Sweepstakes Trial Reveals Contradiction of States Claim

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More Evidence Points Toward Florida Regulators Gave OK To Internet Cafes

Sanford, Fla., October 5, 2013 – The defense team for Kelly Mathis presented evidence last week that confirmed Allied Veteran’s Internet Cafe business was legal. After the State rested unexpectedly on Monday September 30, 2013,

 

Court Heard Defense Evidence That Top Florida Officials Gave OK To Internet Cafes

Judge Kenneth Lester agreed with defense lawyers and dismissed over 50 money laundering counts that had been filed against Mathis. Over 100 counts remain. The defense then started its case on October 2, 2013.

Lead defense attorney Mitch Stone began by presenting evidence of Florida’s Department of Agriculture and Consumer Services position that the Internet cafe sweepstakes promotion business model was legal. A training program created in 2007 confirmed exactly what Mathis had later determined after researching the law for his client, Allied Veterans. The defense then presented a series of witnesses who agreed with Mathis.
Retired City of Jacksonville Office of General Counsel supervisor Steve Rohan testified the Internet Cafes managed by the non-profit Allied Veterans of the World, Inc. and Affiliates were operating within state law. He testified Mathis met with him and other city lawyers. Rohan testified he could have rejected Mathis’Pre-Reveal-Gold legal analysis if he had read the law differently. However, he and other lawyers agreed with Mathis. The jury was only permitted to hear part of his testimony due to the court prohibiting evidence of local regulatory ordinances and recent state legislation concerning the Internet cafe sweepstakes game promotion business model.
Former Assistant State Attorney Daniel Leising, who headed up a law enforcement task force concerning the Internet Cafe businesses in Volusia County in 2008, also testified that Mathis met with him and offered information about his client and the law. Leising confirmed he and other lawyers and law enforcement officers could have rejected Mathis’ legal conclusions but didn’t. In the end, no arrests of any Internet cafe owners resulted from that task force investigation implying that the State Attorney’s Office and Volusia County law enforcement officers agreed the Allied Veterans business model was legal.
Current State Attorney Supervisor Karen Foxman also testified that when she was in private practice her firm represented Allied Veterans and she paired with Mathis to meet with three separate prosecutors to discuss the law and facts regarding the Internet cafe sweepstakes promotion. She confirmed that the reason for the meetings was to provide information to prosecutors and law enforcement. Again no arrests resulted implying Mathis’ analysis of the law was accurate.
Additional witnesses for the defense included a current Jacksonville Sheriff’s office sergeant and the compliance officer for the City of Jacksonville who also confirmed that prosecutors, city lawyers, public officials and politicians agreed the Internet cafe sweepstakes game promotion was legal. Again, the testimony they provided to the jury was limited by the court.

The defense ended the week by presenting a computer software expert who ran an independent lab that tested the software used by Allied Veterans four separate times from 2008 to 2011. Nick Farley testified the software was designed to sell internet time and offer a free sweepstakes game promotion to customers. Farley confirmed the screen images that simulated casino style games

WIN-CAFE Offers Simulated Casino-Theme Games

did not make a difference as to how the software worked. Farley also testified that the State has never had an expert test the software and never challenged his findings scientifically. The State also never spoke to him before deciding to arrest 57 people based on allegations the computers were running illegal slot machine software.

Wesley Stayte, a computer software developer, also confirmed this was sweepstakes software and that the images did not mean the computers were running slot machine software. Stayte confirmed that the sweepstakes software would be illegal if used in real Las Vegas style slot machines. He confirmed the software for Allied Veterans was designed to provide predetermined entries from finite pools and not randomly generated outcomes, an important distinction under the law.
Defense attorney Lee Lockett presented witnesses who confirmed Mathis would never break the law. Mathis served as president of the Jacksonville Bar Association

Jacksonville Bar Association

in 2006, just months before taking on Allied Veterans as a client. Such a position is a major achievement reserved for lawyers who are highly respected for their integrity and legal abilities. Mathis was described by witnesses as a law abiding citizen who would never risk his family or professional reputation for any amount of money.

Stone said the evidence presented by the defense is based on the truth and the truth confirms Mathis did nothing illegal. Stone also said the evidence verifies Mathis was practicing law for a client and was not a business owner or partner which also proves that the State should never have charged Mathis.
The case is scheduled to conclude next week.

