April 10, 2013

Arcade owners hire constitutional lawyer Bruce Rogow, prepare for legal challenge

Just hours after Gov. Rick Scott signed into law legislation that immediately outlawed machines operated by Internet cafes and senior arcades in Florida, more than 100 members of the Florida Arcades Association met in Pompano Beach with constitutional law expert Bruce Rogow and prepared to take the state to court.

"I think that there is probably no choice but to file a lawsuit," Rogow told the Associated Press after the 4 p.m. meeting called by Gale Fontaine, head of the arcades association.

Rogow said he believes that in their haste to give law enforcement additional tools to crackdown on illegal machines at Internet cafes throughout the state and maquinitas parlors in Miami, lawmakers also targeted arcade operators with vaguely-worded language that he considers arbitrary and irrational.

"It's not that they made these machines illegal; they just had to slow them down and hobble them,'' Rogow told the Herald/Times on Wednesday.

Rogow, an attorney based in Fort Lauderdale, said he believes there are several flaws in the law Florida lawmakers passed in reaction to the federal and state probe into Internet cafes operated by Allied Veterans of the World.

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April 02, 2013

Internet cafes' loss may be parimutuels' gain: legislators to ponder moving games

As the Florida Senate appears ready to outlaw the electronic slot machine-like games offered by Internet cafes, adult arcades and maquinita operators in Florida, there is talk that the machines will be resurrected next year.

Sen. John Thrasher, a St. Augustine Republican and chairman of the Senate Rules Committee, said Tuesday that he would like to consider allowing the machines to be operated at the dog tracks, horse traces and jai alai frontons throughout the state, which are currently regulated and paying taxes.

“As long as they’re regulated in the pari-mutuel facilities that’s something for us to talk about. I’ve always said if we are going to allow any expansion of gaming – which I’m not really for – the existing authorized, legitimate are where we should do it,” he said. 

Las Vegas-style slot machines are currently only allowed in the six parimutuel faciliites Miami Dade and Broward but in 2011 Thrasher proposed an amendment to a bill in the final hours of the legislative session that would have allowed the Jacksonsville greyhound track in his district to operate a copycat version, known as video lottery terminals, that allow players to play against each other, not the house. The amendment nearly derailed the end of session, but it didn't pass.

Now, Thrasher says, when the Florida Legislature returns next year to take a comprehensive look at the state's gambling laws, the issue should return. The House and Senate have set up select committees to study gaming regulation and come up with a proposal next year. The Senate committee is chaired by Sen. Garrett Richter, R-Naples, and the House's is chaired by Rep. Rob Schenck, R-Spring Hill.

“I suspect that when Sen. Richter does his deal next year that some of the pari-mutuels will come in and say ‘let us do it’ because we’re paying taxes – a high rate of taxes,'' he said.

 

 

March 31, 2013

Undercover slots expert lays out case against 'Internet cafes' and arcades

Working undercover as just another aging patron, D. Robert Sertell watched as customers streamed into Internet cafes in strip malls across Florida to buy access to Internet time or long-distance phone service.

As a national expert on slot machines, Sertell saw that the customers visiting the cafes operated by the Florida-based charity Allied Veterans of the World were not there to surf the web or make phone calls. They came to play what he contends are illegal slot machines, complete with spinning wheels, cash payouts, and names such as Captain Cash, Lucky Shamrocks and Money Bunny.

Using a mouse as their lever, and “sweepstakes” credits as their coins, customers played games that were nothing more than sophisticated, computerized slot machines, Sertell concluded after visiting 41 cafes, from Monroe County to Duval County, in early January.

“The little old ladies, whose eyes were fixated on the screen, would sit and play. Their hand never leaving the mouse,” he told the Herald/Times. “They refer to it as a casino. Every one of those machines is rigged. It’s a game of chance.”

Sertell, 71, known as “Father Slots” in the casino industry, is a slot machine expert from New Jersey who has built machines, written training and repair manuals and has become the expert of choice for law enforcement officials who want to know the difference between a computer that is rigged to operate like a slot machine and one that isn’t.

He is expected to be a key witness for state and federal prosecutors in arguing that the electronic sweepstakes machines run by Allied Veterans at their 49 Internet cafes in Florida were illegal gambling operations, operating under the guise of a charity. More here.

 

March 21, 2013

Scott remains noncommittal on Internet cafe ban

As the Florida House prepares to vote on its bill to ban Internet cafes in Florida, Gov. Rick Scott told the Miami Herald editorial board Thursday that he had not made up his mind on whether to support it or not.

"Everything is on the table,'' Scott said, refusing to indicate whether he supports the ban that has emerged as the Legislature's swift response to the criminal investigation into the Allied Veterans of the World, a chain of Internet cafes.

Police have arrested 57 individuals affiliated with Allied Veterans and have charged them with illegal gambling, money laundering and racketeering. The $300 million for-profit operation allegedly donated only 2 percent of its proceeds to charity.  

