Palm Coast Imposes 6-Month Moratorium on Gambling Halls Proliferating as “Internet Cafes”

There are seven so-called “Internet Cafés” in Palm Coast, according to the city administration, and four such cafés that are about to open: they’ve applied for occupancy permits. (See a map of their locations.) On Tuesday, the council, in a 3-2 vote, imposed a six-month moratorium on new such establishments, but allowed the pending four to go through. The city has six months to determine whether and how those businesses will be regulated. In November, Flagler Beach denied the local Disabled Veterans of America chapter an exception that would have allowed the chapter to open a pseudo-gambling hall in its facilities, which are located in a residential area.

The hurried move by Palm Coast is the result of a sudden upsurge in concern on the council over the proliferation of those establishments, along with reports, none based on local data, that the establishments are breeding crime or corrupting morals.

“I’ve asked the sheriff’s department four times for any reports of any incidents,” Palm Coast Mayor Jon Netts said. Still no results. That’s possibly because there aren’t any: A year’s worth of police reports reveals scant evidence of crime associated with the gambling halls in Palm Coast.

Randy Cummings, the sales and marketing director at Lucky Day Sweepstakes in the Winn Dixie shopping center on State Road 100, says the pharmacy at Winn Dixie or other stores in the shopping centers have been robbed. His, though stacked with enough cash to pay winnings, hasn’t in the three years that it’s been at the shopping center. As for his own customers perhaps triggering crime, he said wryly: “If it’s a 70-year-old robbing Winn Dixie, it might be ours.”

He’s right: a look inside quickly reveals that Medicare eligibility might as well be a requirement to sit in front of the slot-machine-like spinners and clickers. The clientele has more in common with nursing homes than bars.

Charlie Ericksen, 68, a frequent presence at council meetings and a candidate for mayor, made the point to the council: “Just for the heck of it I stopped by about four of the existing establishments just to see what type of person was inside,” he said. He did so last week, after council members raised questions about the businesses, leading to Tuesday’s proposed moratorium. “Interestingly enough I found myself on many occasions being the youngest person in there, sitting down at one of the machines, and I did talk to some of the individuals. They were there just for the enjoyment of sitting in front of the machine, watching objects roll past them, and perhaps win something. But I can tell you that there’s many Palm Coast residents over the age of 60 that are present customers of these locations. And while I can’t condone long-term gambling, I know myself and at least one of the five of you sitting up there doesn’t mind getting on a plane every once in a while and going some place and spending some money. But I would just suggest we keep an open mind about what they are. I’d even suggest you visit one or two and get a good look-see for yourself.”

He was referring to Mary DiStefano, who on Tuesday defended a limited moratorium on the cafés—and who spoke of at least one—Lucky Day Sweepstakes, as it turned out—as a family business like any other, with a long list of community giving and involvement.

Lucky Day’s owner, Michael Brown, was in the audience, ready to speak if need be. He didn’t need to: he was all in favor of the moratorium the city passed, since it essentially amounts to an indirect city subsidy of his business: “I welcomed it, to tell you the truth,” he said after the meeting. From a business perspective, he said, “there is a saturation factor” when too many businesses of the same type jump in. The moratorium will keep new businesses from bleeding customers away from his. Lucky day indeed.

Brown’s main point, however, was about the nature of his business. He refers to Lucky Day Sweepstakes as a family business, and to himself as a family man who’s lived in Palm Coast five years (in the P section, he specifies), who sends his children to Rymfire Elementary, who supports numerous local businesses through Lucky Day’s daily catering of free food to patrons who buy at least a $10 phone card to use at the place (essentially, the betting mechanism used there), and who has donated from hundreds to thousands of dollars to local groups, including, he says, the Flagler Palm Coast High School’s girls’ basketball team, girls’ soccer team, boys’ football team, the Special Olympics, the local Police Athletic League, and so on. (It’s notable, too, that some organizations, such as Flagler County Rotary, have turned him down, not wanting to be associated with that type of business.)

