Local News

Tuesday, Jul 24 2012 09:35 PM

D.A. cracks down on sweepstakes cafes

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    By Henry A. Barrios / The Californian

    Phillip Walker, operator of Oz Internet Cafe & Hub, brings up one of the games that people play at the cafe.

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    By Henry A. Barrios / The Californian

    Phillip Walker, operator of Oz Internet Cafe & Hub, demonstrates how one might use the Internet in the cafe. One is the Entertaining Reveal site that has Las Vegas-style games, but Walker says other sites including business and education sites are also available. Walker says, "We will follow the letter of the law" concerning casino-like video games.

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BY STEVEN MAYER Californian staff writer smayer@bakersfield.com

The colorful games include Lucky 7, Caribbean Keno and Wheel Deal, but they're not designed for licensed casinos and card rooms.

Rather, the games are played in lonely store fronts and strip malls throughout Bakersfield -- and across America -- at places called Internet sweepstakes cafes.

Related Info

Promotional agreement

Excerpts from a "computer time purchase agreement," provided by Oz Internet Cafe and Hub:

"I understand that I am purchasing computer time to be used at this location. I also realize that I can request to participate in the promotional game for free. I understand that the promotional games are a tool with the sole purpose to increase the sale of computer time at ..."

"I understand I am not gambling. I am playing a promotional game in which all winners are predetermined. The games have no effect on the outcome of the prizes won. I also understand that the games are an entertaining way to reveal my prizes and I could have them instantly revealed and would have the same result."

But the businesses that profit from them may be in a world of trouble locally.

The Kern County District Attorney's office said Tuesday it is going after local sweepstakes cafes in an effort to shut down the games, which it considers illegal gaming.

"At this date, we are on track to eliminate gambling at nine different locations," Kern County District Attorney Lisa Green said in a release.

"We intend to continue our aggressive pursuit of these cases, including any 'sweepstakes cafes' that continue to operate in Kern County, regardless of whether they claim to sell Internet time or prepaid phone card time."

The cafes typically sell internet time or prepaid phone card time. In exchange, customers get points to play the casino-style games and potentially win money.

The nine targeted so far include seven in Bakersfield, one in Delano and one in Lamont. But it's clear there are several more cafes that prosecutors haven't gotten to -- as many as 20 more, according to one cafe operator.

That operator says his business does not promote or allow gambling, and that authorities' actions could do damage to a legitimate local small business.

Gregory Pulskamp, the deputy district attorney prosecuting the cases in civil court, said his goal is not to close the businesses, but only to stop the "sweepstakes" component. Although for most, he said, that component is all they appear to do.

A visit Tuesday by a reporter to A2Z Internet Cafe at 3015 F St. seemed to bear that out. There was no sign of food service or any sort of coffee shop atmosphere, just tables lining the walls with approximately 30 computer terminals available to customers. The woman at the counter declined to comment for this story.

Earlier this month, a visit to Hot Spot Cyber Center on Oak Street found a similar operation, about 30 terminals with some 15 customers playing video slots, video dice and other games.

A single TV was on with no one watching it as the sound of electronic beeps and bleeps filled the room.

The operator at that location also declined to comment Tuesday, although Hot Spot is not on the D.A.'s list of targeted locations.

"The businesses claim they are doing exactly what Albertsons and McDonald's does," Pulskamp said, using sweepstakes as a sales promotion.

"But that's a fallacy," he said. "Their primary business is the gambling."

Authorities believe some cafes can generate thousands of dollars in revenue daily.

On Monday, Kern County Superior Court Judge William D. Palmer ordered four local cafes to stop operating any sweepstakes feature of their businesses while the cases are pending trial. The orders were issued in a series of civil lawsuits after the D.A.'s office filed requests for preliminary injunctions on the grounds that the sweepstakes violated California's gambling laws.

Phillip Walker, operator of Oz Internet Cafe and Hub at Golden State Mall, said Tuesday the business is multi-faceted, providing business consulting services, fax services, web design and a host of other products.

"We are not a casino," he said.

The sweepstakes are used, he said, to promote products and services, just as sweepstakes are used by well-known companies and corporations.

Indeed, Walker's cafe, which boasts overstuffed chairs, music and a relaxed atmosphere, included walk-in customers using copy services. People without Internet skills and access -- including seniors and veterans -- use the cafe regularly, he said.

"Husbands bring their wives here for a few minutes of quiet relaxation," he said. "We don't allow riffraff."

But he acknowledged that not every cafe is run like his.

Pulskamp said the local cafes originally came to the attention of law enforcement when complaints started rolling in, mostly from neighboring business. Increases in vandalism, drug activity and even prostitution were noted, he said.

The defendants each face up to $2,500 in penalties for every violation, or potentially hundreds of thousands of dollars in total.

The bigger problem, he said, are the national companies that develop and distribute the game software and hardware. They are recruiting the small-time operators, like those in Bakersfield and thousands of others nationwide.

The local D.A's office is consulting with the state attorney general's office, Pulskamp said, in hopes of going after the big boys. In the meantime, a message is being sent to local operators that running the cafes is not a good bet.

Jeanne Malm, owner of The Village Salon on Oak Street, said her employees began noticing problems after Hot Spot opened nearby.

"The environment around here has gotten pretty rough," Malm said.

Angelina Ripepi, one of the stylists, said she recently saw a verbal fight spill out of the cafe's back door, a woman screaming at a man who works there.

"In the evening, they bring the girls by," she said. "I don't think it's good for this area."

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