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Judge Drops Over 50 Charges, Mathis Trial Continues

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SANFORD Florida –  Over 50 money laundering charges were dropped Tuesday against Kelly Mathis, a Jacksonville lawyer who advised a internet sweepstakes cafe chain.jury trial

After Circuit Court Judge Kenneth Lester Jr. dismissed the a third of the charges, attorney Kelly Mathis noted he still faced more than 100 charges and said “I didn’t do anything wrong and we’re going to continue to fight this,”  His defense is scheduled to present its case Wednesday morning.

The case involving a nationwide chain of internet sweepstakes cafes where the state accused Mathis and numerous co-defendants of running an illegal gambling operation under the guise of operating a legal sweepstakes program that rewarded customers who bought internet time and other promoted products like phone and internet time.

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Internet Cafe’s Around State Using New Compliant Game Software

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BanBuster Games Spread One Parlor At A Time 

Two Brunswick County internet sweepstakes companies which were shut down are suing the city and state. On May 22, separate suits were filed by the companies at the Brunswick County Superior Court for Pre-Reveal-Goldseizing their operations without proper review. A refund of fees paid to the towns since 2010 is sought for, when municipalities statewide were allowed to increase the fees charged for operating a sweepstakes business.

 

Bans on sweepstakes gambling took effect in December and the suits are part of the larger legal battles and backlash sweeping the state. District Attorneys Ben David and Jon David were prompted by the ban to send a joint letter in January to law enforcement confirming that they would prosecute violations related to sweepstakes laws. Together the two represent New Hanover, Pender, Brunswick, Columbus and Bladen counties.

The plaintiffs in the cases – Internet Café and Sweepstakes in Leland and Calabash, were shut down by a crackdown on their operations. The same registered agent is listed by State records for the two sweepstakes parlors.

The towns and the county’s sheriffs and the district attorney’s officers did not properly inspect the operations to see if they were in compliance with state law (known as PreReveal or BanBuster Games”), the suits allege. They were not given due process despite reaching out to the enforcement agencies, the complaints state, and neither did they violate the rules under the new laws.

The suit says, “The defendants have refused to conduct a review … in order to determine compliance with applicable law because they hope instead to intimidate.”

A complaint that the privilege license fees, yearly charges based on the number of machines at a store, were upped to oppressive and unconstitutional levels, was also listed in the suit.

Both stores are seeking for refunds, the Calabash store is looking for a refund of $76,900 while the Leland store is seeking a refund of $43,850 over the course of two years.

“…. collection of unlawful privilege license fees was an abuse of (the towns’) discretion,” it reads.

An attorney with Morrisville-based Morningstar Law Group, Keith Anthony, could not comment on the lawsuits, he said.

Anthony said “Our clients have not authorized us to answer any questions directly.”

According to Libby Carlisle, assistant to Jon David, the defendants in the two cases are being represented by the N.C. Attorney General’s office. She said that the state filed a motion on July 5 to get the cases dismissed.

A spokeswoman for the attorney general’s office, Noelle Talley, said that in the region the department is also handling another case in Elizabeth City.

Talley said that “We believe the law and the ruling are clear, and we’re vigorously defending their enforcement.”

Meanwhile in New Hanover Country and Pender Country, Samantha Dooies, assistant to Ben David, said she is not aware of any lawsuits involving her office.

Enforcement will continue, she said.

Dooies also said that “The District Attorney’s Office continues to enforce the laws concerning sweepstakes throughout the district and encourages business owners needing guidance about the laws to seek legal counsel.”

Anthony represents several other clients elsewhere in the state.

“There are currently, including these two, six of them that we have filed statewide,” he said.

There have been some criminal cases in which rulings favored the former sweepstakes owners while the civil cases are pending, Anthony said. A Jackson County convenience store manager was found not guilty on a misdemeanor charge on Tuesday, by a District Court Judge, for operating a sweepstakes machines at his store, according to a news release from his attorney.

There have also been recent acquittals for two defendants in District Court cases both in Catawba and Macon counties and an unresolved lawsuit in Macon Country which seeks an injunction declaring that specific machines do not violate the North Carolina statute.