Legislators have quickly attempted to distance themselves from the fake charity, announcing they would donate thousands of dollars in contributions to legitimate veterans groups and other charities. According to a Herald/Times analysis, Allied Veterans and its operators and affiliates spent more than $1.4 million on candidates and committees in the last election cycle, most of it intended to influence the Florida Legislature. 

The Florida House raced to agenda a bill last week by Rep. Carlos Trujillo, R-Miami, that would clarify the state law to ensure that anyone operating electronic sweepstakes machines, adult arcades and maquinitas are illegal in Florida. 

The bill clarifies that web-based gambling devices are illegal because they are deemed games of chance and not games of skill. Trujillo said he will ask lawmakers to adopt an amendment today that clarifies that promotional giveaways, like those offered by fast food restaurants or car dealers, and children's arcades will continue to be allowed in Florida.

The ban is expected to shut down an estimated 1,000 gaming centers that have operated electronic casino-like games disguised as a sweepstakes or arcade games.

The bill clarifies existing law by prohibiting electronic gambling devices for charitable promotions, updates the definition of slot machines to include network-based machines like those used in Internet cafes and bans machines intended to simulate casino games and slot machines.

 

March 19, 2013

Legislators rush to return tainted campaign cash from Allied Vets chain

Shamed by the notion that they may have filled their political coffers with more than $1.4 million in campaign cash from a phony veterans group facing charges of illegal gambling, the Florida Legislature is scrambling to save face by donating the money to charity.

Rep. Steve Crisafulli, a Merritt Island Republican slated to be House speaker in 2016, sent a letter to his Republican colleagues Monday saying that he’s giving away the $3,500 in questionable cash he received to a local veterans group. He suggested other legislators do the same and even attached a list of the suspected companies.

“The information that has come to light regarding the Allied Veterans group and their affiliates is outrageous,’’ he wrote. “These allegations of fraud especially in the name of those who risk it all in defense of freedom and our nation — must be prosecuted and punished to the fullest extent of the law.”

Allied Veterans of the World and its 57 owners and operators have been charged with operating a $300 million racketeering, gambling and money laundering scheme under the guise of charity. A Herald/Times analysis found they used 60 different organizations and 34 individuals to steer more than $1.4 million to state and federal campaign accounts.

Investigators reported this week that one alleged conspirator, Nelson Cuba, former head of the Jacksonville Fraternal Order of Police, had $56,400 stuffed in a safe deposit box along with five million Iraqi dinars — worth $4,300. Police also seized $583,507 in cash, 59 vehicles and vessels, and froze $100.6 million in bank accounts, the Seminole County Sheriff’s office announced.

The list of politicians who were beneficiaries of the Allied Veteran’s political largess spans the political spectrum and reaches every corner of the state. More here. 

Absent a new accord, Calder and Gulfstream to race at same time

Eddie Plesa Jr. has been at Calder Casino and Race Course since the first horses hoofprints there. When the Miami Gardens track opened in 1971, his father was among the first trainers to set up shop.

Later, Plesa followed in his father’s footsteps, became one of the track’s top trainers, and supported the place in 1989 when it prevailed in a head-to-head racing battle against Hialeah — the only time in South Florida history that two of its three tracks ran concurrently.

“It was good to my parents,” Plesa said of Calder. “It’s been good to me.”

But Plesa’s long allegiance with Calder could soon end.

Unless a compromise is reached between Calder and Gulfstream Park, the two tracks will battle nose-to-nose starting July 6, a showdown that will force most trainers to choose sides.Mo re here.

March 18, 2013

Sen. Garrett Richter's Kentucky Derby ride offers a glimpse into Tallahassee's world

The head of the Senate Select Committee on Gaming has never served on a gaming committee and reminds people that he has a steep learning curve.

But Sen. Garrett Richter, R-Naples, is a horse racing fan who flew to the Kentucky Derby with Internet café lobbyist Dave Ramba and two other gaming lobbyists last year, where they sat on Millionaire’s Row. 

“I have been going to the Kentucky Derby every year since before I entered the Legislature,’’ Richter, a six-year legislative veteran, told the Herald/Times on Monday.

Richter’s wife and business partner, Gary Tice of Naples, also attended the event. Ramba told the Herald/Times Richter was one of “at least 20 to 30 legislators and that many lobbyists who took private jets to the Derby for House and Senate leadership fundraisers” during the May 4 and 5 event.

Unlike most years, the session began and ended early last year because of reapportionment and the Derby weekend was a perfect venue for collecting campaign cash for most lawmakers. But the high-end fundraiser, at one of the most prestigious gambling events in the nation, also offers a glimpse into the comfort with which legislators mingle with the same lobbyists who seek their votes.

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Senate panel moves Internet ban amid vigorous protests from operators

A Florida Senate committee followed the House lead on Monday and passed legislation to clarify state law to ban electronic sweepstakes games operated at Internet cafes in strip malls across the state.

