March 15, 2013

House panel passes bill to outlaw illegal gambling machines

The bill to ban online slot machines at Internet cafes, including maquinitas in Miami-Dade, was prompted by this week’s arrest of dozens of individuals connected to a statewide illegal gambling operation.

The online slot machines operated by strip mall Internet cafes, adult arcades and Miami-based maquinitas will be officially outlawed under a bill passed by a House panel on Friday.

In a 15-1 vote, the House Select Committee passed the bill (HB 155) just days after state and federal authorities arrested 57 individuals with ties to Jacksonville-based Allied Veterans of the World, a purported veterans charity organization that ran an illegal gambling operation.

The House measure, sponsored by Rep. Carlos Trujillo, R-Miami, makes web-based gambling devices illegal because they are deemed games of chance and not games of skill, as promoters claim. Under the bill, promotional giveaways, like those offered by fast food restaurants or car dealers, will be allowed, but electronic casino-like games disguised as a sweepstakes or arcade game will be banned.

The bill was supported by an unusual coalition that included the Florida Chamber of Commerce, the pari-mutuel industry, the greyhound racing association and the Florida Baptist Convention. No one spoke in support of preserving or regulating the Internet cafes.

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.

Trujillo filed his bill to outlaw the games before the state and federal Allied Veterans investigation was announced this week. A similar bill was passed by the Florida House last year, but failed in the Senate, where lawmakers wanted to regulate but not ban them.

Trujillo said the legislation was needed because these cases are "extremely difficult to prosecute and extremely costly...The operators and promoters are very creative and they basically skirted around state law and it comes down to a battle of experts. And the experts have to decide, are these games of skill or games of chance?"

The Senate on Monday is set to take up a bill that is “similar or identical to the House’s bill,’’ said Sen. Garrett Richter, R-Naples, chairman of the Senate Gaming Committee. Legislative leaders expect to have the bill reach the governor’s desk by the end of the month.

The lone lawmaker to oppose the House bill on Friday was Rep. Jim Waldman, D-Coconut Creek. He said the state should be regulating not outlawing the games, and that House leaders are rushing to approve legislation as a "knee-jerk reaction" to the Allied Veterans investigation.

"The fact is, nothing that we do today will affect those prosecutions from those arrests,” he said. “If it was illegal before, it’s still illegal."

Investigators say Jacksonville-based Allied Veterans and its affiliates collected almost $300 million from illegal gambling operations at 49 Internet cafes in Florida and gave just $6 million to veteran groups.

Lt. Gov. Jennifer Carroll resigned from office earlier this week after being interviewed by the Florida Department of Law Enforcement in connection with the Allied Veterans investigation. She had a public relations consulting firm that had represented Allied Veterans. She has not been charged with any crime and is cooperating with authorities.

Police estimate that Allied Veterans and its operators steered $2 million in campaign contributions to politicians throughout the state at a time when prosecutors were urging lawmakers to clarify the law and make it easier for them to prosecute.

On Friday, the Republican Party of Florida announced it will donate $300,000 to the non-profit Florida Veterans Foundation after learning it had recevied political contributions from Allied Veterans.

"We have zero tolerance for this kind of activity," said RPOF Chairman Lenny Curry in a statement. "It is outrageous to all Floridians that anyone would use our veterans as a front for criminal actions."

The fall of the fast-climbing business is happening with mercurial speed in Florida. In the wake of the federal probe, most of the operators affiliated with Allied Veterans have shut down.

Internet cafes are not regulated by the state, but have been allowed to operate under regulation in several municipalities, including Hialeah and Jacksonville. Police have succeeded in closing down operators in some areas while in others courts have ruled the law is too vague to prevent them from operating.

“I was hoping to do a comprehensive approach but the events have pre-empted that,’’ Richter, the Senate gaming chairman said. “The House is making a statement with its bill and the Senate is going to make a similar statement: they are illegal.”

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