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Don’t Ban Internet Cafés. Regulate Them.

| January 23, 2012

Bring them in from the wild. (Skil Fibber)

They’re sordid little places, those misnomers known as Internet cafés. They specialize neither in Internet connections nor in coffee, but in low-stakes gambling, what their proponents like to call “game promotion” or “sweepstakes.” They’ve been filling empty storefronts in strip malls across Florida, like an invasive species taking advantage of retail’s wilts. There’s anywhere from 450 to 1,000 of them in the state.

Pierre Tristam FlaglerLive editor

Pierre Tristam

The Live Column

They can be sordid inside, too: quiet, neon-lit places catering mostly to older people with dollars or time to spare, or loneliness to foil. The only sound is the gurgling of slot machines rigged as games of chance. There’s not even the sound of metal kissing metal when slots line up, because coins aren’t the currency of choice. Winnings are “cashed in” at the front desk so as to maintain the elaborate lie that patrons aren’t really gambling but using “phone cards” or other bogus credit devices. In Palm Coast, where there’s a dozen of these things—about six times more of them than actual coffee shops—they’re rarely busy, and often empty. But those gambling halls have been getting an awful lot of attention from local and state politicians. A bill advancing in the Legislature would ban them outright. Gov. Rick Scott supports the ban, saying he doesn’t want “our budget to be dependent on gaming.”

Scott is right: the budget shouldn’t depend on gambling. But it does. The state raked in almost $4 billion in lottery ticket sales in 2010, an industry it monopolizes by law. Florida transferred less than a third of the money to the education budget, the ostensible justification for the lottery. Gambling’s justifications as a revenue source for worthier causes can be overstated. The American Gaming Association itself concedes that “the legalization of online poker would generate $2 billion in tax revenue, primarily at the state level, every year.” That’s a projection of combined tax revenue across 50 states, a pittance when compared to lottery sales in Florida alone. Still, the state shouldn’t be swinging from a lottery’s levers with one hand while wagging its finger at gambling with the other.

Internet cafés may be a pest, and their proponents make laughable arguments when they claim they’re not about gambling. Winnings depend entirely on chance. There’s zero skill involved aside from the relatively primitive motor kind required to press a button. But Internet cafés shouldn’t be banned. It’s never a good idea when the state imposes prohibitions on moralistic grounds. It needlessly interferes with business. It paternalistically interferes with people’s right to enjoy themselves as they choose. The low-stakes gambling that takes place in internet cafés isn’t attracting crime. It’s attracting the Medicare generation, and the occasional sheriff with a Comstock complex. Maybe there’s a better way to waste money. But it’s not government’s job to define it, especially when those businesses are creating jobs.

The worst gambling crime of the century took place a few years ago in the stock market, the nation’s biggest virtual and physical collection of gambling halls, when fund managers and stock brokers used other people’s money to bet on the housing bubble. A few cashed in colossal sums. Most lost, and took the economy down with them. There hasn’t been a single conviction out of that catastrophe. And the gambling goes on, glorified by its practitioners and sanctified by the government through capital gains and dividend tax rates set absurdly lower than those for earned income. “It is unjust and in my opinion morally wrong,” President Eisenhower said in 1954, “to make a person with earned income pay considerably more in taxes than persons with unearned income from dividends.” That was back when the stock market hadn’t become America’s most ecumenical house of worship. When it comes to threatening the fabric of society, Internet cafés have nothing on Wall Street.

Government can and should regulate gambling. A bill in the Florida Legislature would do just that with Internet cafés, letting them go on but also letting local governments write rules for them and impose fees that could generate a little extra tax revenue, including potentially steep permitting fees and $100 per electronic device per year. No moral overlord. No nanny state. Just a reasonable compromise, with a touch of sin-tax surcharges that could help rein in the gambling joints’ proliferation.

Now if we could apply the same thinking to drugs and prostitution, we might get somewhere as a rational society.

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10 Responses for “Don’t Ban Internet Cafés. Regulate Them.”

  1. Ban them but bring actual casinos to FL and regulate them. Just this man’s opinion.

  2. roco says:

    Tax them for the city or county where ever they’re located.

  3. Kip Durocher says:

    “glow” scott will come to an agreement with the industry and they will $upp0rt him.