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How The Internet Cafe Ban Outlawed Your Smartphone

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In a rush to monopolize the gambling industry within the State of Florida, along with a steady push from Indian tribe casino lobbyist, Florida and HB-155 may have accidentally

HB-155 OUTLAWS SMARTPHONES

banned every computer and smartphone in the state. How could such an event take place ? It comes from a very poor worded house bill 155 and a money hungry legislation.

The purpose of the ban, in some people’s opinion, had 3 objectives, 1) kill Internet cafes that allowed playing games like bingo and other slots-type games. 2) kill competition for the current casinos and 3) begin the process of establishing a video lottery terminal (VLT) program for the state to help their budget woes. Over a thousand of those Internet cafes were forced to shut down in Florida after the bill went into effect in April but it looks like Florida may have overlooked a few major details within the text of the bill whilst killing 15000 Internet cafe jobs.

Consuelo Zapata, an owner of one of those Internet cafes that got shut down is fighting back and has discovered that in the process of shutting down Internet cafes, Florida might have just banned all computers and smartphones altogether.

As with any law, the key is the wording of what was banned, or the definition of what Is being regulated (much like a speed limit sign).

The ban defines illegal slot machines as any “system or network of devices” that may be used in a game of chance.

Obviously “any system or network of devices” is a pretty broad definition which means it can be applied to “any number of devices”, according to Miami law firm Kluger, Kaplan, Silverman, Katzen & Levine. Zapata is now suing the state in hopes that the court calls the Internet cafe ban unconstitutional.

However, law experts from around the country have their eyes on this case because it may have a variety of outcomes depending on which way it unfolds.

The hypothetical that a Florida law may ban the very technology that every law enforcement officer, judge and legislator have clipped on their belt or tucked in their purse is confusing to say the least. According to a variety of polls, anywhere from 58-63% of Floridians use smartphones and close to 90% of people across the state have some sort of Internet access.

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After Sweepstakes Banned In Florida, Politicians Look At VLTs

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A couple of weeks ago, a guy possibly in his mid- to late-60s peered in the window of a now-closed Internet cafe in Suntree, FloridA..

1-877-WIN_CAFE Sweepstakes Players

He jerked the door a couple times, straining as god looked once again through the window, before getting into his auto and driving off.

Clearly, he wasn’t satisfied. And it would be a good estimate god had not heard that Gov. Rick Scott had rapidly shut down the Internet cafes, as well as the grownup games.

The guy wasn’t alone.

Likewise more than a little miffed concerning the closings of the Internet cafes and elderly galleries– great euphemisms for gaming houses– was Ralph Perrone Sr. of Perrone Properties on Merritt Island. In short order, Perrone lost 6 renters in buildings he owns and thousands of dollars each month in lease payments.

Three of his tenants turned their keys in immediately after Scott signed the legislation; 2 more did so last week. He hasn’t heard yet from the 6th, but god’s not holding out hope the renter is visiting return with a Plan B and find an additional usage for the residential property.

“It’s not visiting be effortless to locate tenants for these spots,” said Perrone, who, nonetheless, has a few nibbles on a few his homes.

Much more pleased with Scott’s action was Pat Biddix, the president and general manager of Melbourne Greyhound Park. Biddix is awaiting the green light to construct a $30 million to $50 million gambling casino like what’s offered at tracks in Broward and Dade regions.

The Melbourne center, with a bistro and amusement location, would certainly be on 200 acres between Eau Gallie Boulevard and Sarno Road, simply a brief drive where Hard Rock Hotel and Casinos bus motorists now on a regular basis whisk location gamblers to Tampa.

Biddix is a charming, though matter-of-fact guy. So when I asked him last week if god smiled with Scott’s activity to shut down the games and Internet cafe, god offered the anticipated answer.

“Yes! Heavens yes!” Biddix replied.

“Both the Internet cafes and the arcades with fixed machines had to be put out of business,” Biddix stated. “First of all, they were absolutely uncontrolled and there was no protection for the patrons whatsoever. And the businesses just weren’t taxed whatsoever shape or form. No city, no region and certainly not the state got any kind of tax income from them.

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State Ran Internet Casinos Might Be The Next Expansion Of Gambling With Silent Launch Of FloridaVLT

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Gov. Rick Scott formally made internet cafes go kaput Wednesday mid-day, when he authorized legislation that bans up until 1,000 internet gaming stores around the condition.

