access – said he’ll be better armed during next year’s legislative session to take on the burgeoning internet café industry, including the dozens run by the well-heeled, Allied Veterans of the World.

Scott Plakon, R-Longview, tried for the second time this year to ban simulated gaming devises in internet cafes. The legislation passed the Florida House of Representatives last week but the measure was expected to go nowhere in the Senate before the session iss scheduled to end Friday.

Plakon, a conservative in every fashion, called internet cafes the crack cocaine of Florida. He and others say the storefront gambling operations do nothing but suck in people with the lure of striking it rich, but in the end create a whole spectrum of societal problems.

“There is big money in this,” Plakon said. “That’s money being extracted out of the poor and elderly.”

Early on, it appeared that Plakon’s bill would exempt Allied Veterans – which operates between 35 and 40 internet cafes across the state including one here in Indian River County just outside the Vero Beach city limits.

Now, Plakon says that group, which claims to give to money to veterans' organization, would not be exempt. “It’s an internet café,” he said. “They are one of the biggest.”

Allied Veterans started off with bingo parlors in the Panhandle in the 1970s. The organization moved to St. Augustine in 1999. In time after a thriving bingo business, the group set its sights on lucrative internet cafes.

The organization's motto is “Veterans helping Veterans” although many critics,  including Plakon, insist the group touts the veterans name as a marketing tool to appeal to people when actually it is just in business to make money. Its 2010 tax returns claim that revenues were $2.4 million, but there is no breakdown of its dozens of affiliates.

Michael Davis, a secretary of the group, told Hillsborough County Commissioners in December that his group has donated $6 million over the last four years. “Every day, I work with quality of life issues with our veterans,” he said.

Davis said the money given to veterans groups, which according to its tax filings include a $32,000 donation to the Homeless Family Center in Vero Beach, is raised through the internet cafes.

“Whenever I look into the eyes of these veterans I see the good work that we are able to do. It’s hard for me to believe that what we are doing is wrong,” Davis said.

Allied Veterans of the World has filed a lawsuit against Seminole County which has banned the gaming devises. The group's lawyer, Kelly Mathis , also represents the Children’s Cancer Cooperative whose founder and director is Harold Dukes, a South Carolina man who has three internet cafes in Indian River County and two in the works in St. Lucie County.

At least on paper so far, it does not appear that Mathis is behind the recent federal suit filed against Hillsborough County when it voted to ban the cafes.

Plakon said even if the group gives some money to charity, that doesn’t mean it is legitimate.

“Using that same theory, if a prostitute gives away 1 percent to charity, should we legalize prostitution?” Plakon asked.

The Allied Veterans ' website features photographs that haven’t been updated since 2010 and its “resources” page provides only a link to the U.S. Veterans’ Administration website.

“Anyone can call themselves a veterans' organization,” Plakon said. “What’s next? Billy Bob’s Tavern taking money from people under the veterans' name.”

About 1,000 internet cafes operate in Florida, and many people view them as illegal. For the most part, they don’t pay taxes and the gaming devices are not regulated.

Law enforcement officers throughout the state have swooped in and raided these cafes as other counties in addition to Hillsborough and Seminole have taken issue with them. Those government agencies are now fighting with the deep-pocketed owners in court.

Plakon’s bill to ban the devices which allow people to sit at terminals and play games that resemble Las Vegas-style gambling passed in House last week. While a victory for Plakon, it didn’t seem likely that the Senate would even vote on his bill.

The Senate has a different bill that calls for regulating the industry.

Plakon calls that measure an amnesty on something he says is clearly illegal. “One thing that is becoming obvious with these storefront casinos is that their only friends seem to be in the Florida Senate,” he said.

Gov. Rick Scott; Attorney General Pam Bondi, the Florida Chamber of Commerce, and the state’s sheriff’s association all favor banning simulated gaming devises in internet cafes.

“The only one standing in the way to solve the problem right now in Florida is the Florida Senate,” Plakon said last week.

Plakon predicted that if he has to come back next session to ban the simulated gaming devises, then instead of battling roughly 1,000 internet cafes, he’ll be battling 1,500.

That’s because the industry is growing so fast.

“It will be full steam ahead,” Plakon said the 2013 session. “The longer this goes on, the bigger the problem is going to get.”

The vote last Thursday largely went along party lines with a 72 to 43 in favor. Breaking from the pack of fellow Republicans, however, was Tom Goodson, a Baptist from Rockledge in Brevard County. Goodson represents portions of Indian River County.

Goodson did not return phone calls seeking comment on why he was supporting internet cafés.

Another Republican to break ranks was Matt Caldwell of Leigh Acres. He is reported to have admitted to a reporter that some internet cafés are run illegally.  However he said, the House measure to ban the simulated gaming devises at internet cafes was just a small part of the state’s gaming industry. Florida is the fourth biggest gaming state in the nation.

Kurt Stocks, a sales representative for SweepsCoach, a California-based company that provides start up service for internet sweepstakes cafés including distributing software, wasn’t alarmed or surprised by the House vote in Florida last week.

In fact, his company is pretty up on what is happening across the country when it comes to these storefront casinos.

“That’s been exactly what has been expected to happened for two months,” Stocks said of the House vote. He said the Senate’s leaning to regulate the industry seems to be the consensus of the entire multi-billion dollar industry in the country.

Regulating, said Stocks, won’t come with the rapid-fire response of lawsuits that scores of municipalities across the state are seeing after banning simulated gaming devises in internet cafes.

Hillsborough County officials said they are not enforcing that county's recent ban until there is clear direction from the state or Seminole County’s lawsuit.

“If I were in their (Hillsborough’s)position that’s the position I would take, otherwise you are putting the county in jeopardy,” Stocks said.

That’s an argument that internet café backers have been using for years when going up against local municipalities.

The Coalition of Florida Internet Cafes, a trade group, estimates that a full-on ban would put 13,000 Floridians out of work.

Plakon doesn't buy that number, claiming it’s a figment of the industry's imagination.

For starters, Plakon said that if the 20 or so internet cafes he’s been inside truly reflect the industry then the number of people working in these places is more to the tune of a few thousand, not 13,000.

His second argument goes to the heart of what’s going on inside the storefronts that claim to offer sweepstakes while people surf the internet.

“If that is really what is going on, then a ban (on simulated gaming devises) should not have any significant impact on the business and loss of jobs,” Plakon said.

Prior to the third reading of the bill before its passage last week, one state representative, a Democrat, predicted the ban would be dead on arrival in the Senate and said the House vote was one of posturing.

“This bill is stone cold dead when it hits the senate,” said Key West's Ron Saunders. “I do think it will pass (the House) today. Why? Because it gives people an opportunity to go back home and say, ‘I voted against gambling.’”