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Friday, Mar 07 2014 12:07 PM

Court: Internet cafe gaming activity can be blocked

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    By Casey Christie / The Californian

    Kern County Deputy District Attorney Greg Pulskamp talks to the local media Friday afternoon about a court ruling Friday that sweepstake cafes, also referred to as Internet cafes, may be ordered to stop all gaming activity. District Attorney Lisa Green, right, spoke and then introduced Pulskamp in the DA's office.

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BY THEO DOUGLAS Californian staff writer tdouglas@bakersfield.com

This could be game over for Internet cafes in Bakersfield.

A state appellate court ruled Friday that sweepstakes cafes -- also known as Internet cafes -- offer "unlawful slot machine"- style gambling.

The court's ruling affirms "sweepstakes cafes may be ordered to cease all gaming activity," the Kern County District Attorney's office said at a Friday press conference.

"We have a lot of work to do. We look forward to ridding our county of this illegal activity," said District Attorney Lisa Green, adding this court decision -- pertaining to cafes that sell Internet time -- is the first of two on the issue.

Deputy District Attorney Greg Pulskamp called the decision by the Fifth District Court of Appeal in Fresno a pioneering legal opinion forged in the Central Valley for use by courts statewide.

"The Central Valley as a whole seems to be a hot spot" for Internet cafes, Pulskamp said in an interview. "A lot of this type of gambling focuses after, quite frankly, lower socioeconomic classes, and the Central Valley has a lot of that."

Neither he nor any other law enforcement official would discuss exactly when or how cafes would be closed.

ANOTHER RULING EXPECTED

The Kern County District Attorney's office expects a second appellate court ruling later this year on a case involving cafes selling prepaid phone cards, though Green and other law enforcement officials are confident they will prevail.

Los Angeles attorney John H. Weston represented appellants Kirnpal Grewal of A to Z Cafe and Phillip Walker of OZ Internet Cafe and Hub.

Weston said he was disappointed by the opinion and felt the court erred in its interpretation of a 1997 Third District Court of Appeal ruling that he said demonstrates Internet cafes do not offer slot machine-style gambling.

He and his clients are still reviewing Friday's opinion but Weston said there is a good chance they will appeal it to the California Supreme Court

Assemblyman Rudy Salas, D-Bakersfield, attended the press conference and said his own Assembly Bill 1439 on Internet cafes should "make it crystal clear, black and white this is an illegal gambling activity not authorized in the state of California."

AB 1439, which continues making its way through committee, would add "sweepstakes" to the list of unfair business practices prohibited under state law.

INTERNET CAFES STILL OPEN

Cafe owners disagree with that classification.

At least 15 Internet cafes are currently open in Kern County, Green said, with three to four in Ridgecrest and at least 13 in Bakersfield -- defying officials, who believe they are gambling houses that attract a criminal element.

Periodic arrests might confirm that.

On Oct. 22, police arrested a felon allegedly in possession of a loaded, sawed-off shotgun at the south Bakersfield shopping center that houses iSweeps and iNet Internet cafes.

On Wednesday, police responded to reports of a fight at Fun Zone Internet Cafe in east Bakersfield and arrested four people on suspicion of burglary and drug charges.

Ward 7 Councilman Russell Johnson, whose ward is home to iSweeps, expressed jubilation at the court opinion.

At one time last year, iSweeps had the most calls for police service of any cafe.

"I think there's no doubt that they prey on the folks in our community who have the least," the councilman said. "When you look at where they've been popping up in town, they're in those areas where folks should not be gambling because they need that money to keep the lights on and put food on the table."

EARLY COURT WIN STALLED

The District Attorney's office initially prevailed in Kern County Superior Court, getting preliminary injunctions against six cafe owners a few years ago -- but five appealed in late 2012.

Cafe owners argued their sweepstakes were legal entertainment like the McDonald's restaurants' Monopoly game, tying the matter up in Fifth District court.

In its opinion, the court cited the Sacramento decision, on a case involving juke boxes and pinball machines -- and found, Weston said, Internet cafes don't offer games of chance because their outcome is preset by computer program.

"What the (Sacramento) court ... held was the result has to be generated by the machine. And if it's not generated, if it doesn't do that, it's not a slot machine," Weston said.

The Fresno appellate court disagreed, referencing existing state penal code on slots and saying Internet cafes offer games of chance -- like slots -- because patrons can't predict the outcome.

"Even if the sequence of entries has been electronically frontloaded ... patrons win cash prizes based upon 'hazard or chance or of other outcome of operation unpredictable by [the patron],'" the court found. "Therefore, the chance element is satisfied."

Bakersfield City Attorney Ginny Gennaro said the Fresno court made the right call.

"I think the court did a very good job of saying, 'You look at chance from the user's perspective,'" she said, calling the ruling well-written. "I'm thrilled for the D.A.'s office, thrilled for the community, and I hope we can keep the momentum moving forward."

NEXT STEPS FOR ENFORCERS

The District Attorney's office has declined to prosecute more cafe owners or shut them down pending the arrival of Friday's court decision.

While city officials have waited, they've sent letters to cafe owners informing them that "Las Vegas-style electronic slot machines" are prohibited under penal code and to the cafes' landlords, informing them that Internet cafes "may be illegal" under California law, and are believed to "attract a criminal element."

Law enforcement officials are now armed with two legal victories -- their original civil case in Kern County Superior Court and now the appellate win.

It remains unclear how they will proceed, however, pending a meeting of various agencies sometime this month.

The meeting will likely include members of the District Attorney's and City Attorney's offices, the Bakersfield Police Department and the Kern County Sheriff's Office.

Details on what might be discussed also are unclear, as is the question of strategy -- whether law enforcement might raid Internet cafes or continue its earlier practice of seeking preliminary injunctions against them in court.

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