California Deems Internet 'Sweepstakes' Illegal But Alameda County Looks Sideways

There's no such thing as being a little bit pregnant, or so the saying goes.

But when Internet cafes rent time to play sweepstake games that offer prizes, this may be a form of online gambling that's only a little bit illegal.

What's up?

On Tuesday, Patch wrote about four local Internet cafes that offered sweepstake games. Alameda County officials ordered these cafes to "cease and desist operations" immediately. 

Patch noted that the Bureau of Gambling Control inside the state Department of Justice had issued an advisory in December stating that it "considers Internet cafés that offer these types of sweepstakes to be illegal gambling operations."

County code enforcement officer Tona Henninger wanted to make sure Patch understood that the cease-and-desist orders had nothing to do with the legality of sweepstakes.

Henninger said the orders were issued based on complaints of noise, late night gatherings and similar annoyances, which the county had dealt with under the nuisance provisions of its zoning ordinances.

Local authorities elsewhere have taken criminal action against Internet cafe sweepstake operations, including a recent raid in San Bernadino County that followed a four-month long state-local undercover investigation.

What is the law?

Patch asked the California Department of Justice (DOJ) for answers. Here is a lightly edited version of its explanation:

1. Why are the Internet cafes a problem? 

The Bureau of Gambling Control regularly receives requests from local agencies to assist them with Internet cafes.  They generally start receiving complaints from surrounding businesses and from their patrol officers that they are seeing huge increases in crime (drug use/sales, prostitution, violence, burglaries/car burglaries, and parolee/drug users hanging out in front of the neighboring businesses).  With virtually every one we have shut down, neighbors and business owners have thanked us, sometimes applauding and cheering as the Internet café was shut down. 

While the Internet café industry alleges they are just a 'sweepstakes' operation, or that they provide phone cards or sell Internet time, once you step into the location, the sights and sounds make you feel as though you are in Las Vegas.  
Also, when they apply for a business license or conditional use permit, they do not list themselves as an 'Internet café.' They state they are business centers or something similar.  The reality is, they rarely (if at all) do any 'business' types of activities such as faxing, copying, etc.  If they have any business equipment, it is generally non-operational or not used. 

2. If they're illegal, why isn't DOJ shutting them all down?
Due to cuts to DOJ and our now very limited resources and personnel, we are not capable of handling the hundreds of Internet cafes on our own. 
We regularly educate and assist local agencies on how to handle these.  By utilizing the local agencies, we can augment the small number of agents we have into a very large contingent of officers.  Also, by educating them, the local agency now knows how to handle any others that pop up and they make their jurisdiction 'unfriendly' to these businesses. 

3. Can locals use the Bureau of Gambling Control's December advisory at their discretion?
Yes. We have been leaving it up to the local jurisdiction on how they want to proceed. Some choose to go after them administratively, some choose criminal prosecution, and some do nothing at all (generally in fear of being sued). 
At this point, we do not have enough resources or personnel to close locations down in areas that do not want to address them. We have been inundated assisting local jurisdictions who have asked for our help and are working hard to keep up with the demand. 
Each local jurisdiction is responsible for the evidence seized in these cases.

4.  Have any of the cases have been adjudicated? 
Numerous jurisdictions (Sacramento police department, Sacramento County, Lodi, Manteca, Stockton, Modesto, Yuba City, Santa Rosa, Fairfield, Citrus Heights, Galt, etc.) have cases currently pending in court. The only conviction in California (other states have had convictions) is San Diego. 

5.  What are the future plans for these? 
The Bureau of Gambling Control will continue to work in conjunction with local agencies on addressing the issue of Internet Cafes, investigations, and prosecutions.