JACKSONVILLE, Fla. – They’re called adult arcades. Formerly known as internet cafés, these businesses are in storefronts in almost every neighborhood in Jacksonville.
Once banned by state law, the city of Jacksonville has issued permits for 94 of them. Hundreds more tried to open but never received permits.
Sheriff tells us that most in city are running legally
JACKSONVILLE, Fla. – Hundreds of internet cafés, also known as adult arcades, are operating in Jacksonville, and many remain open after having their permits revoked.
Over the past decade, we have reported on raids and arrests at the arcades. In most cases, the charges were dropped and the cafés remain open.
North Carolina has banned video poker for 12 years, but now fish game tables are the new trend. According to arcade operators, they’re following state law because the money a person can win is based on skill not luck. Officials say otherwise.
Authorities on Thursday raided a Randolph County arcade following a state investigation into video gambling in North Carolina.
State Bureau of Investigation agents entered the Asheboro business at about 2 p.m. with search warrants — marking the second crackdown in recent weeks at gaming parlors that are spreading across the state.
Outside the Lucky Day Skill Games & Fish Tables business on North Fayetteville Street, a law enforcement officer stood guard. A few afternoon customers tried to enter but were told, “They’re closed.”
Inside, police interviewed people and began reviewing various computer-based games and “fish tables.”
As of 3:00 p.m., the SBI had not announced arrests or specific charges.
The surprise law enforcement operations was the latest in an ongoing battle over whether video game arcades that feature “skill games” violate North Carolina’s strict gambling laws.
Other agencies involved included N.C. Alcohol Law Enforcement, U.S. Homeland Security, the Randolph County District Attorneys Office, Asheboro Police Department and the Randolph County Sheriff’s Office.
Sheriff’s offices and police statewide complain the arcades attract crime, due to their late-night hours and large amounts of cash on hand.
Thursday’s arrests are almost certain to draw legal scrutiny from the arcade owners and their lawyers. They contend the video games are games of skill, referencing a loophole in state law.
Across the state, sweepstakes-style games and multi-player tables called “Fish Games” have grown in popularity over the past year. The businesses are often open 24 hours, and often offer customers free food and accept as little as $1 to get started.
Earlier this year, the Charlotte Observer went inside fish game arcades, talked with several owners and an attorney for the arcade industry. They say allegations of illegal gambling happening inside are unfounded.
In several other states, fish games have been effectively shut down after forensic analysis showed the game’s outcome was based mostly on a person’s luck.
This debate over skill versus chance has historically been one for the courts in North Carolina to decide.
Some state lawmakers say they think North Carolina’s criminal penalties for gambling should be tougher.
State Sen. Andy Wells, a Republican from Hickory, says police officers in small towns where there are many arcades often find it difficult to put in a dent in operations.
“It’s kinda like counting the mushrooms in the rain. By the time you count ‘em 10 percent more have come up,” Wells told the Observer in August.
Authorities made nine arrests on Nov. 5 in Anson County, according to the SBI.
Gaming equipment, cash and documents were seized Wednesday during a multi-county raid in Clermont and Brown counties.
In the roughly six months since the Supreme Court struck down a federal ban on sports gambling, a handful of states have sprung to action to legalize the practice, from New Jersey to Mississippi.
In North Carolina, home to three major-league sports teams, the issue hasn’t gotten much attention lately. But experts say that in the coming months that could change, as they expect legalized sports betting to become a bigger part of the conversation locally.
Several internet cafes in St. Augustine have closed up shop.
While the reason behind all of the closures isn’t clear, the St. Augustine Police Department recently sent letters accusing the businesses of violating the law by having “gaming devices which pay off in money or other things of value.” The letters gave the businesses 48 hours to cease any illegal gambling.
ASHEBORO –State Alcohol Law Enforcement special agents led a raid on a business that was operating illegal gaming machines.
ALE confiscated about two dozen gaming machines from the Lucky Day Skill Games & Fish Tables, 1200 N. Fayetteville Street.
One of my favorite things to do at hometown festivals is sit down with family or friends and play a round or two of bingo. It’s a relatively inexpensive activity at most festivals and can provide hours of entertainment. What I tend to forget, as far as bingo goes, is its status as a gambling activity.
In North Carolina there are laws in place to prevent commercialized gambling through bingo. How do they do this? With bingo laws, yes that’s right, bingo laws.
Questions raised about how law enforcement freezes property during trial
The owners of a Michigan business were charged three years ago with running an illegal gambling operation. While the husband and wife who own the business have not been convicted of a crime, law enforcement officials have nevertheless frozen nearly all of their assets with the hope of eventually acquiring them through a legal process called asset forfeiture. Civil liberty groups say this can be a significant problem for people trying to mount a legal defense.
In this case, prosecutors have indicated they will not pursue forfeiture unless a conviction is secured. That makes this case different from most asset forfeiture cases in Michigan, where the government seeks to take ownership of property before or without a conviction. But this is an example of the damage that can be done to individuals while their court cases drag on for years.
The Michigan Gaming Control Board had received information going back to 2011 pointing to an increase in the number of internet cafes and similar businesses. These operations sell customers access to the internet for a limited time, which they can use to play games and win prizes or sweepstakes. The board and law enforcement agencies have investigated some of these businesses, suspecting that they give customers an opportunity to gamble illegally. State law defines gambling as games of chance played for money or other things of value, and only allows it in prescribed settings such as casinos, the state lottery, and some limited raffles and charity games.