1-877-WIN-CAFE Sweepstakes Players

The new law is in large part thanks to Allied Veterans, an internet cafe operator whose officials were detained in March on racketeering charges after an investigation by the IRS and Secret Service.

Allied was implicated of money laundering after the team presumably made use of money from its nonprofit for individual gain and by primarily lying concerning the specific amount of money it donated to charities (pointer: It tried to keep a whole lot more than it donated).

Authorities claim that the internet cafes’ previous president received more than $1.5 million while the group contributed to charities just 2 percent of the $290 million it increased.

Scott signed the bill in to law along with a quick statement stating that lawmakers “did the right point to suppress illegal gaming drivers.”.

His previous lieutenant governor, Jennifer Carroll, was forced to resign last month because of her link with Allied.

When lawmakers gatheringed to vote on the step last week, the last tally was extremely for passing the restriction.

Those uneasy concerning this new law argue that it will likely deliver an end to senior galleries, because most of the stores that the bill targets enable their customers to play sweepstakes games that simulate coin-operated machine.

Just last week, the Florida Arcade Association composed a character to legislative leaders discussing that the ban will certainly put cafes and galleries out of business.

Now, after hearing of Scott signing the bill, they point out thousands will certainly shed jobs.

“With the stroke of the governor’s pen, thousands of opportunities were shed today,” said Florida Arcade Association President Gale Fontaine in feedback to the bill’s coming to be law.

“With all the initiative that is put into this state to produce jobs, it is unconscionable that the condition is acting to place people in the joblessness line. All of us recognize and sustain shutting down underhanded Internet cafes, yet this new law throws away the proverbial baby along with the bath water. The new law is generating anxiety amongst businessmen throughout the state due to its vagueness and shortage of clarity.”.

The law will certainly now call for arcade consumers to utilize just coins or tokens as opposed to dollar bills to play a game. Florida Arcade Association says that the law will not enable companies the appropriate change time to adhere to the law without feeling the effects negatively.

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Sweepstakes And Adult Arcades Closings Open Door To Video Lottery Terminals

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The future for Internet cafes in Florida looks rather severe. On Friday the Florida House

1-877-WIN-CAFE Sweepstakes Player

voted extremely to accept a restriction on the cafes. Most expect the Senate will certainly do the same and deliver the bill to Gov. Rick Scott.

As it happened, dozens of people gathered facing Spinners Sweepstakes Cafe in Spring Hill to ask condition lawmakers to reevaluate.
“I’m horrified by the words that are being referred to us,” claimed Terry Kasberg, owner of Spinners. “They have to leave their seats up there and come down and in fact check out one of these spots; they really should.”.
Lawmakers are acting after a Florida Department of Law Enforcement inspection into the Allied Veterans of the World charity. Investigators accused drivers of running a $290 million prohibited gambling business that lined the pockets of its owners rather than helping charities like it was supposed to.
“This will certainly be among the largest tightenings of gaming that we’ve experienced in our state certainly over the last 50 or 100 years,” pointed out Rep. Carlos Trujillo, R-Miami and enroller of the restriction. “It sends out a message to all the people who are available stealing from seniors and making use of the good names of veterans. We do not prefer you listed here in Florida. You weren’t welcome before. You won’t be welcome in the future.”.
The house voted 108-7 for the bill. Kasberg hopes the senate provides it a second-look prior to acting.
“I’m hoping that they will pause this and actually take into consideration the impact it’s going to have on family members … really consider it strongly,” he pointed out. “My wife and I – we placed everything we had into this business. We put over $100,000 into this company. We borrowed money along with secured financings to begin this business. If we’re folded … it’s visiting affect us profoundly. We’re going to need to submit insolvency. Once the property owner sues us for the remainder of the lease – we’re going to need to submit bankruptcy and I’m certain that’s the method it’s going to be throughout the state of Florida along with a lot of individuals.”.
Many of those at the Spinners rally were senior citizens. The exemption was Jennifer Cooley, a single mom of five that works at Ducks R Us, an additional sweepstakes cafe.
“I’m so worried since I don’t wish to shed my job and go back on welfare,” Cooley pointed out. “Finding a job is much, few, and in between in Spring Hill.”.
Senior citizens right here feel like they are being slighted.
“The ones who can’t bowl … can not golf … they require something to do,” claimed Teresa Stoll. “We’re not children. We ought to have the ability to make our own decisions.”.
Angie Toporek concurs. The 81 year-old was holding a sign that said ‘allow the senior citizens enjoy!’.
“We shed our family members. I lost my spouse,” she pointed out. “We had a woman that shed her child and a hubby in a year and a fifty percent. If it wouldn’t have been for the game room, that would certainly’ve been it …”.

