Online Poker Companies Threatened by Florida Ban on Internet Café Sweepstakes
Rick Scott, governor of Florida, has approved a bill that will prevent adult arcades and Internet cafes, which offer video slots and other forms of gambling generally disapproved of by the state. Several Internet cafes ceased offering such gambling services after the governor approved the bill six days after it was passed by the senate. The bill proposing a ban on Internet café sweepstakes got 90 percent majority in both houses.
Florida quickly passed this bill because of a scandal involving misappropriation of $300 million. Allied Veterans of the World, a group that owned 49 percent of Internet café sweepstakes all over Florida, is allegedly involved in this misappropriation. Although the company claimed that it donated 70 percent of its proceeds to charities related to veterans, Florida authorities discovered that only 2 percent of the proceeds was directed to charities while the rest was pocketed by the owners of Allied Veterans of the World. The authorities released a report of their findings early in March.
Accordingly, Florida authorities cracked down on Internet café sweepstakes and arrested nearly 57 people. In connection with this scandal, Jennifer Carrol, lieutenant governor of Florida, who had endorsed Internet cafes owned by Allied Veterans, resigned.
The ban on Internet sweepstakes cafes and adult arcades includes a ban on transmission of electronic credits, currency, information, and anything else of value. The law defines electronic gambling devices as “slot machines,” irrespective of what they are used for. The language used by the bill has worried several e-gaming companies, fantasy sports players, online poker fans, as well as social network gamblers, who can be affected by this bill.
Two days after the bill was signed into law, Club WPT announced that Florida players will not be permitted to take part in its online poker sweepstakes. Club WPT informed its Florida customers that it will refund players if they make a deposit for its subscription services. Usually players deposit a sum of $20 to play online poker at Club WPT, but some of them send a monthly postcard to claim a sweepstakes entry into online poker tournaments.
The Florida government banned Internet café sweepstakes in a hurry also because of complaints that they were just online casinos thinly disguised as Internet cafes. Although the bill had no intention of shutting down online poker rooms, Club WPT decided to stay on the safe side because it could be argued that the bill applies to Internet poker too.
According to the new law, any computer accepting bills, bets, credit cards, and codes is illegal if it pays prizes worth over $0.75. Since the law does not distinguish between gambling devices in land-based casinos and personal computers at home, Club WPT feels that it could apply to online poker sweepstakes, which is why it decided withdraw from Florida.
Club WPT is the first company to take the law seriously, but more companies might withdraw from Florida. If Florida wants to legalize online poker, it will have to repeal this law at least partially.
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