Brown says the demographics of his business are such that linking it to crime is a stretch, though he and Cummings, the marketing director, also specify that their place is not an Internet café: the machines are self-contained chance games. About 65 percent of the patrons at Lucky Day are women. There are lousy joints, Brown says, but in the same sense as there may be lousy joints in any sector. “The bad places that you end up hearing about,” he says, “they’re the ones that end up casting a shadow on ours.”

There are pronounced parallels between the way pain clinic operators strain to distance themselves from pill mills and “sweepstakes” operators strain to distance themselves from gambling halls, or disreputable “internet cafes.” Palm Coast recently passed a moratorium on pain clinics, too, in hopes of stemming the pill-mill surge.

Cummings, for his part, bristles at the suggestion that the business involves gambling, though word games played by the arcade and sweepstakes business are at least as dazzling as the games played on the business’ slot machines.

The term “internet café” is a misnomer for a couple of reasons: Internet cafés in much of the world are coffee shops that give patrons easy access to the Internet—to browse, flirt, socialize or email. That’s not what internet cafés are in this case. The cafés are, in fact, gambling halls: people go in, spend money, bet money, and hope to win money, abiding by every definition of gambling except those put forth by the “gaming” industry that has developed a new set of euphemisms to shade gambling behind other names, the way garbage is called “waste management” and politicians call themselves “elected officials.” That industry, with swarm of lobbyists in Tallahassee, has also managed to carve an odd exception to the state’s definition of “gambling.”

Palm Coast City Attorney William Reischmann summed up the word game before the council: “You have access to types of poker and what we would think of as casino-like games, but you can only have that type of products if you use the cards that you buy at their establishment. And of course depending upon how that turns out—they say it’s pre-programmed, there’s no skill or chance involved, just a matter of statistics, depending on how long you play, and whether you push the buttons or pull the levers at the right time, you can get rewards. Call that what you want, the state of Florida has said that that falls within one of the exceptions under Chapter 849 that makes it not gambling. Now, I’m sure that everyone in this room has an opinion on whether or not that makes sense or not, but the fact is that the state attorneys are not out there prosecuting these establishments as violating the gambling laws in the state of Florida, and the Supreme Court has ruled that enforcement is based at this point in time on law enforcement, so we can direct the sheriff’s office to do whatever we wanted to direct them to do, but state attorneys are not going to prosecute, which is why we’re having the discussion today.”

The question for Palm Coast was whether the rationale behind the moratorium, and the allegations outlined in the city’s resolution, which also describes the places “essentially as gambling establishments,” do apply in Palm Coast. The resolution states that the gambling joints “can greatly negatively impact the public health, safety and welfare,” and that elsewhere in Florida they “have been subject to various crimes and exhibit other harmful secondary impacts on the surrounding properties.” The resolution doesn’t go so far as to claim that those issues exist in Palm Coast. It qualifies every statement. If anything, crime has fallen significantly in the past year, coinciding with the gambling halls’ influx. That’s not to say that the gambling halls have helped crime fall; but clearly, their influx has not led to a spike in crime.

“My question is, do we agree with staff’s finding in this agenda item?” Council member Frank Meeker said. “They either do have these problems discussed in the ‘wheareas’ sections, or they don’t. If they don’t have those problems, then why is it in there? And take it out. But if I read this and believe what I read in here I can’t in good conscience allow these kinds of things to continue to proliferate in Palm Coast and cause a danger or an increase in criminal activity, or the secondary impacts located with those. I just can’t. So what’s the truth on this deal?”

There was no ready answer.

To council member Bill Lewis, the gambling joints are coming here because they’re being chased from elsewhere. “They’re coming and they’re going to keep coming, and if we don’t do something serious and definite, they’re going to keep coming,” he said.

“Right now we’re kind of shooting in the dark,” council member Holsey Moorman said, “and we’re not really sure what it is we’re afraid of, what it’s not, we don’t have a report from the sheriff, what the crime activity has been around these Internet cafés or whatever. So to do the moratorium in 180 days or less and we determine it’s not an issue, then it goes away and goes back to business as usual, but at least we can slow down the process and give our staff and attorney an opportunity to take a look at it.”

Netts, DiStefano and Moorman voted for the six-month moratorium. Lewis and Meeker voted against.