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Gambling Chair Pushes Legislation That Intends On Banning Internet Sweepstakes Cafes

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Over the arguments of Internet cafes operators, the American Myriad and even a priest, a Florida Senate panel unanimously passed legislation Monday to prohibit online slot-machine games, grownup galleries and gas station slot-

State Sponsored Video lottery Terminals Expected To Step in Right Behind Sweepstakes Cafes

Senate Gambling Chair Garrett Richter, R-Naples, said the Legislature was not attempting to close down legit businesses like Chuck E. Cheese or Dave and Busters, which award discount coupons and prizes. Yet Internet cafes were unlawful, he said, because all gambling in Florida should be accredited by the condition.

“Gambling and gaming is unlawful in Florida unless it’s legal,” Richter stated. And “Internet cafes are illegal.”.

Both the House and Senate have actually hurried to outlaw Internet cafes after last week’s statement of a state-federal probing in to Allied Veterans of the World, an Internet cafe business that provided only 2 percent of its virtually $300 million in payouts to veterans’ teams, regardless of billing itself as a charity. A House panel passed a ban Friday and a complete flooring vote is expected today.

Allied Veterans and others said their online slots and video poker machines were really a kind of “sweepstakes,” like scratch-off tickets and bottle caps that honor prizes.

Sen. John Thrasher, R-St. Augustine, sponsor of SB 1030, informed his associates that they can “not stand by an additional year” to take care of these uncontrolled gambling centers. The House voted last year to prohibit Internet cafes, yet the Senate wished to regulate them. In the long run, nothing was done.

Over the past 4 years, Allied Veterans offered more than $1.3 million to statewide and legal prospects and committees regulated by effective lawmakers who could possibly influence gambling legislation. The company also spent $1.2 million on influence peddlers last year.

Investigators billed 57 individuals associated with the business last week. Additionally, Lt. Gov. Jennifer Carroll surrendered after being examined about job her consulting company provided for Allied in 2009-10, when she joined the Florida House. Carroll has actually not been accuseded of any type of crime.

Unlike last week’s House committee conference, where there was minimal opposition to the bill, Monday’s hearing highlighted representatives of maquinitas, basically corner stores or gasoline station with slots that are well-liked in South Florida, in addition to adult arcades and Internet cafe operators.

“It’s visiting place a large pain on what we do as an organization,” said Michael McDaniel, united state director for American Legion of Florida, who stated his team counts on small numbers of video slots or poker machines for earnings.

An Oakland Park priest, Father Bob Caudill, stated his soup cooking area Saints Catholic Mission increased its budget by 30 percent when he installed video coin-operated machine and bingo games. And Internet cafe owners objected that the business employs an approximated 13,000 to 16,000 individuals.

Thrasher, after the conference, said the bill experiences another committee hearing. Yet he was unsympathetic to critics, though he claimed bingo would certainly not be outlawed.

“If it’s a slot machine that’s wired up under this new modern technology to make it appear like a sweepstakes game, however it’s actually a gambling game, that’s illegal,” he claimed.

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Florida Says No To Internet Sweepstakes Ban

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Internet cafes were supposed to be the low-hanging fruit of Florida’s initiatives to check gambling, yet these gaming

Red Stone Ln. Internet Cafe

focuses remain to thrive in a state that can not figure out what to do with them.

A straight-out ban appears out of the question. The Florida House of Representatives passed legislation this year to do simply that, however the bill passed away in the Florida Senate, where many lawmakers favored some type of regulation as opposed to a ban.

It’s tough to justify that these cafes ought to be banned on moral grounds, since Florida currently runs a $ 4 billion lottery, and enables tribal-run casinos and parimutuel gambling.

Still, Florida’s Republican-led Legislature discovers the regulation of gambling a hard medicine to ingest due to the fact that it suggests a tacit nod of approval. It’s ironic, actually, provided that the celebration’s steady worths are rooted in personal responsibility, complimentary enterprise and obtaining federal government out of the method of business.