Susan Hernandez-Zitka and Bruce Zitka were co-owners of three businesses in West Michigan that rented out computer equipment. They maintain that their Muskegon County companies – the Landing Strip, the Lucky Mouse and the Fast Lane – were not gambling operations but primarily computer rentals. They ran sweepstakes to promote the businesses, but entries were free of charge. Customers could take part in online games, including lotteries, video poker and slots, but the results were predetermined. In other words, they argue, their customers were not playing a game of chance.
In 2015, the Michigan Gaming Control Board launched an undercover investigation that also involved the Norton Shores Police Department. Initially, the Attorney General’s office turned the case over to the city of Norton Shores. After an undercover investigation, the city attorney filed a complaint in circuit court to shut the business down.
Susan Zitka then met with the police investigator and city prosecutor and showed them how the games worked, demonstrating that the results were predetermined. In a report, the local investigator wrote that he met with attorneys and noted: “I explained my interview with Susan Zitka and that the casino-style games appeared predetermined.” In early 2016, the city and the Zitkas entered an agreement that closed the case, provided the business continued operating without violating any gambling laws.
Relying on that agreement and the dismissal from the circuit court, the Zitka’s continued to operate the business as before. But shortly thereafter, the gaming board reopened the investigation through the Attorney General’s office and the Zitkas were eventually charged with conducting a gambling operation and using a computer to commit a crime. The businesses and home of the Zitkas were then raided in August of 2016, for which authorities had obtained a search warrant. According to Susan Zitka, their business, tax and personal banking accounts were all frozen and a forfeiture lien was placed on their home, which they challenged within 21 days.
The charges were bound from a district court in West Michigan to a circuit court near Lansing. The Ingham County Circuit Court dismissed the cases in April 2017, an act which the Attorney General’s office then appealed. The Zitkas also filed a motion for a return of the property, but this was stayed pending the appeal. In May 2018, the Michigan Court of Appeals reversed the dismissal. The case is now going to trial.
Susan Zitka says that the state has seized assets, including her home, that had no connection to the internet cafes, and that these assets are needed to pay attorneys. Total assets include about $120,000 in money from three bank accounts, $5,000 in cash from the businesses, $1,500 in cash from the Zitka home, a variety of computers and video gaming equipment, and a Muskegon residence worth about $195,000, where the Zitkas live. The family still lives there, but there is a lien on it, and it cannot be sold.
Susan Zitka says the case and the expenses are taking a huge toll on her and her family.
“Our businesses were in Muskegon County. Our home is in Muskegon County. Yet we had to turn ourselves in to the jail in Lansing and are being prosecuted in Lansing,” she noted. “Which means every time we go to court it is a five hour round trip for us, not to mention [an] expense that we can’t afford when they have all our money tied up. … Every couple of weeks I am getting notices from the state and penalties because the third quarter taxes from 2016 are due. They send levy warrants in the mail and other things are accumulating because we don’t have access to pay anything.”
She says her family accumulated the vast majority of its assets and the home well before it ever got involved in the disputed businesses. She also noted that unfortunate circumstances mean they have taken on the full guardianship of two grandchildren, including one with special needs.
“My husband and I opened these businesses in 2013 while my husband was still working and I had recently left my job,” she said. “We have worked our whole life before this venture. I was an independent contractor who was on the road doing insurance physicals for companies for life insurance policies and the business was to help supplement [our income when I was not working]. We didn’t even open until noon.”
Bruce Zitka retired in 2014 and is 68 years old. The home was purchased in 2000, according to public records.
“For them to even go after our home is nonsense,” she said. “Our business was in a business location but because they found business records in our home, it was seized.”
In court filings, prosecutors say they believe the money seized was involved in criminal activity and that some private funds initially seized were quickly released once they concluded they were not connected to the alleged crimes. Zitka says that money was primarily Bruce’s benefits from Social Security.
Darpana Sheth is a senior attorney for the Institute for Justice, a public interest law firm that has litigated many civil forfeiture cases. She says this case shows the need for the U.S. Supreme Court to reverse previous decisions allowing what she calls “the absurd reality of prosecutors and police depriving people of property before a crime has been proven.”
“The Supreme Court has aptly characterized the pretrial restraint of assets as a ‘nuclear weapon’ for prosecutors,” Sheth said. “At a time when individuals are supposed to be presumed innocent, prosecutors can hobble those individuals from defending themselves by freezing assets needed to pay for counsel, bail, or even basic necessities of life. Although six members of the Supreme Court wrongly concluded [in Kaley v. United States] that this system of punishment before trial does not raise any constitutional concerns, Congress and state legislatures remain free to and should restore the presumption of innocence and at minimum allow individuals an opportunity to challenge the prosecutors’ decision to freeze needed assets.”
The Attorney General’s office said it cannot comment on pending criminal cases.
“That sad part is that once this is over, even if we are not found guilty, we have lost three years of our life,” Zitka said. “A lifetime of working has ended with everything being destroyed and we have no recourse for damages. They will just walk away and move on to the next one. How can you ever recover from something like this, especially at our age?”
Anyone looking to open an Internet cafe in Toledo Ohio may soon have to secure a special-use permit before their patrons can log on.
Councilman Tyrone Riley, who represents District 1, said he will ask for support from his colleagues at the next council meeting to request that the Toledo Plan Commission study the facilities — where people play electronic games of chance similar to slots — and require the businesses to apply for special-use permits to allow more scrutiny from council and give the public a chance to weigh in.