What Is the Future of Internet Sweepstakes Cafes and Online Poker in Florida?

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As previously discussed on this blog, North Carolina and Pennsylvania are at odds when it comes to the legality of Internet sweepstakes cafés.  On Friday, the State of Florida’s made its stance on the matter clear.  Coming on the heels of a scandal involving Internet sweepstakes cafés, which resulted in the Florida Lieutenant Governor’s resignation, the Florida legislature passed a bill that not only outlaws Internet sweepstakes cafés, but could also cast a wider net than the legislature intended.

223760_2292Internet Sweepstakes Cafés

Internet sweepstakes cafés in Florida operate within a legal gray area by selling customers Internet time or pre-paid phone cards, which are then used to play the casino-style games found on the cafés’ computers.   The games operate much like a slot machine or roulette wheel, with the winnings being credited to the applicable customers’ phone cards.  Once the customer is finished playing, he/she returns the phone card to the café proprietor and receives cash for any remaining balance left on the card.  By offering its customers pre-paid phone cards, the operators of the cafés claim to have found a loophole in the state’s gambling law.

Internet Sweepstakes Bill

With a sense of urgency stemming from the recent Internet sweepstakes café scandal, the Florida legislature quickly passed a bill in an attempt to close the legal loophole used by these Internet sweepstakes cafés.  The bill explicitly states that it is illegal for an electronic device or system that accepts currency or coins, or account numbers and codes, to award players extra credits, prizes or anything else of value.   Electronic gaming devices located in casinos, racetracks or tribal reservations are exempt from the bill.

Effect on Online Poker

The broad language of the bill does not differentiate between electronic games based on chance from those based on skill and, therefore, could have far reaching effects that were not intended by the legislature.  A strict reading of the bill would make online poker and other monetary games played over the Internet, such as fantasy sports, illegal in the State of Florida.  Online poker and other Internet-based monetary games may not have been a target of the bill, but in order for these games to be legalized and regulated within the state, the language of the bill may have to be amended or repealed.

Florida’s treatment of Internet sweepstakes cafés and online poker is a significant topic for all gaming attorneys and those interested in Internet sweepstakes cafés, poker and gambling in general.

If you are interested in learning more about this topic or pursuing an Internet sweepstakes café venture or online poker venture in Florida, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

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