The move comes less than a week after a federal and state investigation led to the arrest of 55 individuals in Florida and five other states on racketeering and corruptions charges linked to gaming centers run by the Allied Veterans, a purported charity that gave only 2 percent of their proceeds to veterans.

The fallout also prompted the resignation of Lt. Gov. Jennifer Carroll who previously represented the Allied Veterans in her consulting company and has led to one of the fastest legislative responses to a gambling probe in decades. 

The Senate Select Committee on Gaming voted unanimously to pass the bill, even amid concerns that there may be unintended consquences that could affect penny arcades for children and seniors. The House gaming committee passed a nearly identical bill on Friday and is expected to pass it on the House floor on Wednesday. 

The Senate committee spent most of the meeting laying the foundation for why the bill is needed this year, when they had planned to wait until next year to clarify the law, when they will attempt a sweeping rewrite of the state's gambling laws. 

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March 13, 2013

Legislators react to Carroll resignation, pitch Flores as replacement

Legislators reacted with sadness upon hearing the news Wednesday of the resignation of Lt. Gov. Jennifer Carroll but wasted no time considering replacements. 

"Jennifer Carroll is a very dear friend and anytime you see a friend go through something difficult, your heart goes out to them,” said Sen. Andy Gardiner, R-Orlando. "I think she did probably what was the right thing to keep the governor’s agenda moving forward. And so it won’t be a distraction. But it still hurts. It hurts for her, it hurts for her family.” 

Gardiner said he served in leadership in the Florida House with Carroll. “I just feel for her and her family,” he said.

Gardiner also said that he continues to believe Florida should “do away” with internet cafes. “I think they’re taking advantage of loophole in the law,” he said. “I’ve been pretty consistent. I don’t want to regulate them, I want to do away with them.”

Hours after Carroll's resignation, some South Florida political observers took to Twitter to recommend Sen. Anitere Flores, a Miami Republican, be tapped for the job. Their hashtag of choice: #Anitere4LT.

Sen. Nancy Detert, R-Venice, endorsed that idea. Flores "has all the great qualities of leadership. She's got the background, the experience,'' Detert said. "Geographically she fits. Being Hispanic doesn't hurt in Florida. She's an attractive candidate, smart woman...I don't know if she's interested or where she stands."

House Democratic Leader Perry Thurston called Carroll a dedicated public servant. "I'm very saddened by it,'' he said. "I wish the best to her and her family."

Rep. Dana Young, R-Tampa, said she was fond of Carroll. "She's going to definitely be missed in the Tampa Bay community because of her strong advocacy on behalf of the military and MacDill Air Force Base. We will miss her."
Republican Party of Florida director Lenny Curry, who is from Carroll's hometown of Jacksonville, called Carroll a "great leader for our party and our state.
"She was a terrific advocate for Florida’s military and economic development efforts,'' Curry said in a statement. "Her resignation is disappointing, but she made the right decision to protect both her family and the work she has done to move our state forward over the
last few years.”

Former Rep. Scott Plakon, R-Longwood, who has sponsored a bill to last year to ban internet cafes,  continued his push to get the Florida Senate to agreed to the effort. 

"The Florida House voted to shut down these illicit gambling operations last year,'' he said in a statement. "The Florida Cabinet unanimously agreed. It's now time for the Florida Senate to act to end this scourge on our state."

His bill was written by the general counsel for the Seminole County sheriff, the office that first began the probe and helped to draw federal investigators into the search.

 -- Rochelle Koff, Kathleen McGrory, Toluse Olorunnipa contributed to this report

March 12, 2013

Update: Internet gambling probe of Allied Vets grows, arrests now in Florida

Update: Jacksonville television is reportiong that the sweep has reached Florida and the head of a local gambling non-profit was arrested there this morning. 

Jerry Bass is the National Commander of Allied Veterans of the World Inc. and Affiliates, Action News Jacksonville reported. He was arrested and booked into the Duval County Jail this morning. His arrest is the result of a six-year long investigation that spans throughout Florida and other parts of the country. Here's their report.

Meanwhile, the Oklahoman reported yesterday that one of Florida's largest operators of internet cafes, Chase Burns of Florida Gaming Promotions and the International Internet Technolgies, is under federal investigation for operating illegal gambling operations in Florida.

Here's the story by reporter Nolan Clay:

Federal investigators allege the owner of an Anadarko company is involved in an illegal gambling operation in Florida that made more than $290 million.

The owner, Chase Burns, 37, denies wrongdoing. “That’s not true,” he said Monday. “What we do is legal.”

His company, International Internet Technologies LLC, supplied gambling software to Internet casinos in Florida that posed as fundraising centers for veterans’ charities, authorities allege.

The company, also known as IIT, has been paid more than $63 million for its computer work for the illegal gambling operation, authorities reported.

An Oklahoma City federal magistrate judge Monday authorized a search of the IIT building in Anadarko for evidence of “conspiracy, mail fraud, wire fraud, operating an illegal gambling business and money laundering.”

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