However rather than resolve the sobbing need for requirements, Florida Senate President Don Gaetz lately pulled a Washington two-step and appointed a committee to examine the issue, kicking the may down the road, as they claim.

The committee’s head, Sen. Garrett Richter, a Naples Republican, claims his panel will examine destination casinos, tribal casinos, horse and pet tracks, parimutuels and Internet cafes– and suggest an extensive policy that considers their financial influence. But below’s the rub: the study will take 2 years.

The substantial review means that as Internet cafes remain to proliferate, the activity of managing them will certainly remain to fall to Florida’s 67 regions and 410 towns, a position already leading to an awkward and inappropriate collection of regional laws.

The city of Fort Lauderdale last month took matters into its own hands by approving an ordinance that requires a $ 500 license application fee, prohibits liquor sales, restricts running hours and the number of machines, and limits the place of cafes to particular business and industrial zones.

A week earlier, the Palm Beach County Commission went down a ban it had actually enforced on new cafes, claiming the obligation of controling these sites rests with the state, not specific regions. “I don’t believe it’s an excellent usage of staff time to going managing these Internet cafes,” said Commission Chairman Steven Abrams.

At the same time, also the market acknowledges that regulation is needed.

“We concur that the electronic sweepstakes technology has outpaced current law,” stated Sarah Bascom, spokeswoman for the Coalition of Florida’s Internet Cafes, “and that adjustments must be made to the law in order that bad drivers could be shut down and police force and regional federal governments may have the assessing stick they have to differentiate in between the law following facilities and the suspicious ones.”.

A detailed policy is a good point. So is an understanding of gambling’s economic influence. But by sitting on its hands for two years and allowing the unfettered proliferation of Internet cafes, the Florida Senate is shirking its low-hanging duty and leaving customers speculating whose thumb is on the table.

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Tampa City Council Moves To Form Regulation On Internet Sweepstakes

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A six-month halt on new Internet sweepstakes cafes inside Tampa city limitations won preliminary permission Thursday from the City Council.

Officially known as a temporary abatement, the moratorium is meant to give the city time to pass its personal ruling moderating the cafes. Those businesses enable customers to participate in sweepstakes contests. But instead of obtaining scratch-off tickets to find out their payouts, they make use of computers that often mimic the spinning reels of a slot machine.

Photobucket

If passed in a second vote on Oct. 18, the six-month abatement will not impact Tampa’s existing Internet cafes. The city has four that are open, with a fifth under construction, as reported by company tax records.

“If you’re operating today, and you met code at the time you were operating, this would not impact you,” senior assistant city attorney Julia Mandell informed the council. Also exempt would certainly be the Seminole Hard Rock Casino, Tampa Bay Downs, the Tampa Greyhound Track, licensed bingo games and galleries appropriately run under state law.

Council member Yvonne Yolie Capin raised the concept of managing cafes in March. On Sept. 20, the council voted to examine passing such a statute.

As a model, the city is anticipated to aim to the city of Jacksonville, which restricts the number of permits it will definitely provide for Internet cafes, bases its license costs on the number of machines in the cafes, demands safety cameras and guards, and bans liquor and minors from the cafes.

Tampa council members likewise have actually talked about requiring Internet cafes to have a minimum size and a minimum number of machines. Capin has stated she wants to prevent an expansion of sweepstakes cafes where coffee shops set up a machine or two in a rear area.

The council is set to review its choices Nov. 29.

Up until now, city representatives are taking a different path than did Hillsborough County.

In December, county commissioners voted to prohibit “simulated gambling devices.” Seminole County, Orange County, and the metros of Winter Garden and Longwood have actually followed comparable bans.

Less than 2 weeks later, four sweepstakes providers took legal action against the county in federal court. The suit, which is pending, claims Hillsborough’s ban violates the cafes’ First Amendment civil liberties of free speech, unlawfully interferes with commerce and denies them of equal security and due process of law.

The regulation developing Tampa’s short-term abatement notes that state law does not plainly specify whether substitute gambling devices are, in fact, slot machines regulated by the state.

Council Chairman Charlie Miranda voted yes Thursday, however stated he would vote no next month unless the Florida Department of Business and Professional Regulation is delivered in to the conversation.

“We’re getting into an area that’s really state-driven,” he pointed out.

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