  4. Anonymous says:

    Riding a bicycle on Palm Coast roads is a gamble. Driving this AM in the fog, was a gamble. The pull tab, I got from the $1. vending machine at the VFW was a gamble. Buying a State of FL scratch off ticket at Publix, is a gamble. Getting residents to vote, in Palm Coast is a gamble. Going to the park in the “R” section is a gamble… Waking up each AM is a gamble for many. Getting a tattoo is a gamble for many. Let’s put some rules up, and the cafes will comply. Bringing in the “actual casinos” will bring in the actual big money people, and then beware..

  5. linda says:

    Pierre, would you feel the same if there was one around the corner from your home, in your own residential neighborhood? If they open a bar with strippers there as well, will you mind?

    Obeying laws that have been on the books for a long time is not a nanny state. Regulation of zoning is not a nanny state. Telling me what kind of lightbulb I must use IS a nanny state. Telling a real estate agent she can’t put an open house sign in her yard is a nanny state. We find that more objectionable than a seedy gambling parlor in this town.

    And we wonder why people are moving away?

    I would not object to these cafes if they were regulated out of residential areas, to an area where they would not be a blight on anything near it. I did not move to Palm Coast to live next door to a gambling parlor. It’s not a moral issue with me. I just don’t want to see them in my neighborhood, down the street from schools. They hurt property values. And the one down the street from me is packed. It is also where the drug deals go on nightly.

    Nobody is going to want to buy a house next to a gambling parlor. I think we can do a much better job of regulating them than we are now.

    Do we need the revenue? Yes. But not the kind the sort of business brings. I think it will be more costly to the city in the long run because it is not the sort of business we should be encouraging here.

    Sounds like maybe this might be a good topic for a townhall of some sort with local government. I don’t want to tell anyone how to live, only to express my opinion in regards to my situation.

    I’m sure people will have lots to say on this issue.

    • Pierre Tristam says:

      Linda, you won’t find these “cafes” in residential areas. They’re limited to commercial strips which, with or without these joints, are ugly as sin anyway. And I’ll take a stripper over a prelate any day no matter the neighborhood.

      • linda says:

        Pierre, the one I am referring to is at the new BP station on Palm Harbor Parkway. The zoning is commercial because of the gas station, but it smack in the middle of homes, no other business, just the gambling parlor and the gas station. Extra space was built on either side of the small convience store and one of these parlors moved in.

        This is also a short distance from Matanzas HS, which is neither here nor there, except I think we can set better examples of activities for our kids. It is also the site of drug deals.

        Somehow, I don’t think you’d want to raise that adorable son of your’s next to one of these. Doesn’t make a very good play area.

  6. palmcoaster says:

    Hi Linda I am all with you FOR the realtors, specially in this bad economy, being allowed to have their Open House signs only while the event is held, of course. Just do not forget to take them along when you go home. We need a bit more lag regulations regarding signs now at least because has become so hard to make a living for us all, middle class. Honestly the one Internet Cafe that I have seeing so far on my way to Home Depot I do not see an eyesore or nuisance on it, but rather busy….as busy as sometimes the lines to buy the Florida Lottery on our convenient stores or signature supermarkets. If these IC create jobs and they do not generate law enforcement calls over trouble, I do not see a reason to oppose them. I been many times to Gambling Heaven Las Vegas “but I am not a gambler at all”. Started going there for business conventions mainly and their other attractions that are not gambling, have impressed me very much. No muggers and we can walk for hours and look at those incredible resorts besides all the funny characters in the multitude, great gourmet restaurants. All funded by gamblers, the high roll ones, that casinos call them whales. I can’t afford and don’t care to gamble, but I am proud that we have Vegas. No other place like our Las Vegas, in the World.
    I think that having gambling places around, as long as properly regulated they create needed revenue and jobs. Vegas is always packed with many foreign tourist bringing in revenue and those spending whales. Then “VIva Las Vegas!”

  7. PJ says:

    I say tax them until the state allows real casino gambling.

    Take their money while you can.

    Wake up Palm Coast take their cash.

    Oh that’s right were talking about Palm coast city council. They only take money from businesses they can vote on contracts for………….

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