Three nondescript printing shops nestled in Carson retail strips were stormed by sheriff’s deputies recently in a crackdown on what they describe as illegal Internet gambling operations.
More than 100 pieces of evidence, including computers and bookkeeping tools, were seized from the businesses, which appeared to be ordinary copy shops but, in fact, were so-called Internet sweepstakes cafes.
“It’s a new trend that’s popping up, and a lot of people are unsure if it’s gambling,” Los Angeles County sheriff’s Sgt. Charles Cabarrubias said. “We’ve determined that it is gambling.”
The computer games in question mimic highly regulated casino games such as slot machines, which can only be legally played in California at Indian and commercial casinos.
On July 10, a team of Carson sheriff’s deputies led by Cabarrubias served search warrants at Internet Shack, Carson Biz Place and Tel Connect & Sweepstakes. One person was arrested during the operation on suspicion of possessing illegal slot machines. Sheriff’s investigators intend to seek prosecution against all three shops for having illegal slots.
The Internet sweepstakes cafes have spread like wildfire across the country in the past few years, though they have been catching the occasional attention of law enforcement for at least a decade.
In December 2012, the state attorney general’s Bureau of Gambling Control issued its first opinion on the issue to law enforcement officials, declaring the shops to be illegal. Hundreds of such shops exist statewide, but the Attorney General’s Office says it does not have the resources to investigate and prosecute them.
“Due to cuts to (the Department of Justice) and our now very limited resources and personnel, we are not capable of handling the hundreds of Internet cafes on our own,” the agency said in a written advisory. “Local agencies can use the AG’s advisory at their discretion. We have been leaving it up to the local jurisdiction on how they want to proceed. Some choose to go after them administratively, some choose criminal prosecution, and some do nothing at all,” generally in fear of being sued.
Proponents of the cafes argue that these games don’t constitute gambling, but instead are the same as promotional sweepstakes drawings like those offered by fast-food chains and other businesses.
Inside these cafes, customers first purchase cards for Internet or long-distance phone calls. But instead of using the cards for that purpose, they buy credits that translate to “entries” into sweepstakes games on personal computers inside the stores. The games closely mimic those of slot machines, with cartoon images of fruit, animals and other characters on simulated spinning wheels. Players rack up “sweepstakes credits” that they can exchange for cash.
An attorney representing one of the Carson businesses targeted by the Sheriff’s Department was not available to answer questions Thursday. But an analysis of the issue released this year by the American Gaming Association said the businesses generally defend themselves on small technical points to prove that gambling isn’t actually taking place. A popular argument is that they aren’t games of chance because winners and losers are pre-determined before the games are played.
“When they try to deny the role of chance in their sweepstakes games, cafe advocates emphasize that whether the customer wins or loses is already determined at the moment the customer acquires her swipe card or access number,” the AGA states in the report. “Nothing about the playing of the game changes the predetermined outcome.”
The association argues that the games are still random, even if the outcome is determined before the game is actually played.
Cabarrubias said similar cafes in Hacienda Heights were searched earlier this year, and that they are prevalent throughout Los Angeles County. Sheriff’s investigators did not return calls Thursday about the Hacienda Heights operation.
This week, signs remained outside Carson’s three Internet sweepstakes cafes advertising faxing, copying and printing services along with Internet games and email and online chat access. A colorful sign outside Internet Shack at 23409 S. Main St. advertised free pizza for customers on Friday nights.
The American Gaming Association’s recent report indicates that promotional food and drink specials are commonly used to entice players to stay longer. Large profits and low capital investment requirements for owners of the Internet cafes have prompted aggressive litigation against government regulation attempts. The report states that nationwide profits for sweepstakes cafes are estimated to be about $10 billion.
These “gambling venues are free of the legal restraints that Americans have traditionally demanded for gambling businesses,” the report states. Unlike casinos, the cafe owners and managers aren’t required to pass criminal background checks, and the fairness and integrity of the games aren’t checked. What’s more, cafes don’t have to pay gaming taxes, exclude underage gamblers or require problem gamblers to get help, as do legitimate casinos.
When Carson officials learned earlier this year that the shops had been declared illegal by state law enforcement officials, sheriff’s investigators began making undercover visits. They played games and observed how the businesses were run, Cabarrubias said.
“The stores were very popular,” he said. “People would load their card with money. The shops kept their information in a database. Their computer software predicts who wins.”
sandy.mazza@dailybreeze.com
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