The new casino?
Local Internet cafe owners say customers love their new ‘sweepstakes’ games. Law enforcement argues its just illegal gambling in a digital world.
There aren’t any flashing lights, bells, sirens or glitzy machines inside Web N More, an Internet cafe on El Camino Boulevard. Just 20 or so computer stations. But on this Wednesday afternoon, every single one is in use. A few people even have babies with them.
It’s also worth noting that no one is using the computers to surf the Web; customers play games that look similar to video slots or Keno. Posters on the wall detail the rules, odds of winning and payment schedules. A sign on the door says “Now open until 4 a.m. on Friday and Saturday!” A few weeks ago, a different sign read “No sunflower seeds allowed inside!”
Web N More is not a casino. But the Internet cafe is one of many new local businesses that offer gamblinglike games called “sweepstakes”—buy Internet time from a cashier; use that time to play the games on a computer’s Internet browser, and, just like at a Thunder Valley Casino Resort or Cache Creek Casino Resort, possibly win money.
They’re increasingly popular destinations in some of Sacramento’s more neglected neighborhoods. But are they legal?
The state’s attorneys general, and even local law enforcement, say no. Earlier this month, city police partnered with the Department of Justice’s Bureau of Gambling Control to shut down a south Sacramento Internet cafe called Copy Planet, which they say was in violation of three different California penal codes for offering illegal gambling. Authorities seized 30 computers with sweepstakes games on them and also $17,000 in cash.
Police Sgt. Andrew Pettit told SN&R the March 8 bust was about “putting people in check and letting them know that these types of places are illegal.”
But local Internet sweepstakes cafe owners insist that these games aren’t breaking any laws. They argue that they aren’t any different than giveaway contests at a fast-food restaurants such as McDonald’s, where customers are enticed to buy Cokes and a Big Macs with peel-away games or scratchers that boast prizes or even cash.
Jenn Schaefer, who’s managed Cinnbad’s Internet cafe and copy shop on Watt Avenue in North Highlands since October 2010, says she’s not trying to hide from the law. “We fully stand by what we’re doing,” she said. “We just want the laws to be out there and known.”
She explained how the sweepstakes-gaming process works at Cinnbad’s: Customers purchase Internet time and then receive a time card. They can sit down at one of the cafe’s 41 computer stations. Slide the card, go online, browse—or play one of several sweepstakes-style games. One has a gemstone theme, another Hercules or Robin Hood.
The games at most local clubs look a lot like digital slot machines you’d find in Reno or South Lake Tahoe. Other sweepstakes are simple, almost like digital versions of California Lottery scratchers.
“And customers can win anywhere from 2 cents up to about $1,500,” Schaefer said. Cinnbad’s is open until 2 a.m. every day except Friday and Saturday, when it remains open until 4 a.m. But Schaefer argued that Cinnbad’s does not meet the state’s three-prong definition of illegal gambling: Does it have a prize? Does it have chance? And does it have consideration?
“We lack consideration,” she argued. “There’s no skill here. What they’re purchasing is Internet time, and we use sweepstakes to get people to purchase more Internet time.”
One of the larger Internet sweepstakes-software manufacturers, Sweepscoach, which is headquartered in Sacramento, is quick to point out on its website that there are no laws, local or otherwise, that outlaw such gaming practices. Sweepscoach’s website uses the oft-cited McDonald’s analogy to assure potential clients that it’s OK to invest in its products.
SN&R put in a call to Sweepscoach, but it went unreturned by deadline. When asked to confirm if they were based out of Sacramento, the man who answered the phone, Kurt, responded, “I’m not commenting on that.”
Certainly, there is money to be made in this business. Sweepscoach claims that business owners can generate about $1,000 per month per computer machine. Web N More hosts about 20 machines. The I-Zone on Madison Avenue has 17, and Cinnbad’s, of course, has more than three dozen. That’s a lot of potential revenue.
This possibly explains why sweepstakes cafes also are popping up all over the country. Oakland and other East Bay cities have a handful. San Diego shut down most of its cafes when their popularity began skyrocketing a few years ago. And Florida and Ohio have seen huge growth, and state legislators have grappled with how to best regulate the new digital-world businesses. Attempts to ban them have been unsuccessful, and in Florida the cafes even have formed an organization to lobby on their behalf.
Here in Sacramento, however, the only mention of sweepstakes gaming in the county code has to do with bingo halls. Bingo halls aren’t allowed to host such activities, but, of course, these new establishments aren’t bingo halls. They’re Internet cafes.
County Sheriff Jason Ramos conceded that the recent Sacramento city police operation “was really an eye-opener” for his department. “We really have no idea how many of these places might be active in the county,” he told SN&R. He says they’re also trying to gain more information about the businesses to see if there is a trend.
Meanwhile, Schaefer at Cinnbad’s—which is in the unincorporated county—says she hopes to work with law enforcement. “Basically, we feel like people don’t know what the law is. It’s not exactly common-day law,” she said. “We’re happy to work with the police, we always have been.”
The police, meanwhile, might not be so accommodating. Sgt. Pettit says that while he only knows of “five or six” cafes, he says they can be lucrative gambling fronts. “These guys make deposits upward of $100,000 a month,” he said. Plus, the city also receives complaints about the cafes: loitering, underage kids frequenting the establishments, even customers parking in disabled stalls.
But the city, like the county, has no official stance on the cafes; a spokesperson said the city is deferring to the police department at this time.
Meanwhile, club owners say the cafes should remain open. “Like anything, a lot of our clients probably don’t have access to Internet at home,” explained Web N More’s Schaefer. “So, especially in a down economy, why not?”