Thrasher calls for shutting down Internet cafes

State senator responds in wake of gambling scandal

Published On: Mar 13 2013 01:43:27 PM EDT   Updated On: Mar 13 2013 07:10:00 PM EDT
Internet cafe
TALLAHASSEE, Fla. -

An influential senator who has sought to place a moratorium on new Internet cafes said Wednesday that criminal allegations of racketeering and other wrongdoing in the industry should spur lawmakers to close the storefront businesses.

"My goal would be to get rid of them,'' said Sen. John Thrasher, a St. Augustine Republican who is chairman of the powerful Rules Committee.

Thrasher made the comments shortly after Lt. Gov. Jennifer Carroll resigned because of past consulting work she did for Allied Veterans of the World, an organization that is at the center of an investigation that became public Tuesday and led to the search of 49 establishments

The investigation includes allegations of illegal gambling, money laundering and misrepresentation by Allied Veterans, which held itself out as a charity but, authorities contend, was used to enrich other people.

John Thrasher Sen. Garrett Richter, a Naples Republican who is chairman of the Senate Gaming Committee, said he plans to hold a meeting Monday to take up a Thrasher bill (SB 1030) that called for the moratorium. Richter said he expects discussion during the meeting about possibly going beyond a moratorium.

"Well, certainly I think we have to have the discussion," Richter said. "We don't want illegal businesses thriving in the state of Florida."

Internet cafes have been a controversial issue in the Legislature, as hundreds of the businesses have popped up across the state in recent years. Critics have long contended they illegally operate electronic games that are akin to slot machines, but the industry has said they are legal sweepstakes games.

"I am going to suggest that we move a little faster," Thrasher speaking about legislation already proposed to abolish internet cafes. "Yeah, and maybe a ban. Now I believe that evidence has come out that these things are exactly what we thought they were. They've been corrupted, there's a problem with them. Counties and cities are having problems, law enforcement people are having problems."

A 130-page search warrant application filed Monday in federal court in Oklahoma flatly rejects arguments that Internet cafes are not gambling operations --- repeatedly referring to them as "Internet casinos."

"(The games) do not constitute a drawing by chance or a game promotion under Florida law,'' IRS Special Agent Michael Favors said in a sworn statement seeking a warrant to search an Oklahoma company, International Internet Technologies, that is a major player in the industry. "As a result, there is probable cause to believe that Allied Veterans and others were involved in conducting, financing, managing, directing and owning illegal gambling businesses in Florida involving slot machines that earned, after deducting prize pay-outs, over $290 million from 2007 to present."

Thrasher said he was "terribly saddened" by Carroll's resignation and called her a "dear friend." He filed the bill to place a moratorium on new Internet cafes last month, though the measure has not been heard in a committee.

The senator said he filed the moratorium bill as a way to "push the pause button." But he said he doesn?t think there is a need for the cafes and will go after the industry "as hard as I can --- as hard as the (Senate) president will let me."

Thrasher's comments Wednesday were not welcomed news to the people who run and work at Smitty's in Mandarin. Smitty's has an internet cafe and she told Channel 4 that they run a totally legal operation.

"I'm not really surprised by it," said Jen Andrin. "But I don't think they should, just because someone else did something wrong, doesn't mean the rest of us are doing something wrong."

Closing down the internet cafes associated with Allied Veterans is impacting more than the men who are allegedly behind the scheme. Channel 4 spoke with people who say the impact of shutting down the cafes are going to hurt a lot of veterans.

"It could affect all thirty some veterans out here," said Brett Bell. "They could end up back out on the streets."

Bell stays at the Allied Veterans Center on Acme Street in Jacksonville, a legitimate facility that helps homeless vets get back on their feet. Bell said if the center loses Allied Veterans Worldwide as a source of funding, it may shut down and he loses his place to live and his training to get job.

"Try to think positively and keep my options open, but we're hoping the funding will come through," said Bell.

The industry, particularly International Internet Technologies, has become a big-money political player in Florida, as it has fought past attempts to rein in the industry. Last year, International Internet Technologies, which licenses software to the cafes, spent $740,000 on lobbying the Legislature, according to a lobbyist-compensation report.

But the industry's lobbying muscle could quickly vanish, as International Internet Technologies' lobbying team terminated its representation after the announcement Tuesday of the arrests and law-enforcement searches of Internet cafes.

Sarah Bascom, who runs a prominent public-relations business in Tallahassee, served as a spokeswoman for a group called the Coalition of Florida's Internet Cafes, which included International Internet Technologies. She said she quickly terminated representation because of "misrepresentation" by International Internet Technologies.

"We had no knowledge of any of this until yesterday when the media reports started coming out, and we terminated our representation of them immediately after," Bascom said in email.